20-F - EDRY - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 20-F

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(Mark One)

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

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br> <br>For the fiscal year ended December 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br> <br>For the transition period from to

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br> Date of event requiring this shell company report<br> <br><br> <br>Commission file number 001-38502 ****
EURODRY LTD.
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(Exact name of Registrant as specified in its charter)
Not applicable
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(Translation of Registrant’s name into English)
Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
4 Messogiou & Evropis Street, 151 24 Maroussi Greece
(Address of principal executive offices)
Tasos Aslidis, Tel: (908) 301-9091, info@eurodry.gr, EuroDry Ltd. c/o Tasos Aslidis,<br> <br>11 Canterbury Lane, Watchung, NJ 07069
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, $0.01 par value	EDRY	Nasdaq Capital Market

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

None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report
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	2,832,417 common shares, $0.01 par value

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

☐ Yes ☒ No

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

☐ Yes ☒ No

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

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

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	Accelerated filer	Non-accelerated filer
☐	☐	☒
		Emerging growth company
		☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

†The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

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

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

☐ Item 17 ☐ Item 18

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

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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☐ Yes ☐ No

TABLE OF CONTENTS

		Page
Forward-Looking Statements		1
Part I
Item 1.	Identity of Directors, Senior Management and Advisers	3
Item 2.	Offer Statistics and Expected Timetable	3
Item 3.	Key Information	3
Item 4.	Information on the Company	41
Item 4A.	Unresolved Staff Comments	62
Item 5.	Operating and Financial Review and Prospects	62
Item 6.	Directors, Senior Management and Employees	78
Item 7.	Major Shareholders and Related Party Transactions	84
Item 8.	Financial Information	88
Item 9.	The Offer and Listing	89
Item 10.	Additional Information	89
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	101
Item 12.	Description of Securities Other than Equity Securities	103
Part II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	103
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	103
Item 15.	Controls and Procedures	103
Item 16A.	Audit Committee Financial Expert	105
Item 16B.	Code of Ethics	105
Item 16C.	Principal Accountant Fees and Service	105
Item 16D.	Exemptions from the Listing Standards for Audit Committees	105
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	105
Item 16F.	Change in Registrant’s Certifying Accountant	106
Item 16G.	Corporate Governance	107
Item 16H.	Mine Safety Disclosure	107
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	107
Item 16J.	Insider Trading Policies	107
Item 16K.	Cybersecurity	107
Part III
Item 17.	Financial Statements	109
Item 18.	Financial Statements	109
Item 19.	Exhibits	109

FORWARD-LOOKING STATEMENTS

EuroDry Ltd. and its subsidiaries, or the Company, desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This annual report contains forward-looking statements. These forward-looking statements include information about possible or assumed future results of our operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify the forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding:

●	our future operating or financial results;
●	future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
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●	drybulk industry trends, including charter rates and factors affecting vessel supply and demand;
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●	fluctuations in our stock price as a result of volatility in securities markets;
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●	the impact of increasing scrutiny and changing expectations from investors, lenders, charterers and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies;
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●	our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
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●	fluctuations in currencies, interest rates and foreign exchange rates;
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●	availability of crew, number of off-hire days, drydocking requirements and insurance costs;
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●	our expectations about the availability of vessels to purchase or the useful lives of our vessels;
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●	our expectations relating to dividend payments and our ability to make such payments;
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●	our ability to leverage to our advantage the relationships and reputations of Eurobulk Ltd. (“Eurobulk”) and Eurobulk (Far East) Ltd. Inc. (“Eurobulk FE”), our affiliated ship management companies (each a “Manager” and together, the “Managers”), in the drybulk shipping industry;
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●	changes in seaborne and other transportation patterns;
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●	changes in governmental rules and regulations or actions taken by regulatory authorities;
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●	potential liability from future litigation;
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●	global and regional political conditions;
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●	acts of terrorism and other hostilities, including piracy, the war between Russia and Ukraine, the war between Israel and Hamas and the trade disruption in the Red Sea region;
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●	the severity and duration of natural disasters or public health emergencies on our business and operations and any related remediation measures on our performance and business prospects; and
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●	other factors discussed in the section titled “Risk Factors.”

WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNUAL REPORT, EXCEPT AS REQUIRED BY LAW, OR THE DOCUMENTS TO WHICH WE REFER YOU IN THIS ANNUAL REPORT, TO REFLECT ANY CHANGE IN OUR EXPECTATIONS WITH RESPECT TO SUCH STATEMENTS OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY STATEMENT IS BASED.

PART I

Item 1.	Identity of Directors, Senior Management and Advisers
Not Applicable.
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Item 2.	Offer Statistics and Expected Timetable
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Not Applicable.
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Item 3.	Key Information
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Please note: Throughout this report, all references to "we," "our," "us" and the "Company" refer to EuroDry Ltd. and its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry. Unless otherwise indicated, all references to "dollars" and "$" in this report are to, and amounts are presented in, U.S. dollars.

A.	[Reserved]
B.	Capitalization and Indebtedness
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Not Applicable.

C.	Reasons for the Offer and Use of Proceeds

Not Applicable.

D.	Risk Factors

Any investment in our common stock involves a high degree of risk. You should consider carefully the following factors, as well as the other information set forth in this annual report, before making an investment in our common stock. Some of the following risks relate principally to the industry in which we operate and our business in general. Other risks relate to the securities market for, and ownership of, our common stock. Any of the described risks could significantly and negatively affect our business, financial condition, operating results and common stock price. The following risk factors describe the material risks that are presently known to us.

Risk Factors Summary

●	The uncertainties in global and regional demand for dry bulk trade;
●	The volatile drybulk shipping market and difficulty finding profitable charters for our vessels;
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●	Fluctuations in our stock price as a result of volatility in securities markets;
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●	The impact of the COVID-19 pandemic and resulting disruptions to the Company and the international shipping industry could negatively affect our business, results of operations or financial condition;
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●	Our ability to comply with various financial and collateral covenants in our credit facilities;
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●	Uncertainties related to the market value of our vessels;
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●	Uncertainties related to the supply and demand of drybulk vessels;
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●	The impact of increasing scrutiny and changing expectations from investors, lenders, charterers and other market participants with respect to our ESG policies;
●	Disruption of world trade due to rising protectionism or the breakdown of multilateral trade agreements;
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●	Disruptions in global financial markets relating to terrorist attacks or geopolitical risk and the ongoing conflict between Russia and Ukraine, the war between Israel and Hamas and trade disruption in the Red Sea region;
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●	Uncertainties related to conducting business in China;
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●	Our dependence on a limited number of customers;
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●	Our ability to enter into time charters with existing and new customers, and to re-charter our vessels upon the expiry of existing charters;
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●	Uncertainties related to our counterparties’ ability to meet their obligations, which could adversely affect our business;
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●	Our ability to obtain additional debt financing for future acquisitions of vessels or to refinance our existing debt;
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●	Uncertainties related to availability of new or secondhand vessels to acquire;
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●	Uncertainties related to the price of fuel, and our reliance on suppliers;
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●	Our ability to attract and retain qualified, skilled crew at reasonable cost;
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●	A potential increase in operating costs associated with the aging of our fleet;
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●	Our ability to leverage to our advantage our Managers’ relationships and reputation within the drybulk shipping industry;
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●	Our ability to hedge against fluctuations in exchange rates and interest rates;
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●	Conversion of our London Interbank Offered Rate, (“LIBOR”) based borrowings to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”);
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●	The expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as requirements imposed by classification societies and standards demanded by our charterers;
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●	The expected cost of, and our ability to comply with, changing environmental and operational safety laws;
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●	Potential cyber-attacks which may disrupt our business operations;
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●	Potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists and armed conflicts;
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●	Potential conflicts of interest between us, our principal officers and our Managers;
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●	Uncertainties related to compliance with sanctions and embargo laws;
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●	Uncertainties in the interpretation of corporate law in the Marshall Islands;
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●	Uncertainties over our ability to pay dividends;
●	The expected costs associated with complying with public company regulations; and
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●	The effect of any future issuance of preferred stock on the voting power of our shareholders.
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Industry Risk Factors

Our future profitability will be dependent on the level of charter rates in the international drybulk shipping industry.

We are an independent shipping company that operates in the drybulk shipping industry. Our profitability is dependent upon the charter rates we are able to charge for our ships. The supply of, and demand for, shipping capacity strongly influences charter rates. The demand for shipping capacity is determined primarily by the demand for the types of commodities carried and the distance that those commodities must be moved by sea. The demand for commodities is affected by, among other things, world and regional economic and political conditions (including developments in international trade, economic slowdowns caused by public health events such as the COVID-19 pandemic, fluctuations in industrial and agricultural production and armed conflicts), environmental concerns, weather patterns, and changes in seaborne and other transportation costs. The size of the existing fleet in a particular market, the number of new vessel deliveries, the scrapping of older vessels and the number of vessels out of active service (i.e., laid-up, drydocked, awaiting repairs or otherwise not available for hire) determine the supply of shipping capacity, which is measured by the amount of suitable tonnage available to carry cargo.

In addition to the prevailing and anticipated charter 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 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. Some of these factors may have a negative impact on our revenues and net income.

The cyclical nature of the shipping industry may lead to volatile changes in freight rates, which may reduce our revenues and negatively affect our results of operations.

Over the period 2019 to 2023, the BDI (Baltic Drybulk Index, an index that reflects the average daily equivalent rate of renting a vessel and operating crew) fluctuated around 1,353 points on average in 2019, an average of 1,066 points in 2020, an average of 2,943 points in 2021, an average of 1,933 points in 2022 and an average of 1,378 in 2023. The industry is cyclical in nature due to seasonal fluctuations, market adjustments in supply of and demand for drybulk vessels and trade disruptions. The market could experience a downturn in case of a new wave of COVID-19, or as a result of the war between Russia and Ukraine, the war between Israel and Hamas and the Red Sea trade disruption, or for a number of other reasons. For example, in 2008, the BDI had reached an all-time high of 11,793 points, while in 2016, it had reached an all-time low of 290 points. 2021 was a very strong year for the dry bulk market compared to the last decade, as the COVID-19 pandemic, low orderbook and high demand for drybulk trade created a more favorable market environment. In March 2021, the BDI stood at 2,046 points, which skyrocketed to 5,650 points in October 2021 before dropping again to 2,217 by the end of the year, due to higher energy prices and reduced demand for iron ore from China. After a 176% annual increase in 2021, the BDI fell by 34% in 2022, being the largest drop since the end of the previous cycle in 2015 when it also fell 35%. The drybulk shipping market faced significant headwinds in 2022 on the back of geopolitical uncertainties, China’s zero-COVID containment policy and a weaker global economic outlook. The BDI fluctuated from a low of 965 points to a high of 3,369 points, before closing the year at 1,515 points. 2023 started on a weaker note, with seasonal trends intensifying wider demand and economic headwinds, impacts on consumer act and reduced port congestion. The average BDI in March stood at 1,410 points and continued to drop due to reduced fleet inefficiencies, persistent demand challenges in key regions and the accumulation of fleet growth in recent years. The BDI started increasing again in the fall of 2023, predominantly due to increased demand in coal. Towards the end of the year, primarily due to the effects of constraints on vessel transits imposed by climate-related reasons through the Panama Canal and reduced traffic through the Suez Canal due to hostilities in the region, resulting in longer voyages for some shipments, the BDI index started rising, reaching 2,538 points by December 2023. Since then, the index gave up most of its gains until February 2024, standing at around 1,600 points, but rose significantly in March 2024, standing at around 2,200 points.

The continued volatility in dry bulk charter rates is mostly due to various factors affecting demand for and supply of vessels, including the lack of trade financing for purchases of commodities carried by sea, which may result in a significant decline in cargo shipments, trade disruptions caused by natural disasters, and increased newbuilding deliveries. The COVID-19 pandemic resulted in disruptions to industrial production and supply chains across the world, which caused uncertainty in the short-term outlook for the sector. However, these disruptions came to be positive for dry bulk shipping. Disruptions in world-trade continue since the outbreak of COVID-19, primarily due to geopolitical conflicts, as well as climate-related issues. More recently, events in the Red Sea have reduced transits in the area, as shipments are diverted via longer routes, while restrictions have been imposed in the Panama Canal as well. There is no certainty that the dry bulk charter market will experience further recovery over the next months and the market could decline from its current level, especially as the war between Ukraine and Russia continues and energy prices continue to climb, which may reduce economic growth.

Rates in the drybulk market are influenced by the balance of demand for and supply of vessels and may decline again in the future. 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 unpredictable, and as a result so are the rates at which we can charter our vessels. In addition, we may not be able to successfully charter our vessels in the future or renew existing charters at rates sufficient to allow us to meet our obligations or to pay dividends to our shareholders.

Some of the factors that influence demand for vessel capacity include:

●	supply of, and demand for, drybulk commodities;
●	changes in the exploration or production of energy resources and commodities, and the resulting changes in the international pattern of trade;
●	global and regional economic and political conditions, including armed conflicts and terrorist activities, such as the ongoing war between Russia and Ukraine, the war between Israel and Hamas and trade disruption in the Red Sea region;
●	epidemics or pandemics, such as the outbreak of COVID-19 originating in China in 2020;
●	embargoes and strikes;
●	the location of regional and global exploration, production and manufacturing facilities;
●	availability of credit to finance international trade;
●	the location of consuming regions for energy resources and commodities;
●	the distance drybulk commodities are to be moved by sea;
●	environmental and other regulatory developments;
●	currency exchange rates;
●	changes in global production and manufacturing distribution patterns of finished goods that utilize drybulk commodities;
●	sanctions, embargoes, import and export restrictions, including those arising as a result of the war between Russia and Ukraine and the war between Israel and Hamas;
●	changes in seaborne and other transportation patterns; and
●	weather and other natural phenomena.

Some of the factors that influence the supply of vessel capacity include:

●	the number of newbuilding orders and deliveries including slippage in deliveries;
●	the scrapping rate of older vessels;
●	the price of steel and other materials;
●	port and canal congestion;
●	changes in environmental and other regulations that may limit the useful life of vessels;
●	the price of fuel;

●	vessel casualties;
●	the number of vessels that are out of service; and
●	changes in global commodity production.

We anticipate that the future demand for our drybulk vessels and the charter rates of the drybulk market will be dependent upon economic recovery and growth in the United States, Europe, Japan, China, India and the overall world economy, as well as seasonal and regional changes in demand and changes to the capacity of the world fleet. The capacity of the world fleet may increase and economic growth may not continue. Adverse economic, political, social or other developments could also have a material adverse effect on our business and results of operations.

The market value of our vessels can fluctuate significantly, which may adversely affect our financial condition, cause us to breach financial covenants, result in the incurrence of a loss upon disposal of a vessel or increase the cost of acquiring additional vessels.

The value of our vessels may fluctuate, adversely affecting our earnings and liquidity and causing us to breach our secured credit agreements.

The fair market values of our vessels are related to prevailing charter rates. While the fair market value of vessels and the freight charter market have a very close relationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary. A decrease in the market values of our vessels could limit the amount of funds that we can borrow or trigger certain financial covenants under our current or future credit facilities, and we may incur a loss if we sell vessels following a decline in their market value. Furthermore, a decrease in the market value of our vessels could require us to raise additional capital at costs unfavorable to our shareholders in order to remain compliant with our loan covenants, or could result in foreclosure of our vessels and adversely affect our earnings and financial condition.

The market value of our vessels may increase or decrease depending on the following factors:

●	general economic and market conditions affecting the shipping industry;
●	supply of drybulk vessels, including newbuildings;
●	demand for drybulk vessels;
●	types and sizes of vessels in our fleet;
●	scrap values;
●	other modes of transportation;
●	cost of newbuildings;
●	technological advances;
●	new regulatory requirements from governments or self-regulated organizations;
●	competition from other shipping companies; and
●	prevailing level of charter rates.

As vessels grow older, they generally decline in value. Due to the cyclical nature of the drybulk shipping industry, if for any reason we sell vessels at a time when prices have fallen, we could incur a loss and our business, results of operations, cash flow, financial condition and ability to pay dividends could be adversely affected.

In addition, we periodically re-evaluate the carrying amount and period over which vessels are depreciated to determine if events have occurred that would require modification to such assets’ carrying values or their useful lives. A determination that a vessel's estimated remaining useful life or recoverable value has declined below its carrying amount could result in an impairment charge against our earnings and a reduction in our shareholders' equity.

Our secured loan agreements, which are secured by mortgages on our vessels, contain various financial covenants. Any change in the assessed market value of any of our vessels might also cause a violation of the covenants of each secured credit agreement, which, in turn, might restrict our cash and affect our liquidity. Among those covenants are requirements that relate to our net worth, operating performance and liquidity. For example, there is a minimum equity ratio requirement and a maximum fleet leverage covenant that are based, in part, upon the market value of the vessels securing the loans, as well as requirements to maintain a minimum ratio of the market value of our vessels mortgaged thereunder to our aggregate outstanding balance under each respective loan agreement. If the assessed market value of our vessels declines below certain thresholds, we may violate these covenants and may incur penalties for breach of our credit agreements. For example, these penalties could require us to prepay the shortfall between the assessed market value of our vessels and the value of such vessels required to be maintained pursuant to the secured credit agreement, or to provide additional security acceptable to the lenders in an amount at least equal to the amount of any shortfall. If we are unable to pledge additional collateral, our lenders could accelerate our debt and foreclose on our fleet. Furthermore, we may enter into future loans, which may include various other covenants, in addition to the vessel-related ones, that may ultimately depend on the assessed values of our vessels. Such covenants could include, but are not limited to, minimum fair net worth covenants.

An over-supply of drybulk carrier capacity relative to the demand for it may lead to reductions in charter rates and profitability and may require us to raise additional capital in order to remain compliant with our loan covenants and affect our ability to pay dividends in the future.

The market supply of drybulk carriers has been volatile in the last few years. Although the number of drybulk vessels on order is at a historically low level, it can quickly increase if multiple orders by industry participants and outside investors are placed. Expressed as percentage of the fleet, the drybulk orderbook reached a historically high level of more than 80% in November 2008 from a level of 25% of the fleet two years before. When the majority of the orderbook was delivered following the financial crisis of 2008, the resulting oversupply negatively affected the market charter rates. Ordering sprees of lesser magnitude occurred also in 2014 and 2018, with the orderbook to fleet ratio reaching 25% and 12%, respectively. In 2019 scrapping rates increased by about 76% to 7.8 million dwt, followed by a precipitous 95% increase year on year to 15.3 million dwt in 2020 as a result of lower charter rates. In 2021, scrapping dropped by 66% year on year to 5.19 million dwt, as the market improved. Scrapping rates remained steady through to 2023. In 2020, fleet growth stood at 4% year on year, with a slight decline in 2021 to 3.8%. In 2022 fleet growth declined to 2.9%. In 2023 the fleet grew by 3.1%, and according to industry sources, fleet growth is expected to decline even further in 2024 (2.9%) and 2025 (2.3%) year on year. In general, if the number of new ships delivered exceeds the number of vessels being scrapped and lost, vessel capacity will increase. If the supply of vessel capacity increases but the demand for vessel capacity does not increase correspondingly, charter rates and vessel values could materially decline. As of March 31, 2024, as reported by industry sources, the capacity of the worldwide drybulk fleet was approximately 1,009.07 million dwt with another 89.55 million dwt, or about 8.87% of the present fleet capacity, on order. Despite the orderbook being at historically low levels, a sudden drop in demand for dry bulk commodity products may have a negative impact on charter rates.

If such a rate decline occurs upon the expiration or termination of our current charters, we may only be able to re-charter those vessels at reduced rates or we may not be able to charter these vessels at all. Charter rates reached profitable levels during most of 2018 but remained volatile and fluctuated significantly during the year, which continued into 2019 and most of 2020. Despite this volatility, we were able to secure short and long-term time charters for our vessels throughout 2020 and 2021. In 2021, even though market conditions remained somewhat volatile, demand for dry bulk commodities increased. Throughout 2021 almost half of our fleet was employed under index linked charters that are open to market conditions, while the rest were employed under much higher charter rates than the previous two years. At the beginning of 2022, four vessels were employed under index linked charters, which were later reduced to two by the end of the year, while the rest were employed under short time charters through 2023. As of March 31, 2024, two of our vessels are employed under index linked charters, while the rest of the fleet is employed under short term time charters. Any inability to enter into more profitable charters may require us to raise additional capital in order to remain compliant with our loan covenants and may also affect our ability to pay dividends in the future.

A decrease in the level of imports of raw materials and other commodities will reduce demand for our ships and, in turn, harm our business, results of operations and financial condition.

The employment of our vessels and our revenues depend on the international shipment of raw commodities primarily to China, Japan, South Korea and Europe from North and South America, India and Australia. Any reduction in or hindrance to the demand for such materials could negatively affect demand for our vessels and, in turn, harm our business, results of operations and financial condition. For instance, the government of China has implemented economic policies aimed at reducing the consumption of coal which may, in turn, result in a decrease in shipping demand. Similarly, the COVID-19 pandemic resulted in reduced economic activity due to shutdowns, while the conflicts between Russia and Ukraine have caused more turbulence in the commodity markets. More recently, the Panama Canal drought has led to prolonged wait times, capacity constraints and increased pressure on shipping schedules. Disruption in the Red Sea has caused a decline in dry cargo ship traffic through this route, as shipping companies are forced to either suspend their voyages or reroute them on longer routes, which increases voyage time.

Our international operations expose us to the risk that increased trade protectionism will harm our business. If global economic challenges exist, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, the leaders of the United States have indicated that the United States may seek to implement more protective trade measures. In February 2022, at the onset of the Russia-Ukraine conflict, economic and trade sanctions were imposed against Russia, some of which have had large economic consequences on a global scale. Protectionist developments, or the perception that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade.

Increasing trade protectionism in the markets that our customers serve has caused and may continue to cause an increase in: (a) the cost of goods exported from Asia Pacific, (b) the length of time required to deliver goods from the region and (c) the risks associated with exporting goods from the region. Such increases may also affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs.

The U.S. government has recently made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies, including tariffs affecting certain Chinese industries. It is unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition, and results of operations.

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 and our ability to pay dividends to our shareholders.

Adverse economic conditions, especially in the Asia Pacific region, the European Union or the United States, could harm our business, results of operations and financial condition.

China has been one of the world’s fastest growing economies in terms of gross domestic product, or GDP, which has increased the demand for shipping. However, even prior to the COVID-19 pandemic, China’s high rate of real GDP growth had already reached a plateau, posting a 0.5 percentage points decline, year on year, in 2019, followed by a tremendous decline of 3.8 percentage points in 2020 due to the COVID-19 pandemic. With a global economic recovery under way in 2021, China’s GDP increased by 6.1 percent, to stand at 8.4 percentage points. The rapid spread of COVID infections in China along with its troubled property market, dampened growth significantly in 2022, expanding by a mere 3.0 percent. Nevertheless, the Chinese economy rebounded in 2023 despite an underwhelming boost following the lifting of pandemic sanctions and persistent property sector woes. China’s GDP increased by 2.2 percentage points to stand at 5.2 percent in 2023, with a projected GDP growth of 4.6 percentage points in 2024 and a further 4.1 percent in 2025. In addition, the rise in interest rates to tame inflation and the war between Russia and Ukraine continue to impact economic activity. The United States has imposed tariffs on certain goods and may seek to implement more protectionist trade measures to protect and enhance its domestic economy. The European Union, or the EU, and certain of its member states are facing significant economic and political challenges, including a risk of increased protectionist policies. The recent trade and financial sanctions imposed on Russia have also directly impacted prices and economic activity. Our business, results of operations and financial condition will likely be harmed by any significant economic downturn and economic instability in the Asia Pacific region, including China, or in the EU or the United States.

Outbreaks of epidemic and pandemic diseases and governmental responses thereto could adversely affect our business.

Pandemics, epidemics or other infectious disease outbreaks and government responses to such outbreaks could affect our operations negatively. For instance, COVID-19, which was initially declared a pandemic by the World Health Organization on March 11, 2020 and was declared no longer a global health emergency on May 5, 2023, negatively affected economic conditions, supply chains, labor markets, and demand for certain shipped goods both regionally and globally as a result of government efforts to combat the pandemic, including the enactment or imposition of travel bans, quarantines and other emergency public health measures.

The extent to which our business could be negatively affected by future pandemics, epidemics or other outbreaks of infectious diseases is uncertain and may depend on numerous evolving factors that we cannot predict and that are outside of our control, such as the duration and severity of the infectious disease outbreak; government responses to such outbreak including travel restrictions and quarantine; the effect such an outbreak would have on the global business environment and the demand for the goods we transport; its effect on the price of fuel for our vessels; shortages or reductions of supply of essential goods, services or labor; and fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit, and governmental responses thereto.

Any prolonged shutdown in the global economy may again negatively impact the worldwide demand for drybulk cargo, as it did in the first half of 2020, adversely affect the liquidity and financial position of our charterers and may decrease employment rates for our vessels. We cannot predict the effect that an outbreak of a new COVID-19 variant or strain, or any future infectious disease outbreak, pandemic or epidemic may have on our business, results of operations and financial condition, but it could be material and adverse, and result in reductions in our revenue and the market value of our vessels, which could materially adversely affect our business and results of operations.

Eurozone’s potential inability to deal with the sovereign debt issues of some of its members could have a material adverse effect on the profitability of our business, financial condition and results of operations.

Despite the efforts of the European Council since 2011 to implement a structured financial support mechanism for Eurozone countries experiencing financial difficulties, questions remain about the capability of a number of member countries to refinance their sovereign debt and meet their debt obligations, especially, as the COVID-19 pandemic resulted in lower economic growth in almost all countries. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanent stability mechanism, the European Stability Mechanism (or the “ESM”), which will be activated by mutual agreement to provide 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. An extended period of adverse development in the outlook for Eurozone countries could reduce the overall demand for our services. These potential developments, or market perceptions concerning these and related issues, could have a material adverse effect on our financial position, results of operations and cash flow.

Effects and events related to the Greek sovereign debt crisis may adversely affect our operating results.

Greece has experienced a macroeconomic downturn in previous years, from which it has been recovering as a result of the sovereign debt crisis and the related austerity measures implemented by the Greek government. Eurobulk Ltd.’s (“Eurobulk,” a Manager of the Company) operations in Greece may be subjected to new regulations or regulatory action that may require us to incur new or additional compliance or other administrative costs and may require that we or Eurobulk pay to the Greek government new taxes or other fees. We and Eurobulk also face the risk that strikes, work stoppages, civil unrest and violence within Greece may disrupt our and Eurobulk's shore-side operations located in Greece. The Greek government's taxation authorities have increased their scrutiny of individuals and companies to secure tax law compliance. If economic and financial market conditions remain uncertain, persist or deteriorate further, the Greek government may impose further changes to tax and other laws to which we and Eurobulk may be subject or change the ways they are enforced, which may adversely affect our business, operating results, and financial condition.

The drybulk industry is highly competitive, and we may be unable to compete successfully for charters with established companies or new entrants that may have greater resources and access to capital, which may have a material adverse effect on our business, prospects, financial condition, liquidity and results of operations.

The drybulk industry is highly competitive, capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom may have greater resources and access to capital than we have. Competition among vessel owners for the seaborne transportation of drybulk cargo can be intense and depends on the charter rate, 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 operate larger fleets than we may operate and thus be able to offer lower charter rates or 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.

Changes in the economic and political environment in China and policies adopted by the Chinese government to regulate China’s economy may have a material adverse effect on our business, financial condition and results of operations.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, (or “OECD”), in such respects as structure, government involvement, level of development, growth rate, capital reinvestment, allocation of resources, rate of inflation and balance of payments position. Prior to 1978, the Chinese economy was a planned economy. Since 1978, increasing emphasis has been placed on the utilization of market forces in the development of the Chinese economy. Annual and five-year State Plans are adopted by the Chinese government in connection with the development of the economy. Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through State Plans and other measures. There is an increasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a "market economy" and enterprise reform. Limited price reforms were undertaken, with the result that prices for certain commodities are principally determined by market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition based upon the outcome of such experiments. The Chinese government may not continue to pursue a policy of economic reform. The level of imports to and exports from China could be adversely affected by the nature of the economic reforms pursued by the Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, all of which could adversely affect our business, operating results, financial condition and cash flows.

We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.

Almost all of our vessels may be chartered to Chinese customers and from time to time on our charterers' instructions, our vessels may call on Chinese ports. Such charters and voyages may be subject to regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Applicable laws and regulations in China may not be well publicized and may not be known to us or to our charterers in advance of us or our charterers becoming subject to them, and the implementation of such laws and regulations may be inconsistent. Changes in Chinese laws and regulations, including with regards to tax matters, or changes in their implementation by local authorities could affect our vessels if 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.

We may become dependent on spot, short-term time charters or index linked charters in the volatile shipping markets, which may result in decreased revenues and/or profitability.

Almost all of our vessels are currently under time charters that are short term or linked to market indices (typically, those of the Baltic Exchange) which reflect the spot market. The spot market is highly competitive and rates within this market are subject to volatile fluctuations, while medium and longer term time charters provide income at pre-determined rates over more extended periods of time. By deciding to spot charter our vessels or time charter them for short periods typically equal to the length of a single voyage (voyage charters) as opposed to using medium or long term time charters (even index-linked), we may not be able to keep all our vessels fully employed in these short-term markets. In addition, we may not be able to predict whether future spot rates will be sufficient to enable our vessels to be operated profitably. A significant decrease in charter rates has previously affected and could again affect the value of our fleet and could adversely affect our profitability and cash flows with the result that our ability to pay debt service to our lenders and pay out dividends to our shareholders could be adversely affected.

We may have difficulty securing profitable employment for our vessels if their charters expire in a depressed market.

As of April 15, 2024, twelve out of thirteen of our vessels are under time charters, 11 of which are scheduled to expire during 2024 and one which is scheduled to expire during 2025. When the current charters of our vessels are due for renewal, we may be unable to re-charter these vessels at better rates if the current market rates do not improve or we might not be able to charter them at all. Although we do not receive any revenues from our vessels while not employed, we are required to pay expenses necessary to maintain the vessels in proper operating condition, insure them and service any indebtedness secured by such vessels. If we cannot re-charter our vessels on time charters or trade them in the spot market profitably, our results of operations and operating cash flow will be adversely affected. Despite the fact that as of April 15, 2024 all but one of our vessels are employed, we may be forced to lay up vessels if rates drop to levels below daily running expenses or if we are unable to find employment for the vessels for prolonged periods of time.

We will not be able to take advantage of potentially favorable opportunities in the current spot market with respect to vessels employed on time charters.

Although, as of April 15, 2024, ten of our vessels are employed under time charters with fixed charter rates with remaining terms of one to two months, based on the minimum duration of the charter contracts, while two vessels are chartered under index-linked charters, we may have more vessels under fixed rate time charters in the future. Although time charters provide relatively steady streams of revenue, vessels committed to time charters may not be available for spot charters during periods of increasing charter hire rates, when spot charters might be more profitable. If we cannot re-charter these vessels on time charters or trade them in the spot market profitably, our results of operations and operating cash flow may suffer. We may not be able to secure charter rates in the future that will enable us to operate our vessels profitably.

Global economic conditions may continue to negatively impact the drybulk shipping industry.

Major market disruptions and adverse changes in market conditions and regulatory climate in China, the United States, the European Union and worldwide may adversely affect our business.

Chinese drybulk imports have accounted for the majority of global drybulk transportation growth annually over the last decade. Accordingly, our financial condition and results of operations, as well as our future prospects, would likely be hindered by an economic downturn in any of these countries or geographic regions. In recent years China and India have been among the world’s fastest growing economies in terms of gross domestic product, and any economic slowdown in the Asia Pacific region, particularly in China or India, may adversely affect demand for seaborne transportation of our products and our results of operations. Moreover, any deterioration in the economy of the United States or the European Union, may further adversely affect economic growth in Asia.

Economic growth is expected to slow, including due to supply-chain disruption, the recent surge in inflation and related actions by central banks and geopolitical conditions, with a significant risk of recession in many parts of the world in the near term. In particular, an adverse change in economic conditions affecting China, Japan, India or Southeast Asia generally could have a negative effect on the drybulk market.

Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies which do not adapt to or comply with investor, lender or other market participant expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.

We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing and future investors and lenders remain invested in us and make further investments in us. If we do not meet these standards, our business and/or our ability to access capital could be harmed.

Additionally, certain investors and lenders may exclude shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governance factors.  These limitations in both the debt and equity capital markets may affect our ability to develop, as our plans for growth may include accessing the equity and debt capital markets.  If those markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy, which would have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness. Further, it is likely that we will incur additional costs and require additional resources to monitor, report and comply with wide ranging ESG requirements.  The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition.

On March 6, 2024, the Securities and Exchange Commission (“SEC”) adopted final rules to require registrants to disclose certain climate-related information in SEC filings of all public companies. The final rules require companies to disclose, among other things: material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition. Further, to facilitate investors' assessment of certain climate-related risks, the final rules require disclosure of Scope 1 and/or Scope 2 greenhouse gas (GHG) emissions on a phased-in basis when those emissions are material; the filing of an attestation report covering the required disclosure of such registrants’ Scope 1 and/or Scope 2 emissions, also on a phased-in basis; and disclosure of the financial statement effects of severe weather events and other natural conditions including, for example, costs and losses. The final rules include a phased-in compliance period for all registrants, with the compliance date dependent on the registrant’s filer status and the content of the disclosure.

If we fail to adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or if we fail to comply with the SEC’s requirements, or if we are perceived to have failed to respond appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and incur costs related to litigation or as a failure to comply with regulatory requirements, and our business, financial condition, and/or stock price could be materially and adversely affected.

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 requirements include, but are not limited to, the International Convention for the Prevention of Pollution from Ships of 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as MARPOL, including the designation of emission control areas, ECAs, thereunder, the International Convention on Load Lines of 1966, or the LL Convention, the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocol in 1976, 1984 and 1992, and amended in 2000, and generally referred to as the CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the International Convention for the Safety of Life at Sea of 1974, or SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Water Act, or the CWA, the U.S. Clean Air Act, or the CAA, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and European Union regulations. 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.

Furthermore, events like the 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, and modifications to statutory liability schemes. Thus, 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 including greenhouse gases, 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. 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 price or useful life 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 and certificates with respect to our operations. 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. An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for 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. There can be no assurance that any such insurance we have arranged to cover certain environmental risks 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. We currently maintain, for each of our vessels, pollution liability coverage insurance of $1.0 billion per incident. If the damages from a catastrophic spill exceeded our insurance coverage, it would severely and adversely affect our business, results of operations, cash flows, financial condition and ability to pay dividends.

Environmental requirements can also require a reduction in cargo capacity, ship modifications or operational changes or restrictions, lead to decreased availability of insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including clean up obligations and natural resource damages in the event that there is a release of bunkers or hazardous substances from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property damage claims relating to the release of hazardous substances associated with our existing or historic operations. Violations of, or liabilities under, environmental requirements can result in substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of our vessels.

We 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 a denial of access to, or detention in, certain ports.

The operation of our vessels is affected by the requirements set forth in the ISM Code set forth in Chapter IX of SOLAS. The ISM Code requires shipowners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe vessel operations and for dealing with emergencies. We rely upon the safety management system that we and our technical managers have developed for compliance with the ISM Code. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. Currently, each of our vessels, Eurobulk and Eurobulk FE, our affiliated ship management companies, are ISM Code-certified, but we may not be able to maintain such certification indefinitely.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the United Nations’ International Maritime Organization (the “IMO”). The document of compliance (the “DOC”) and the safety management certificate (the “SMC”) are renewed as required.

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. As mentioned above, we are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and financial assurances with respect to our operations. See Item 4: “Information on the Company – Business Overview – Environmental and Other Regulations in the Shipping Industry” for more information.

Regulations relating to ballast water discharge and greenhouse gas emissions from ships may adversely affect our revenues and profitability.

The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the date of the International Oil Pollution Prevention (“IOPP”) renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. We have implemented the required ballast water treatment systems on all of our vessels and are in compliance with all the applicable regulations.

Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (“VGP”) program and U.S. National Invasive Species Act (“NISA”) are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018, requires that the U.S. Environmental Protection Agency (“EPA”) develop national standards of performance for approximately 30 discharges, similar to those found in the VGP within two years. On October 18, 2023, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA. Within two years after the EPA publishes its final Vessel Incidental Discharge National Standards of Performance, the U.S. Coast Guard must develop corresponding implementation, compliance, and enforcement regulations regarding ballast water. The new regulations could require the installation of new equipment, which may cause us to incur substantial costs. Until the EPA publishes its final standards and the EPA issues its corresponding implementing regulations, interim requirements established through the EPA 2013 Vessel General Permit (VGP) and the United States Coast Guard (“USCG”) ballast water regulations, and any applicable state and local government requirements, continue to apply.

Marine Environment Protection Committee (MEPC 80) continued discussions of amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. These amendments introduce requirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbon intensity of international shipping. To achieve a 40% reduction in carbon emissions by 2030 compared to 2008, shipping companies are required to include: (i) a technical requirement to operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (“CII”). The Energy Efficiency Existing Ship Index (EEXI) is required to be calculated for ships of 400 gross tonnage and above. The IMO and MEPC will calculate “required” EEXI levels based on the vessel’s technical design, such as vessel type, date of creation, size and baseline. Additionally, an “attained” EEXI will be calculated to determine the actual energy efficiency of the vessel. A vessel’s attained EEXI must be less than the vessel’s required EEXI. Non-compliant vessels will have to upgrade their engine to continue to travel. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual operational CII. The vessel’s attained CII must be lower than its required CII. Vessels that continually receive subpar CII ratings will be required to submit corrective action plans to ensure compliance. MEPC 79 adopted amendments to MARPOL Annex VI, Appendix IX to include the attained and required CII values, the CII rating and attained EEXI for existing ships in the required information to be submitted to the IMO Ship Fuel Oil Consumption Database. The amendments will enter into force on May 1, 2024.

Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an approved Ship Energy Efficiency Management Plan, or SEEMP, on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content. MEPC 75 also approved draft amendments to MARPOL Annex I to prohibit the use and carriage for use as fuel of heavy fuel oil by ships in Arctic waters on and after July 1, 2024. The draft amendments introduced at MEPC 75 were adopted at the MEPC 76 session held on June 2021, entered into force on November 1, 2022 and became effective on January 1, 2023.

Regulations relating to low sulfur emissions that came into effect on January 1, 2020 may adversely affect our revenues and profitability.

Under maritime regulations that came into effect on January 1, 2020, ships will have to reduce sulfur emissions from 3.5% to 0.5% m/m, for which the principal solutions are the use of scrubbers or buying fuel with low sulfur content which is more expensive than standard marine fuel. We do not currently intend to install scrubbers on our fleet. Our fuel costs and fuel inventories have increased as a result of these sulfur emission regulations, but the effect is limited by the fact that our vessels are under time charter agreements and these costs are paid by the charterer. However, fuel costs are taken into account by the charterer in determining the amount of time charter hire and, therefore, fuel costs also indirectly affect time charter rates. Low sulfur fuel is more expensive than standard marine fuel containing 3.5% sulfur content and may become more expensive or difficult to obtain as a result of increased demand, which may have a material adverse effect on our business, results of operations, cash flows and financial condition.

If our vessels fail to maintain their class certification and/or fail any annual survey, intermediate survey, drydocking or special survey, those vessels would be unable to carry cargo, thereby reducing our revenues and profitability and violating certain covenants in our loan agreements.

A vessel must undergo annual surveys, intermediate surveys, drydockings 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 drydocked at least once or, more typically, twice within a five-year survey cycle for inspection of the underwater parts of such vessel (younger vessels can perform intermediate surveys “in-water”, i.e. without drydocking).

If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable. That status could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society that is a member of the International Association of Classification Societies (“IACS”). All of our vessels that we have purchased, and may agree to purchase in the future, must be certified as being "in class" 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. We have all of our vessels, and intend to have all vessels that we acquire in the future, classed by IACS members. See Item 4: “Information on the Company – Business Overview – Environmental and Other Regulations in the Shipping Industry” for more information.

Rising fuel prices may adversely affect our results of operations and the marketability of our vessels.

Fuel (bunkers) is a significant, if not the largest, operating expense for many of our shipping operations when our vessels are under voyage charter. When a vessel is operating under a time charter, these costs are paid by the charterer. However, fuel costs are taken into account by the charterer in determining the amount of time charter hire and, therefore, fuel costs also indirectly affect time charter rates. Fuel prices are highly based and are highly correlated to the price of oil. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, such as the recent war between Russia and Ukraine, which remains ongoing as of the date of this annual report, supply and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Fuel prices had been at historically high levels through mid-2014, but by the first quarter of 2016 fuel prices had fallen by more than 50% and by 2018 and 2019, the price of fuel fluctuated, from a low of $42.53/bbl (for West Texas Intermediate, “WTI”) in December 2018 to $61.0/bbl in December 2019. In 2020, the COVID-19 pandemic resulted in crude oil prices hitting a major slump as oil demand drastically declined following lockdowns and travel restrictions. By April 2020, prices fell to $18.44/bbl, after OPEC and Russia failed to agree on maintaining production cuts, and Saudi Arabia increased its own production. As the COVID-19 pandemic continued to spread around the world, oil prices dropped to historical lows during 2020 and closed the year at $43.52/bbl. Oil traded lower throughout the year, as rising COVID-19 infections and new strains sparked demand concerns. Prices edged slightly higher in December 2020, ranging around $48/bbl, upon rolling out of the COVID-19 vaccines, coupled by Saudi Arabia’s announcement regarding a large output reduction for February and March 2021. In February 2021, the average WTI stood at $59/bbl, the highest value since the start of the pandemic, with hopes of steady vaccination roll out and OPEC production limits having led to cautious optimism at global markets. Prices fluctuated throughout the year, with the annual average price reaching about $68/bbl; a significant increase compared to the 2020 average. Since then, we have seen a significant increase in oil prices, after Western countries imposed sanctions on Russia, raising fears of supply disruptions from one of the largest producers of oil and gas. During 2022, oil prices fluctuated significantly. Following Russia’s invasion in Ukraine and fears over low crude oil inventories, prices rose to over $130/bbl in March 2022. Prices starting waning towards the end of 2022 and the beginning of 2023, to around $80/bbl, briefly rising to around $91/bbl in September 2023, before dropping to around $72/bbl in December 2023. Oil prices remained high and well above their 10-year average of about $63/bbl (for WTI) throughout 2023. At year-end 2023, the price of WTI/bbl was $71.33 and currently stands at around $80/bbl. Prices are currently influenced by concerns over the Red Sea crisis amid an escalating conflict in the Middle East, further economic slowdown fears and central banks’ efforts to address inflation. Any increases in the price of fuel, especially if exceeding its 10-year average may adversely affect our operations, particularly if such increases are combined with lower drybulk rates.

Upon redelivery of vessels at the end of a period time or trip time charter, we may be obligated to repurchase bunkers on board at prevailing market prices, which could be materially higher than fuel prices at the inception of the charter period. We may also be obligated to value our bunkers inventories on board at the end of a period time or trip time charter, at a lower value than the acquisition value, if prevailing market prices are significantly lower at the time of the vessel redelivery from the charterer.

Rising crew costs may adversely affect our profits.

Crew costs are a significant expense for us under our charters. There is a limited supply of well-qualified crew. We generally bear crewing costs under our charters. An increase in the world vessel operating fleet will likely result in higher demand for crews which, in turn, might drive crew costs further up. Moreover, the COVID-19 pandemic had affected the rotation of our crew members due to quarantine restrictions placed on embarking and disembarking on our vessels. Any such disruptions could impact the cost of rotating our crew. Any increase in crew costs may adversely affect our profitability, especially if such increase is combined with lower drybulk rates.

Maritime claimants could arrest or attach our vessels, which would interrupt our business or have a negative effect on our cash flows.

Crew members, suppliers of goods and services to a vessel, shippers of cargo, lenders and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting or attaching a vessel through foreclosure proceedings. The arresting or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums to have the arrest or attachment lifted which would have a material adverse effect on our financial condition and results of operations.

In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel that is subject to the claimant's maritime lien, and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert "sister ship" liability against one of our vessels for claims relating to another of our vessels.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

We expect that our vessels will call in ports in South America and other areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims, which could have an adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

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

A government could requisition for title or seize one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition one or more of our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Even if we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of the payment would be uncertain. Government requisition of one or more of our vessels could have a material adverse effect on our financial condition and results of operations.

World events outside our control may negatively affect our ability to operate, thereby reducing our revenues and results of operations or our ability to obtain additional financing, thereby restricting the implementation of our business strategy.

We operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts, including the continued global trade war between the U.S. and China, current political instability in the Middle East, terrorist or other attacks, war or international hostilities. Terrorist attacks such as the attacks in the United States on September 11, 2001 and similar attacks that followed, the continuing response to these attacks, as well as the threat of future terrorist attacks, continue to cause uncertainty in the world financial markets and may affect our business, results of operations and financial condition. The continuing conflicts in Iraq, Iran, Afghanistan, Libya, Egypt, Ukraine, Syria, Palestine and the Red Sea region, amongst others, 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. More recently, the trade and financial sanctions imposed on Russia due to its invasion in Ukraine, have caused turbulence in the global markets. These uncertainties could also have a material adverse effect on our ability to obtain additional financing on terms acceptable to us or at all. Terrorist attacks on vessels may in the future also negatively affect our operations and financial condition and directly impact our vessels or our customers, including most recently, disruptions in the Red Sea in connection with the conflict between Israel and Hamas. Future terrorist attacks could result in increased volatility and turmoil of the financial markets in the United States of America and globally and could result in an economic recession in the United States of America or the world. Additionally, any escalations between the North Atlantic Treaty Organization countries and Russia could result in retaliation from Russia that could potentially affect the shipping industry. In addition, the continued global trade war between the U.S. and China, including the introduction by the U.S. of tariffs on selected imported goods, mainly from China, may provoke further retaliation measures from the affected countries which has the potential to impede trade. Any of these occurrences could have a material adverse impact on our financial condition, costs and operating cash flows.

Disruptions in world financial markets and the resulting governmental action could have a material adverse impact on our ability to obtain financing, our results of operations, financial condition and cash flows, and could cause the market price of our common stock to decline.

Europe, the United States and other parts of the world have exhibited weak economic conditions, are exhibiting volatile economic trends or have been in a recession. For example, during the 2008-2009 crisis, the credit markets in the United States experienced sudden and significant contraction, deleveraging and reduced liquidity, and the United States federal government and state governments have since implemented a broad variety of governmental action and/or new regulation of the financial markets. Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations and other requirements. The SEC, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws. A number of financial institutions and especially banks that traditionally provided debt to shipping companies like ours have experienced serious financial difficulties and, in some cases, have entered bankruptcy proceedings or are in regulatory enforcement actions. As a result, access to credit markets around the world has been reduced. The extension of Quantitative Easing (“QE”) and more recently the reversal of it, high levels of Non-Performing Loans (“NPLs”) in Europe and stricter lending requirements may reduce bank lending capacity and/or make the terms of any lending more onerous.

We face risks related to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. Major market disruptions and the changes in market conditions and regulatory changes worldwide may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, including proposals to reform the financial system, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, and might cause the price of our common stock on the Nasdaq Capital Market to decline.

In addition, public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, and the operations of our customers.

If there are further disruptions in world financial markets, we may require substantial additional financing to fund acquisitions of additional vessels and to implement our business plans. Sufficient financing may not be available on terms that are acceptable to us or at all. If we cannot raise the financing we need in a timely manner and on acceptable terms, we may not be able to acquire the vessels necessary to implement our business plans and consequently we may not be able to pay dividends.

We rely on information technology, and if we are unable to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, our operations could be disrupted and our business could be negatively affected.

We rely on information technology networks and systems to process, transmit and store electronic and financial information; to capture knowledge of our business; to coordinate our business across our operation bases; and to communicate internally and with customers, suppliers, partners and other third-parties. These information technology systems, some of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns, hardware or software failures, power outages, computer viruses, cyberattacks, telecommunication failures, user errors or catastrophic events. Our information technology systems are becoming increasingly integrated, so damage, disruption or shutdown to the system could result in a more widespread impact. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations. If our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, our operations could be disrupted and our business could be negatively affected. In addition, cyber-attacks could lead to potential unauthorized access and disclosure of confidential information and data loss and corruption. There is no assurance that we will not experience these service interruptions or cyber-attacks in the future. Further, as the methods of cyber-attacks continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyber-attacks.

Moreover, cyber-attacks against the Ukrainian government and other countries in the region have been reported in connection with the ongoing conflict between Russia and Ukraine. It is possible that such attacks could have collateral effects on global critical infrastructure or financial institutions, which could adversely affect our business, operating results and financial condition. At this time, it is difficult to assess the likelihood of such threat and any potential impact.

Further, in July 2023, the SEC adopted amendments to its rules on cybersecurity risk management, strategy, governance, and incident disclosure. The amendments, require us to report material cybersecurity incidents involving our information systems and periodic reporting regarding our policies and procedures to identify and manage cybersecurity risks, among other disclosures (please refer to Part II, Item 16K “Cybersecurity”).

Our operating results are subject to seasonal fluctuations, which could affect our operating results and the amount of available cash with which we service our debt or could pay dividends.

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter rates. To the extent we operate vessels in the spot market, this seasonality may result in quarter-to-quarter volatility in our operating results which could affect our ability to pay dividends to our common shareholders. For example, 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. The celebration of Chinese New Year in the first quarter of each year also results in lower volumes of seaborne trade into China during this period. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. This seasonality has not materially affected our operating results and the amount of available cash with which we service our debt or could pay dividends, because our fleet is currently employed on period time charters, but this seasonality may materially affect our operating results if our vessels are employed in the spot market in the future.

Reliance on suppliers may limit our ability to obtain supplies and services when needed.

We rely on a significant number of third party suppliers of consumables, spare parts and equipment to operate, maintain, repair and upgrade our fleet of ships. Delays in delivery or unavailability or poor quality of supplies could result in off-hire days due to consequent delays in the repair and maintenance of our fleet or lead to our time charters being terminated. This would negatively impact our revenues and cash flows. Cost increases could also negatively impact our future operations.

The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates can result in higher than market rates and reductions in our stockholders’ equity as well as charges against our income, while there is no assurance of the credit worthiness of our counterparties.

We have entered into interest rate swaps generally for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness under our credit facilities which were advanced at floating rates based on Secured Overnight Financing Rate (“SOFR”). Interest rates and currency hedging may result in us paying higher than market rates. As of December 31, 2023, the aggregate notional amount of interest rate swaps relating to our fleet as of such date was $10.0 million. There is no assurance that our derivative contracts or any that we enter into in the future will provide adequate protection against adverse changes in interest rates or that our bank counterparties will be able to perform their obligations. In addition, as a result of the implementation of new regulation of the swaps markets in the United States, the European Union and elsewhere over the next few years, the cost of interest rate swaps may increase or suitable hedges may not be available. While we monitor the credit risks associated with our bank counterparties, there can be no assurance that these counterparties would be able to meet their commitments under our derivative contracts or any future derivative contract. Our bank counterparties include financial institutions that are based in European Union countries that have faced and might face again financial stress. The potential for our bank counterparties to default on their obligations under our derivative contracts may be highest when we are most exposed to the fluctuations in interest and currency rates such contracts are designed to hedge, and several or all of our bank counterparties may simultaneously be unable to perform their obligations due to the same events or occurrences in global financial markets. To the extent our existing interest rate swaps do not, and future derivative contracts may not, qualify for treatment as hedges for accounting purposes, we would recognize fluctuations in the fair value of such contracts in our statement of operations. In addition, to the extent any future derivative contracts qualify for treatment as hedges for accounting purposes, the effective portion of changes in the fair value of our derivative contracts would be recognized in “Accumulated Other Comprehensive Income/(Loss)” affecting our retained earnings, and may affect compliance with the net worth covenant requirements in our credit facilities. Changes in the fair value of our derivative contracts that do not qualify for treatment as hedges for accounting and financial reporting purposes affect, among other things, our net income and our earnings per share. For additional information see “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk”.

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 involved in various litigation matters from time to time. 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 and operating cash flows.

Risks involved with operating ocean-going vessels could affect our business and reputation, which may reduce our revenues.

The operation of an ocean-going vessel carries inherent risks. These risks include, among others, the possibility of:

●	marine disaster;
●	piracy;
●	environmental accidents;
●	grounding, fire, explosions and collisions;
●	cargo and property losses or damage;
●	business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes, adverse weather conditions, natural disasters or other disasters outside our control, public health emergencies such as the COVID-19 outbreak; and

●	work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.

Such occurrences could result in death or injury to persons, loss of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates, and damage to our reputation and customer relationships generally. Any of these circumstances or events could increase our costs or lower our revenues, which could result in reduction in the market price of our shares of common stock. The involvement of our vessels in an environmental disaster may harm our reputation as a safe and reliable vessel owner and operator.

The operation of drybulk carriers has certain unique operational risks which could affect our business, financial condition, results of operations and ability to pay dividends.

The operation of drybulk carriers has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the ship can be a risk factor. 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 vessels 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. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Company Risk Factors

We depend entirely on Eurobulk and Eurobulk FE to manage and charter our fleet, which may adversely affect our operations if Eurobulk or Eurobulk FE fails to perform its obligations.

We have no employees and we currently contract the commercial and technical management of our fleet, including crewing, maintenance and repair, to Eurobulk and Eurobulk FE, our affiliated ship management companies. We may lose a Manager’s services or a Manager may fail to perform its obligations to us which could have a material adverse effect on our financial condition and results of our operations. Although we may have rights against either Manager if it defaults on its obligations to us, you will have no recourse against either Manager. Further, we will need to seek approval from our lenders to change either Manager as our ship manager.

Because the Managers are privately held companies, there is little or no publicly available information about them and there may be very little advance warning of operational or financial problems experienced by the Managers that may adversely affect us.

The ability of a Manager to continue providing services for our benefit will depend in part on its own financial strength. Circumstances beyond our control could impair a Manager’s financial strength, and because each Manager is privately held it is unlikely that information about its financial strength would become public unless such Manager began to default on its obligations. As a result, there may be little advance warning of problems affecting the Managers, even though these problems could have a material adverse effect on us.

We may have difficulty properly managing our growth through acquisitions of new or secondhand vessels and we may not realize expected benefits from these acquisitions, which may negatively impact our cash flows, liquidity and our ability to pay dividends to our stockholders.

We intend to grow our business by ordering newbuild vessels and through selective acquisitions of high-quality secondhand vessels to the extent that they are available. Our future growth will primarily depend on:

•	the operations of the shipyards that build any newbuild vessels we may order;

•	the availability of employment for our vessels;
•	locating and identifying suitable high-quality secondhand vessels;
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•	obtaining newbuild contracts at acceptable prices;
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•	obtaining required financing on acceptable terms;
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•	consummating vessel acquisitions;
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•	enlarging our customer base;
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•	hiring additional shore-based employees and seafarers;
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•	continuing to meet technical and safety performance standards; and
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•	managing joint ventures, partnerships or significant acquisitions and integrating the new ships into our fleet.
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Ship values are correlated with charter rates. During periods in which charter rates are high, ship values are generally high as well, and it may be difficult to consummate ship acquisitions or enter into shipbuilding contracts at favorable prices. During periods in which charter rates are low and employment is scarce, ship values are low and any vessel acquired without an attached time charter will automatically incur additional expenses to operate, insure, maintain and finance the ship, thereby significantly increasing our operating and finance costs. In addition, any vessel acquisition may not be profitable at or after the time of acquisition and may not generate cash flows sufficient to justify the investment. We may not be successful in executing any future growth plans and we cannot give any assurance that we will not incur significant expenses and losses in connection with such growth efforts. Other risks associated with vessel acquisitions that may harm our business, financial condition and operating results include the risks that we may:

•	fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
•	be unable to hire, train or retain qualified shore-based and seafaring personnel to manage and operate our growing business and fleet;
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•	decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;
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•	significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
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•	incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired; or
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•	incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
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If we fail to properly manage our growth through acquisitions of newbuild or secondhand vessels we may not realize expected benefits from these acquisitions, which may negatively impact our cash flows, liquidity and our ability to pay dividends to our stockholders. Unlike newbuild vessels, secondhand vessels typically do not carry warranties as to their condition. While we generally inspect existing vessels prior to purchase, such an inspection would normally not provide us with as much knowledge of a vessel’s condition as we would possess if it had been built for us and operated by us during its life. Repairs and maintenance costs for secondhand vessels are difficult to predict and may be substantially higher than for vessels we have operated since they were built. These costs could decrease our cash flows, liquidity and our ability to pay dividends to our stockholders.

Our business depends upon certain members of our senior management who may not necessarily continue to work for us.

Our future success depends to a significant extent upon our Chairman and Chief Executive Officer, Aristides J. Pittas, certain members of our senior management and our Managers. Mr. Pittas has substantial experience in the drybulk shipping industry and has worked with us and our Managers for many years. He, our Managers and certain members of our senior management team are crucial to the execution of our business strategies and to the growth and development of our business. If these individuals were no longer to be affiliated with us or our Managers, or if we were to otherwise cease to receive services from them, we may be unable to recruit other employees with equivalent talent and experience, which could have a material adverse effect on our financial condition and results of operations.

Certain of our shareholders hold shares of EuroDry in amounts to give them a significant percentage of the total outstanding voting power represented by our outstanding shares.

As of March 31, 2024, Friends Dry Investment Company Inc., or Friends Dry, our largest shareholder and an affiliate of the Company, partly owned by our Chairman and CEO, Vice Chairman and people affiliated or working with Eurobulk amongst others, owns approximately 31% of the outstanding shares of our common stock and unvested incentive award shares, representing 31% of total voting power. As a result of this share ownership and for as long as Friends Dry owns a significant percentage of our outstanding common stock, Friends Dry will be able to influence the outcome of any shareholder vote, including the election of directors, the adoption or amendment of provisions in our amended and restated articles of incorporation or bylaws, as amended, and possible mergers, corporate control contests and other significant corporate transactions.

Our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands, and as such we are entitled to exemption from certain Nasdaq corporate governance standards. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

Our Company's corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands. Therefore, we are exempt from many of Nasdaq's corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq corporate governance practices, and the establishment and composition of an audit committee and a formal written audit committee charter. For a list of the practices followed by us in lieu of Nasdaq's corporate governance rules, we refer you to the section of this annual report entitled "Board Practices—Corporate Governance" under Item 6.

Our growth depends on our ability to expand relationships with existing charterers, establish relationships with new customers and obtain new time charters, for which we will face substantial competition from new entrants and established companies with significant resources.

One of our principal objectives is to acquire additional vessels in conjunction with entering into additional long-term, fixed-rate charters for these vessels. The process of obtaining new long-term, fixed-rate charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. Generally, we compete for charters based upon charter rate, customer relationships, operating expertise, professional reputation and vessel specifications, including size, age and condition.

In addition, as vessels age, it can be more difficult to employ them on profitable time charters, particularly during periods of decreased demand in the charter market. Accordingly, we may find it difficult to continue to find profitable employment for our vessels as they age.

We face substantial competition from a number of experienced companies, including state-sponsored entities and financial organizations. Some of these competitors have significantly greater financial resources than we do, and can therefore operate larger fleets and may be able to offer better charter rates. In the future, we may also face competition from reputable, experienced and well-capitalized marine transportation companies, including state-sponsored entities, that do not currently own vessels, but may choose to do so. Any increased competition may cause greater price competition for time charters, as well as for the acquisition of high-quality secondhand vessels and newbuild vessels. Further, since the charter rate is generally considered to be one of the principal factors in a charterer’s decision to charter a vessel, the rates and available tonnage offered by our competitors can place downward pressure on rates throughout the charter market. As a result of these factors, we may be unable to charter our vessels, expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows, including cash available for dividends to our stockholders.

We and our principal officers have affiliations with the Managers that could create conflicts of interest detrimental to us.

Our principal officers are also principals, officers and employees of the Managers, which are our ship management companies. These responsibilities and relationships could create conflicts of interest between us and the Managers. Conflicts may also arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus other vessels that are or may be managed in the future by the Managers. Circumstances in any of these instances may make one decision advantageous to us but detrimental to the Managers and vice versa. Eurobulk currently manages vessels for EuroDry, and two bulkers that are not owned by EuroDry, potentially causing conflicts such as those described above. Further, it is possible that in the future Eurobulk may manage additional vessels which will not belong to EuroDry and in which the Pittas family may have non-controlling, little or even no power or participation, and Eurobulk may not be able to resolve all conflicts of interest in a manner beneficial to us and our shareholders.

Companies affiliated with Eurobulk or our officers and directors may acquire vessels that compete with our fleet.

Companies affiliated with Eurobulk or our officers and directors own drybulk carriers and may acquire additional drybulk carriers in the future. These vessels could be in competition with our fleet and other companies affiliated with Eurobulk might be faced with conflicts of interest with respect to their own interests and their obligations to us. Eurobulk, Friends Dry and Aristides J. Pittas, our Chairman and Chief Executive Officer, have granted us a right of first refusal to acquire any drybulk vessel that any of them may consider for acquisition in the future. In addition, Aristides J. Pittas will use his best efforts to cause any entity with respect to which he directly or indirectly controls to grant us this right of first refusal. Were we, however, to decline any such opportunity offered to us or if we did not have the resources or desire to accept any such opportunity, Eurobulk, Friends Dry and Aristides J. Pittas, and any of their respective affiliates, could acquire such vessels.

Our officers do not devote all of their time to our business.

Our officers are involved in other business activities that may result in their spending less time than is appropriate or necessary in order to manage our business successfully. Our Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, Internal Auditor and Secretary are not employed directly by us, but rather their services are provided pursuant to our Master Management Agreement with Eurobulk. All our corporate officers hold similar positions with Euroseas Ltd. (“Euroseas”), a publicly listed company from which EuroDry was spun-off in May 2018, and our CEO is also President of Eurobulk and involved in the management of other affiliates and member of the board of other companies. Therefore, our officers may spend a material portion of their time providing services to other companies. They may also spend a material portion of their time providing services to Eurobulk and its affiliates on matters unrelated to us.

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 or to make dividend payments.

We are a holding company and our subsidiaries 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 to you depends on our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries, we may be unable or our Board of Directors may exercise its discretion not to pay dividends.

We may not be able to pay dividends.

We have not declared any dividends on our common stock and we may not earn sufficient revenues or we may incur expenses or liabilities that would reduce or eliminate the cash available for distribution as dividends. Our loan agreements may also limit the amount of dividends we can pay under some circumstances based on certain covenants included in the loan agreements.

The declaration and payment of any dividends will be subject at all times to the discretion of our Board of Directors. The timing and amount of dividends will depend on our earnings, financial condition, cash requirements and availability, restrictions in our loan agreements, growth strategy, charter rates in the drybulk shipping industry, the provisions of Marshall Islands law affecting the payment of dividends and other factors. Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares), but, if there is no surplus, dividends may be declared out of the net profits (basically, the excess of our revenue over our expenses) for the fiscal year in which the dividend is declared or the preceding fiscal year. Marshall Islands law also prohibits the payment of dividends while a company is insolvent or if it would be rendered insolvent upon the payment of a dividend. As a result, we may not be able to pay dividends.

If we are unable to fund our future capital expenditures, we may not be able to continue to operate some of our vessels, which would have a material adverse effect on our business and our ability to pay dividends.

In order to fund our future capital expenditures, we may be required to incur additional borrowing or raise capital through the sale of debt or equity securities. Our ability to access the capital markets through future offerings may be limited by our financial condition at the time of any such offering as well as by adverse market conditions resulting from, among other things, general economic conditions and contingencies and uncertainties that are beyond our control. Our failure to obtain the funds for necessary future capital expenditures would limit our ability to continue to operate some of our vessels and could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends. Even if we are successful in obtaining such funds through financings, the terms of such financings could further limit our ability to pay dividends.

Our existing loan agreements contain restrictive covenants that may limit our liquidity and corporate activities.

Our existing loan agreements 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;
●	make capital expenditures;
●	change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
●	sell our vessels.

Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions. The lenders' interests may be different from our interests, and we may not be able to obtain the lenders' permission when needed. This may prevent us from taking actions that are in our best interest.

Servicing future debt would limit funds available for other purposes.

To finance our fleet, we have incurred secured debt under loan agreements for our vessels. We also currently expect to incur additional secured debt to finance the acquisition of additional vessels we may decide to acquire in the future. We must dedicate a portion of our cash flow from operations to pay the principal and interest on our debt. These payments limit funds otherwise available for working capital expenditures and other purposes. As of December 31, 2023, we had total bank debt of $104.8 million. Our debt repayment schedule as of December 31, 2023 requires us to repay $18.1 million of debt during 2024 and $9.7 million of debt during 2025. As of March 31, 2024, we repaid $3.3 million of our total debt, which resulted in outstanding debt of $101.5 million. If we are unable to service our debt, it could have a material adverse effect on our financial condition, results of operations and cash flows.

A further rise in interest rates could cause an increase in our costs and have a material adverse effect on our financial condition and results of operations. To finance vessel purchases, we have borrowed, and may continue to borrow, under loan agreements that provide for periodic interest rate adjustments based on indices that fluctuate with changes in market interest rates. If interest rates increase significantly, it would increase our costs of financing our acquisition of vessels, which could have a material adverse effect on our financial condition and results of operations. Any increase in debt service would also reduce the funds available to us to purchase other vessels.

Our ability to obtain additional debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers.

The actual or perceived credit quality of our charterers, and any defaults by them, may be one of the factors that materially affect our ability to obtain the additional debt financing that we will require to purchase additional vessels or may significantly increase our costs of obtaining such financing. We may be unable to obtain additional financing, or may be able to obtain additional financing only at a higher-than-anticipated cost, which may materially affect our results of operations, cash flows and our ability to implement our business strategy.

As we expand our business, our Managers may need to upgrade our operations and financial systems, and add more staff and crew. If we cannot upgrade these systems or recruit suitable employees, our performance may be adversely affected.

Our Managers’ current operating and financial systems may not be adequate if we expand the size of our fleet, and our attempts to improve those systems may be ineffective. In addition, if we expand our fleet, we will have to rely on our Managers to recruit suitable additional seafarers and shore-side administrative and management personnel. Our Managers may not be able to continue to hire suitable employees as we expand our fleet. If our Managers’ affiliated crewing agent encounters business or financial difficulties, we can make satisfactory arrangements with unaffiliated crewing agents or else we may not be able to adequately staff our vessels. If we are unable to operate our financial and operations systems effectively or to recruit suitable employees, our performance may be materially adversely affected.

We may have difficulty properly managing our planned growth through acquisitions of new or secondhand vessels and we may not realize expected benefits from these acquisitions, which may negatively impact our cash flows, liquidity and our ability to pay dividends to our stockholders. ****

We intend to grow our business through selective acquisitions of secondhand vessels or ordering newbuilding vessels. Our future growth will primarily depend on our ability to locate and acquire suitable additional vessels and successfully supervise any newbuilds we may order and obtain required debt or equity financing on acceptable terms.

The delivery of any drybulk vessels we might decide to acquire, whether newbuildings or secondhand vessels, could be delayed or certain events may arise which could result in us not taking delivery of a vessel, such as a total loss of a vessel, a constructive loss of a vessel, substantial damage to a vessel prior to delivery or construction not in accordance with agreed upon specification or with substantial defects. A delay in the delivery to us of any purchased vessel, or the failure of the shipyard to deliver a vessel at all, could cause us to breach our obligations under a related charter and could adversely affect our earnings, our financial condition and the amount of dividends, if any, that we pay in the future. In addition, the delivery of any of these vessels with substantial defects could have similar consequences.

A shipyard could fail to deliver a newbuild 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;
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•	bankruptcy or other financial crisis of the shipyard;
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•	a backlog of orders at the shipyard;
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•	disputes between us and the shipyard regarding contractual obligations;
•	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
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•	shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers.
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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.

Credit market volatility may affect our ability to refinance our existing debt or incur additional debt.

The credit markets have recently experienced extreme volatility and disruption, which has limited credit capacity for certain issuers, and lenders have requested shorter terms and lower leverage ratios. The market for new debt financing is extremely limited and in some cases not available at all. If current levels of market disruption and volatility continue or worsen, we may not be able to refinance our existing debt or incur additional debt, which may require us to seek other funding sources to meet our liquidity needs or to fund planned expansion.

Labor interruptions could disrupt our business.

Our vessels are manned by masters, officers and crews that are employed by third parties. If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out normally and could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

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

Our success depends to a significant extent upon the abilities and efforts of our management team. Our success will depend upon our and our Managers’ ability to hire additional employees and to retain key members of our management team. The loss of any of these individuals could adversely affect our business prospects and financial condition and operating cash flows. Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not currently intend to maintain "key man" life insurance on any of our officers.

Our vessels may suffer damage and may face unexpected drydocking costs, which could affect our cash flows and financial condition.

If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover. The loss of earnings while these vessels are being repaired and reconditioned, as well as the actual cost of these repairs, would decrease our earnings. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located near our vessels’ positions. The loss of earnings and any costs incurred while these vessels are forced to wait for space or to steam to more distant drydocking facilities would decrease our earnings.

Purchasing and operating previously owned vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings. The aging of our fleet may result in increased operating costs in the future, which could adversely affect our results of operations.

Although we inspect the secondhand vessels prior to purchase, this inspection does not provide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that it would have had if these vessels had been built for and operated exclusively by us. Generally, we do not receive the benefit of warranties on secondhand vessels.

In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. As of March 31, 2024, the vessels in our fleet had an average age of approximately 13.1 years. As our vessels age, they may become less fuel efficient and more costly to maintain and will not be as advanced as more recently constructed vessels due to improvements in design and engine technology. Rates for cargo insurance, paid by charterers, also increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in 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.

In addition, charterers actively discriminate against hiring older vessels. For example, Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton that 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 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 again profitably or even generate positive cash flows during the remainder of their useful lives even if the market rates improve, which could adversely affect our earnings. As of March 31, 2024, five of our vessels are over 18 years of age.

If we sell vessels, we are not certain that the price for which we sell them will equal their carrying amount at that time.

Unless we set aside reserves for vessel replacement, at the end of a vessel's useful life, our revenue will decline, which would adversely affect our cash flows and income.

As of March 31, 2024, the vessels in our fleet had an average age of approximately 13.1 years. Unless we maintain cash reserves for vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimate the useful life of our vessels to be 25 years from the completion of their construction. Our cash flows and income are dependent on the revenues we earn by chartering our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, financial condition and results of operations may be materially adversely affected. Any reserves set aside for vessel replacement would not be available for other cash needs or dividends.

Technological innovation could reduce our charter income and the value of our vessels.

The charter rates and the value and operational life of a vessel are determined by a number of factors including the vessel's efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel's physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new vessels are built that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels and the resale value of our vessels could significantly decrease. As a result, our available cash could be adversely affected.

A decrease in spot charter rates may provide an incentive for some charterers to default on their charters. 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 enter into, among other things, charter-party agreements. When we enter into a time charter, charter rates under that charter may be fixed for the term of the charter. Such agreements subject us to counterparty risks. The ability and willingness 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 maritime and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses. If the spot charter rates or short-term time charter rates in the drybulk shipping industry remain 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. In addition, in depressed market conditions, our charterers may no longer need a vessel that is currently under charter or may be able to obtain a comparable vessel at lower rates. As a result, charterers may seek to renegotiate the terms of their existing charter parties or avoid their obligations under those contracts, especially when the contracted charter rates are significantly above market levels. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters may be at lower rates given currently decreased charter rate levels. As a result, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends in the future and compliance with covenants in our credit facilities.

We may not have adequate insurance to compensate us adequately for damage to, or loss of, our vessels.

We procure insurance for our fleet against risks commonly insured against by vessel owners and operators which includes hull and machinery insurance, protection and indemnity insurance (which, in turn, includes environmental damage and pollution insurance) and war risk insurance and freight, demurrage and defense insurance for our fleet. We generally do not maintain insurance against loss of hire which covers business interruptions that result in the loss of use of a vessel except in cases we consider such protection appropriate. We may not be adequately insured against all risks and we may not be able to obtain adequate insurance coverage for our fleet in the future. The insurers may not pay particular claims. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Our insurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs. Since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. Moreover, the insurers may default on any claims they are required to pay. If our insurance is not enough to cover claims that may arise, it may have a material adverse effect on our financial condition, results of operations and cash flows.

Because we obtain some of our insurance through protection and indemnity associations (“P&I Associations”), we may also be subject to calls in amounts based not only on our own claim records, but also the claim records of other members of the P&I Associations.

We are indemnified for legal liabilities incurred while operating our vessels through membership in P&I Associations or clubs. P&I Associations are mutual insurance associations whose members must contribute to cover losses sustained by other association members. The objective of a P&I Association is to provide mutual insurance based on the aggregate tonnage of a member’s vessels entered into the association. Claims are paid through the aggregate premiums of all members of the association, although members remain subject to calls for additional funds if the aggregate premiums are insufficient to cover claims submitted to the association. We cannot assure you that the P&I Association to which we belong will remain viable or that we will not become subject to additional funding calls which could adversely affect us. Claims submitted to the association may include those incurred by members of the association as well as claims submitted to the association from other P&I Associations with which our P&I Association has entered into inter-association agreements.

We may be subject to calls in amounts based not only on our claim records but also the claim records of other members of the P&I Associations through which we receive insurance coverage for tort liability, including pollution-related liability. Our payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Our vessels are exposed to operational risks, including terrorism, cyber-terrorism and piracy that may not be adequately covered by our insurance.

The operation of any vessel includes risks such as weather conditions, mechanical failure, collision, fire, contact with floating objects, cargo or property loss or damage and business interruption due to political circumstances in countries, piracy, terrorist and cyber-terrorist attacks, armed hostilities and labor strikes. Such occurrences could result in death or injury to persons, loss, damage or destruction of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to our reputation and customer relationships generally.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide had generally decreased since 2013, in 2023, the number of piracy acts slightly increased compared to 2022. Sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in the Sulu Sea and the Gulf of Guinea, with drybulk vessels and tankers particularly vulnerable to such attacks. Acts of piracy could result in harm or danger to the crews that man our vessels.

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 the employment of 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 earnings.

We may not be adequately insured against all risks, and our insurers may not pay particular claims. With respect to war risks insurance, which we usually obtain for certain of our vessels making port calls in designated war zone areas, such insurance may not be obtained prior to one of our vessels entering into an actual war zone, which could result in that vessel not being insured. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Under the terms of our credit facilities, we will be subject to restrictions on the use of any proceeds we may receive from claims under our insurance policies. Furthermore, in the future, we may not be able to maintain or obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the P&I Associations through which we receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs in the event of a claim or decrease any recovery in the event of a loss. If the damages from a catastrophic oil spill or other marine disaster exceeded our insurance coverage, the payment of those damages could have a material adverse effect on our business and could possibly result in our insolvency.

Recent action by the IMO’s Maritime Safety Committee and U.S. agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time. We do not carry cyber-attack insurance, which could have a material adverse effect on our business, financial condition and results of operations.

In general, we do not carry loss of hire insurance. Occasionally, we may decide to carry loss of hire insurance when our vessels are trading in areas where a history of piracy has been reported. Loss of hire insurance covers the loss of revenue during extended vessel off-hire periods, such as those that occur during an unscheduled drydocking or unscheduled repairs due to damage to the vessel. Accordingly, any loss of a vessel or any extended period of vessel off-hire, due to an accident or otherwise, could have a material adverse effect on our business, financial condition and results of operations.

If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government, the European Union, the United Nations, or other governmental authorities, it could lead to monetary fines or other penalties and/or adversely affect our reputation and the market for our shares of common stock and its trading price.

Although none of our vessels have called on ports located in countries or territories that are the subject of country-wide or territory-wide comprehensive sanctions or embargoes imposed by the U.S. government or other applicable governmental authorities (“Sanctioned Jurisdictions”) in violation of sanctions or embargo laws during 2023, and we endeavor to take precautions reasonably designed to mitigate such risks, it is possible that, in the future, vessels in our fleet may call on ports located in Sanctioned Jurisdictions on charterers’ instructions and/or without our consent in violation of applicable sanctions laws. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our common stock could be adversely affected.

Beginning in February of 2022, President Biden and several European leaders announced various economic sanctions against Russia in connection with the conflict in the Ukraine region, which may adversely impact our business. Our business could also be adversely impacted by trade tariffs, trade embargoes or other economic sanctions that limit trading activities by the United States or other countries against countries in the Middle East, Asia or elsewhere as a result of terrorist attacks, hostilities or diplomatic or political pressures.

On March 8, 2022, President Biden issued an executive order prohibiting the import of certain Russian energy products into the United States, including crude oil, petroleum, petroleum fuels, oils, liquefied natural gas and coal. Additionally, the executive order, as amended, prohibits any new investments in Russia by U.S. persons, among other restrictions.

Furthermore, the United States has also prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum products, including trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, and customs brokering. These prohibitions took effect on December 5, 2022 with respect to the maritime transport of crude oil and February 5, 2023 with respect to the maritime transport of other petroleum products. Due to their nature, the Company’s vessels do not transport any crude oil or petroleum products. Although these sanctions do not presently apply to the maritime transport of dry bulk cargoes transported by our vessels, the expansion of such sanctions could adversely affect our business.

The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or expanded over time. Current or future counterparties of ours, including charterers, may be affiliated with persons or entities that are or may be in the future the subject of sanctions imposed by the U.S. government, the EU, and/or other international bodies. If we determine that such sanctions or embargoes require us to terminate existing or future contracts to which we, or our subsidiaries, are party or if we are found to be in violation of such applicable sanctions or embargoes, our results of operations may be adversely affected, we could face monetary fines or penalties, or we may suffer reputational harm.

All of the Company's revenues are from chartering-out its vessels on voyage or time charter contracts or from entering into pooling arrangements under which an international company and trading house involved in the use and/or transportation of drybulk commodities directs the Company's vessel to carry cargoes on its behalf. Under time charters and pooling arrangements, the Company has no contractual relationship with the owner of the cargo and does not know the identity of the cargo owner. The vessel is directed to a load port to load the cargo, and to a discharge port to offload the cargo, based solely on the instructions of the charterer. As of March 31, 2024, none of our vessels have called on ports at the aforementioned Sanctioned Jurisdictions in the past or are arranged to call on such ports in the future in violation of applicable sanctions laws. The vessels’ shipowning companies do not presently have, and have not in the past had, any agreements, arrangements or contracts with the governments of Sanctioned Jurisdictions, such as Iran, North Korea, Crimea Region of Ukraine, Syria or Cuba, or entities that these countries control.

Although we believe that we have been in compliance with applicable sanctions and embargo laws and regulations in 2023, and intend to maintain such compliance, there can be no assurance that we will be in compliance with all applicable sanctions and embargo laws and regulations 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 or territories 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 stock may adversely affect the price at which our common stock trades. 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 or territories subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries or territories, or engaging in operations associated with those countries or territories pursuant to contracts with third parties that are unrelated to those countries or territories 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 the countries or territories that we operate in.

As a result of sanctions arising from the Russian invasion of Ukraine, the ability to make payments to accounts at certain Russian banks may be limited, which could affect our ability to pay the wages of any crew members or consultants who hold such accounts.

As a result of sanctions arising from the Russian invasion of Ukraine, our ability to make payments to accounts at certain Russian banks may be limited. Currently our vessels have only a small number of Ukrainian crew members. Although wage payments have not been affected by this issue as of March 31, 2024, continuing or additional sanctions may affect our ability to pay the wages of any crew members or consultants who hold such accounts, which could adversely impact our operations.

We expect to operate substantially outside the United States, which will expose us to political and governmental instability, which could harm our operations.

We expect that our operations will be primarily conducted outside the United States and may be adversely affected by changing or adverse political and governmental conditions in the countries where our vessels are flagged or registered and in the regions where we otherwise engage in business. Any disruption caused by these factors may interfere with the operation of our vessels, which could harm our business, financial condition and results of operations. Past political efforts to disrupt shipping in these regions, particularly in the Arabian Gulf, have included attacks on ships and mining of waterways. In addition, terrorist attacks outside this region, such as the attacks that occurred against targets in the United States on September 11, 2001, and on a number of occasions in other countries following that, as well as continuing or new unrest and hostilities in Iraq, Iran, Afghanistan, Libya, Egypt, Ukraine, Syria, Gaza and elsewhere in the world, may lead to additional armed conflicts or to further acts of terrorism and civil disturbance. Any such attacks or disturbances may disrupt our business, increase vessel operating costs, including insurance costs, and adversely affect our financial condition and results of operations. Our operations may also be adversely affected by expropriation of vessels, taxes, regulation, tariffs, trade embargoes, economic sanctions or a disruption of or limit to trading activities or other adverse events or circumstances in or affecting the countries and regions where we operate or where we may operate in the future.

The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.

We are incorporated under the laws of the Republic of the Marshall Islands and we conduct operations in countries around the world. Consequently, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court's jurisdiction if any other bankruptcy court would determine it had jurisdiction.

Obligations associated with being a public company require significant company resources and management attention.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and the other rules and regulations of the SEC, including Sarbanes-Oxley. Section 404 of Sarbanes-Oxley requires that we evaluate and determine the effectiveness of our internal control over financial reporting.

We work with our legal, accounting and financial advisors to identify any areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. We evaluate areas such as corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We will make changes in any of these and other areas, including our internal control over financial reporting, which we believe are necessary. However, these and other measures we may take may not be sufficient to allow us to satisfy our obligations as a public company on a timely and reliable basis. In addition, compliance with reporting and other requirements applicable to public companies do create additional costs for us and require the time and attention of management. Our limited management resources may exacerbate the difficulties in complying with these reporting and other requirements while focusing on executing our business strategy. We may not be able to predict or estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management's attention to these matters will have on our business.

Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results.

We generate all our revenues in U.S. dollars, but we incurred approximately 19% of our vessel operating expenses and drydocking expenses, all of our vessel management fees, and approximately 4% in 2023 of our general and administrative expenses in currencies other than the U.S. dollar. This could lead to fluctuations in our operating expenses, which would affect our financial results. Expenses incurred in foreign currencies increase when the value of the U.S. dollar falls, which would reduce our profitability and cash flows.

Investment in derivative instruments such as freight forward agreements could result in losses.

From time to time, we may take positions in derivative instruments including freight forward agreements (“FFAs”). FFAs and other derivative instruments may be used to hedge a vessel owner's exposure to the charter market by providing for the sale of a contracted charter rate along a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments and do not correctly anticipate charter rate movements over the specified route and time period, we could suffer losses in the settling or termination of the FFA. This could adversely affect our results of operations and cash flows. As of December 31, 2023, the Company has entered into one interest rate swap and has three FFA agreements. See "Note 13 – Derivative Financial Instruments” under the “Consolidated Financial Statements” (beginning on page F-44).

We are exposed to volatility in SOFR, and have entered into and may selectively enter from time to time into derivative contracts, which can result in higher than market interest rates and charges against our income. Volatility in SOFR could affect our profitability, earnings and cash flow.

Our indebtedness accrues interest based on SOFR, which is volatile. The publication of U.S. Dollar LIBOR for the one-week and two-month U.S. Dollar LIBOR tenors ceased on December 31, 2021, and the ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, ceased all other U.S. Dollar LIBOR tenors on June 30, 2023. The United States Federal Reserve concurrently issued a statement advising banks to cease issuing U.S. Dollar LIBOR instruments after 2021. As such, any new debt agreements we entered into did not use LIBOR as an interest rate, and we transitioned our existing loan agreements from U.S. Dollar LIBOR to an alternative reference rate prior to June 2023. In response to the anticipated discontinuation of LIBOR, the Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, selected an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.” SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. treasury repo market. SOFR is now the predominant interest rate being used across cash and derivatives markets and the one we have used following the transition away from LIBOR. The impact of such a transition from LIBOR to SOFR was not significant for us. In light of the transition we added fallback language to existing debt tied to LIBOR and in some cases agreed to pricing adjustments in our credit agreements. In particular, in certain cases the fallback language provided for the implementation of the so called “hardwire approach” where even the pricing adjustment (the Credit Adjustment Spread or “CAS”) was agreed to in advance, and in other cases the fallback language provided for a negotiation framework and timing in advance of the expected transition. All our loan agreements that previously accrued under LIBOR have been amended accordingly. As of December 31, 2023, our obligations under our credit facilities which accrue interest based on SOFR amounted to $104.8 million.

In order to manage our exposure to interest rate fluctuations, we use and may in the future use additional interest rate derivatives to effectively fix some of our floating rate debt obligations. No assurance can however be given that the use of these derivative instruments may effectively protect us from adverse interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash position. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. Such risk may have an adverse effect on our financial condition and results of operations.

We depend upon a few significant customers, due to our currently small fleet, for a large part of our revenues and the loss of one or more of these customers could adversely affect our financial performance.

We have historically derived a significant part of our revenues from a small number of charterers. During 2023, approximately 52% of our revenues were derived from our top five charterers. During 2022 and 2021, approximately 60% and 77% of our revenues were derived from our top five charterers, respectively. If one or more of our charterers chooses not to charter our vessels or is unable to perform under one or more charters with us and we are not able to find a replacement charter, we could suffer a loss of revenues that could adversely affect our financial condition and results of operations.

United States tax authorities could treat us as a "passive foreign investment company," which could have adverse United States federal income tax consequences to United States holders.

A foreign corporation will be treated as a "passive foreign investment company," or PFIC, for United States 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, and 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." United States shareholders of a PFIC are subject to a disadvantageous United States 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. In addition, United States shareholders of a PFIC are required to file annual information returns with the United States Internal Revenue Service, or IRS.

Based on our current method of operation, we do not believe that we have been, are or will be a PFIC with respect to any taxable year. In this regard, we 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 our income from our time chartering activities should not constitute "passive income," and the assets that we own and operate in connection with the production of that income should not constitute passive assets.

There is substantial legal authority supporting this position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of legal authority directly relating to PFIC rules, no assurance can be given that the IRS or a court of law will accept this 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 the nature and extent of our operations changed.

If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders will face adverse United States federal income tax consequences. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986, as amended, (which election could itself have adverse consequences for such shareholders, as discussed in Item 10 of this Annual Report under "Taxation — United States Federal Income Taxation of U.S. Holders"), such shareholders would be subject to United States federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our shares, as if the excess distribution or gain had been recognized ratably over the United States shareholder's holding period of our shares. See "Taxation — United States Federal Income Taxation of U.S. Holders" in this Annual Report under Item 10 for a more comprehensive discussion of the United States federal income tax consequences to United States shareholders if we are treated as a PFIC.

Based on the current and expected composition of our and our subsidiaries' assets and income, it is not anticipated that we will be treated as a PFIC. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no assurances regarding our status as a PFIC for the current taxable year or any future taxable year. See the discussion in the section entitled "Item 10.E. Taxation — Passive Foreign Investment Company Status and Significant Tax Consequences". We urge U.S. Holders to consult with their own tax advisors regarding the possible application of the PFIC rules.

Changes in tax laws and unanticipated tax liabilities could materially and adversely affect the taxes we pay, results of operations and financial results.

We are subject to income and other taxes in the United States and foreign jurisdictions, and our results of operations and financial results may be affected by tax and other initiatives around the world. For instance, there is a high level of uncertainty in today’s tax environment stemming from global initiatives put forth by the Organisation for Economic Co-operation and Development’s (“OECD”) two-pillar base erosion and profit shifting project. In October 2021, members of the OECD put forth two proposals: (i) Pillar One reallocates profit to the market jurisdictions where sales arise versus physical presence; and (ii) Pillar Two compels multinational corporations with €750 million or more in annual revenue to pay a global minimum tax of 15% on income received in each country in which they operate. The reforms aim to level the playing field between countries by discouraging them from reducing their corporate income taxes to attract foreign business investment. Over 140 countries agreed to enact the two-pillar solution to address the challenges arising from the digitalization of the economy and, in 2024, these guidelines were declared effective and must now be enacted by those OECD member countries. It is possible that these guidelines, including the global minimum corporate tax rate measure of 15%, could increase the burden and costs of our tax compliance, the amount of taxes we incur in those jurisdictions and our global effective tax rate, which could have a material adverse impact on our results of operations and financial results.

As a Marshall Islands corporation and with some of our subsidiaries being Marshall Islands entities and also having subsidiaries in other offshore jurisdictions, our operations may be subject to economic substance requirements, which could impact our business.

We are a Marshall Islands corporation and some of our subsidiaries are Marshall Islands entities. The Marshall Islands has enacted economic substance laws and regulations with which we may be obligated to comply. We believe that we and our subsidiaries are compliant with the Marshall Islands economic substance requirements. However, if there were a change in the requirements or interpretation thereof, or if there were an unexpected change to our operations, any such change could result in noncompliance with the economic substance legislation and related fines or other penalties, increased monitoring and audits, and dissolution of the non-compliant entity, which could have an adverse effect on our business, financial condition or operating results.

EU Finance ministers rate jurisdictions for tax rates and tax transparency, governance and real economic activity. Countries that are viewed by such finance ministers as not adequately cooperating, including by not implementing sufficient standards in respect of the foregoing, may be put on a “grey list” or a “blacklist”. Effective October 23, 2023 the Marshall Islands has been designated as a cooperating jurisdiction for tax purposes. If the Marshall Islands is added to the list of non-cooperative jurisdictions in the future and sanctions or other financial, tax or regulatory measures were applied by European Member States to countries on the list or further economic substance requirements were imposed by the Marshall Islands, our business could be harmed.

We may have to pay tax on United States source income, which would reduce our earnings.

Under the United States Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as us and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States may be subject to a 4% United States federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code, or Section 883, and the applicable Treasury Regulations promulgated thereunder.

We intend to take the position that we qualified for this statutory tax exemption for United States federal income tax return reporting purposes for our 2023 taxable year and we intend to so qualify for future taxable years. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption for any future taxable year and thereby become subject to United States federal income tax on our U.S.-source shipping income. For example, in certain circumstances we may no longer qualify for exemption under Section 883 for a particular taxable year if shareholders, other than “qualified shareholders”, with a five percent 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, there can be no assurances on our tax-exempt status. In addition, we may fail to qualify if our common stock comes to represent 50% or less of the value or outstanding voting power of our stock.

If we are not entitled to exemption under Section 883 for any taxable year, we would be subject for those years to an effective 2% United States federal income tax on the shipping income we derive during the year which is attributable to the transport of cargoes to or from the United States. The imposition of this taxation would have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders.

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 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. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977. 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.

If management is unable to provide reports as to the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock.

Under Section 404 of Sarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F a report containing our management’s assessment of the effectiveness of our internal control over financial reporting. If, in such annual reports on Form 20-F, our management cannot provide a report as to the effectiveness of our internal control over financial reporting as required by Section 404, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock.

It may be difficult to enforce service of process and enforcement of judgments against us and our officers and directors.

We are a Marshall Islands corporation, and our subsidiaries are incorporated in jurisdictions outside of the United States. Our executive offices are located outside of the United States in Maroussi, Greece. A majority of our directors and officers reside outside of the United States, and a substantial portion of our assets and the assets of our officers and directors are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside of the United States, judgments you may obtain in the U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.

There is also substantial doubt that the courts of the Marshall Islands, Greece or jurisdictions in which our subsidiaries are organized would enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws. In addition, the protection afforded to minority shareholders in the Marshall Islands is different than those offered in the United States.

Risk Factors Relating To Our Common Stock

The trading volume for our common stock has been low, which may cause our common stock to trade at lower prices and make it difficult for you to sell your common stock.

Although our shares of common stock have traded on the Nasdaq Capital Market since May 31, 2018, the trading volume has been low. Our shares may not actively trade in the public market and any such limited liquidity may cause our common stock to trade at lower prices and make it difficult to sell your common stock.

The market price of our common stock has recently been volatile and may continue to be volatile in the future, and as a result, investors in our common stock could incur substantial losses on any investment in our common stock.

The market price of our common stock has recently been volatile and may continue to be volatile in the future. For example, the reported closing sale price of our common stock on the Nasdaq Capital Market was $17.96 per share on March 9, 2023, $13.65 per share on June 13, 2023 and $20.0 per share on December 1, 2023. In addition, on December 5, 2023, the intra-day sale price of our common stock reported on the Nasdaq Capital Market fluctuated between a low of $18.07 per share and a high of $19.67 per share without any discernable announcements or developments by the Company or third parties to substantiate the movement of our stock price.

Among the factors that have in the past and could in the future affect our stock price are:

●	actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
●	changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
●	changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
●	speculation in the press or investment community about our business or the shipping industry;
●	changes in market valuations of similar companies and stock market price and volume fluctuations generally;
●	payment of dividends;
●	strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
●	changes in government and other regulatory developments;
●	additions or departures of key personnel;
●	general market conditions and the state of the securities markets; and
●	domestic and international economic, market and currency factors unrelated to our performance.

The international drybulk shipping industry has been highly unpredictable. In addition, the stock markets in general, and the markets for drybulk shipping and shipping stocks in general, have experienced extreme volatility that has sometimes been unrelated or disproportionate to the operating performance of particular companies. In addition, the COVID-19 pandemic and geopolitical tensions have caused broad stock market and industry fluctuations. These broad market fluctuations may adversely affect the trading price of our common stock. As a result of this volatility, our shares may trade at prices lower than you originally paid for such shares and you may incur substantial losses on your investment in our common stock.

Investors may purchase our common stock to hedge existing exposure or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent an aggregate short exposure in our common stock becomes significant, investors with short exposure may have to pay a premium to purchase common stock for delivery to common stock lenders at times if and when the price of our common stock increases significantly, particularly over a short period of time. Those purchases may in turn, dramatically increase the price of our common stock. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to our business prospects, operating performance, financial condition or other traditional measures of value for the Company or our common stock.

If our common stock does not meet the Nasdaq Capital Market’s minimum share price requirement, and if we cannot cure such deficiency within the prescribed timeframe, our common stock could be delisted.

Under the rules of the Nasdaq Capital Market, listed companies are required to maintain a share price of at least $1.00 per share. If the share price declines below $1.00 for a period of 30 consecutive business days, then the listed company has a cure period of at least 180 days to regain compliance with the $1.00 per share minimum. The company may regain compliance if the bid price of its common shares closes at $1.00 per share or more for a minimum of ten consecutive business days at any time during the 180-day cure period. If the price of our common stock closes below $1.00 for 30 consecutive days, and if we cannot cure that deficiency within the 180-day timeframe, then our common stock could be delisted.

If the market price of our common stock falls below $5.00 per share, under stock exchange rules, our shareholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to continue to use our common stock as collateral may lead to sales of such shares creating downward pressure on and increased volatility in the market price of our common stock.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common shares will depend, in part, upon the research and reports that securities or industry analysts publish about us or our business. We do not have any control over analysts as to whether they will cover us, and if they do, whether such coverage will continue. If analysts do not commence coverage of the Company, or if one or more of these analysts cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. In addition, if one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price may likely decline.

Our Amended and Restated Articles of Incorporation, Bylaws and Shareholders' Rights Plan contain anti-takeover provisions that may discourage, delay or prevent (1) our merger or acquisition and/or (2) the removal of incumbent directors and officers and (3) the ability of public shareholders to benefit from a change in control.

Our current amended and restated articles of incorporation and bylaws contain certain anti-takeover provisions. These provisions include blank check preferred stock, the prohibition of cumulative voting in the election of directors, a classified Board of Directors, advance written notice for shareholder nominations for directors, removal of directors only for cause, advance written notice of shareholder proposals for the removal of directors and limitations on action by shareholders. In addition, we adopted a shareholders' 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. These anti-takeover provisions, including provisions of our shareholders' rights plan, either individually or in the aggregate, may discourage, delay or prevent (1) our merger or acquisition by means of a tender offer, a proxy contest or otherwise, that a shareholder may consider in its best interest, (2) the removal of incumbent directors and officers, and (3) the ability of public shareholders to benefit from a change in control. These anti-takeover provisions could substantially impede the ability of shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and shareholders’ ability to realize any potential change of control premium.

Future sales of our common stock could cause the market price of our common stock to decline.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales could occur, may depress the market price for our common stock. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.

We may issue additional shares of our stock in the future and our stockholders may elect to sell large numbers of shares held by them from time to time. Our amended and restated articles of incorporation authorize us to issue up to 200,000,000 shares of common stock and 20,000,000 shares of preferred stock.

Sales of a substantial number of any of the shares of common stock mentioned above may cause the market price of our common stock to decline.

On October 10, 2023, the Company filed a prospectus supplement with the SEC and Company signed an equity distribution agreement with Alliance Global Partners (A.G.P.) in connection with the Company’s at-the-market offering program. Under this agreement the Company proposes to issue and sell through A.G.P. (as a sales agent) common shares, par value $0.01 per share, of the Company having an aggregate offering price up to $6,680,000. The shares consist entirely of authorized but unissued common shares to be issued and sold by the Company.

Issuance of preferred stock may adversely affect the voting power of our shareholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.

Our Board of Directors approved the issuance of 19,042 shares of our Series B Preferred Shares at the Spin-off date and may decide in the future to issue preferred shares in one or more series and to determine the rights, preferences, privileges and restrictions with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any series subject to prior shareholders' approval. If our Board determines to issue preferred shares, such issuance may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. The issuance of preferred shares with voting and conversion rights may also adversely affect the voting power of the holders of common shares. This 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 stock and shareholders’ ability to realize any potential change of control premium. As of December 31, 2023 we have no outstanding Series B Preferred Shares.

Because the Republic of the Marshall Islands, where we are incorporated, does not have a well-developed body of corporate law, shareholders may have fewer rights and protections than under typical state law in the United States, such as Delaware, and shareholders may have difficulty in protecting their interests with regard to actions taken by our Board of Directors.

Our corporate affairs are governed by our amended and restated articles of incorporation and bylaws, as amended, 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 Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Stockholder rights may differ as well. For example, under Marshall Islands law, a copy of the notice of any meeting of the shareholders must be given not less than 15 days before the meeting, whereas in Delaware such notice must be given not less than 10 days before the meeting. Therefore, if immediate shareholder action is required, a meeting may not be able to be convened as quickly as it can be convened under Delaware law. Also, under Marshall Islands law, any action required to be taken by a meeting of shareholders may only be taken without a meeting if consent is in writing and is signed by all of the shareholders entitled to vote, whereas under Delaware law action may be taken by consent if approved by the number of shareholders that would be required to approve such action at a meeting. Therefore, under Marshall Islands law, it may be more difficult for a company to take certain actions without a meeting even if a majority of the shareholders approve of such action. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of Delaware and other states with substantially similar legislative provisions, public shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.

Item 4.	Information on the Company
A.	History and Development of the Company
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EuroDry Ltd. is a Marshall Islands company incorporated under the BCA on January 8, 2018. We are a provider of worldwide ocean-going transportation services. We own and operate drybulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers. As of March 31, 2024, our fleet consisted of 13 drybulk carriers (comprising five Panamax drybulk carriers, two Kamsarmax, five Ultramax drybulk carriers and one Supramax drybulk carrier), all of which are in operation. The total cargo carrying capacity of our 13 drybulk carriers is 918,502 dwt.

On May 30, 2018, EuroDry was spun-off from our Former Parent Company and issued 2,254,830 shares of its common stock to holders of common stock of Euroseas as of the applicable record date (one share of EuroDry for every five shares of Euroseas held). Our common shares trade under the symbol EDRY on the Nasdaq Capital Market. Our executive offices are located at 4 Messogiou & Evropis Street, 151 24, Maroussi, Greece. Our telephone number is +30-211-1804005.

The SEC maintains an Internet site at www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our website address is www.eurodry.gr. The information contained on our website is not part of this annual report.

B.	Business Overview

Our fleet consists of drybulk carriers that transport iron ore, coal, grain and other dry cargoes along worldwide shipping routes. Please see information in the section "Our Fleet", below. During 2021, 2022 and 2023, we had a fleet utilization of 99.5%, 99.1% and 97.9% respectively, and an average number of vessels of 7.9, 10.4 and 10.6 respectively, our vessels achieved daily time charter equivalent rates of $24,222, $21,304 and $12,528 respectively, and we generated time and voyage charter revenues of $68.51 million, $74.57 million and $50.43 million respectively.

Our business strategy is focused on providing consistent shareholder returns by carefully selecting the timing and the structure of our investments in drybulk vessels and by reliably, safely and competitively operating the vessels we own, through our affiliates, Eurobulk and Eurobulk FE. Representing a continuous shipowning and management history that dates back to the 19th century, we believe that one of our advantages in the industry is our ability to select and safely operate drybulk vessels of any age.

Our Fleet

Currently, the profile and deployment of our fleet are the following:

Name	Type	Dwt	Year Built	Employment (*)	TCE Rate ($/day)
Drybulk Vessels
EKATERINI	Kamsarmax	82,000	2018	TC until Mar-25	Hire 105.5% of the Average Baltic Kamsarmax P5TC (**) index
XENIA	Kamsarmax	82,000	2016	TC until May-24	$15,000
ALEXANDROS P	Ultramax	63,500	2017	TC until Apr-24	$16,500
CHRISTOS K***	Ultramax	63,197	2015	TC until May-24	On Ballast voyage. $22,000 plus Gross Ballast Bonus of $220,000
YANNIS PITTAS	Ultramax	63,177	2014	TC until May-24	$13,000
MARIA***	Ultramax	63,153	2015	TC until May-24	On Ballast voyage. $22,000 plus Gross Ballast Bonus of $220,000
GOOD HEART	Ultramax	62,996	2014	TC until May-24	$9,500 for the first 68 days then $14,500
MOLYVOS LUCK	Supramax	57,924	2014	TC until May-24	$15,750
EIRINI P	Panamax	76,466	2004	TC until Jun-24	$13,250
STARLIGHT	Panamax	75,845	2004	In Dry-docking passing a special survey	-
TASOS	Panamax	75,100	2000	TC until Apr-24	$12,500
SANTA CRUZ	Panamax	76,440	2005	TC until Jun-24	On Ballast voyage. $17,750 plus Gross Ballast Bonus of $775,000
BLESSED LUCK	Panamax	76,704	2004	TC until Apr-24	$14,300
Total Vessels	13	918,502
(*)	TC denotes time charter. Charter duration indicates the earliest redelivery date.
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(**)	The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.
(***)	The entity owning the vessel is 61% owned by EuroDry and 39% by NRP Project Finance AS (“NRP Investors”).

We plan to expand our fleet by investing in vessels in the drybulk market under favorable market conditions. We also intend to take advantage of the cyclical nature of the market by buying and selling ships when we believe favorable opportunities exist. We employ our vessels in the spot and time charter market and through pool arrangements. As of April 15, 2024, twelve of our vessels are employed under time charter contracts and one is in dry-docking passing her special survey.

As of April 15, 2024, approximately 16.0% of our ship capacity days for the remainder of 2024 are under contract.

In “Critical Accounting Estimates – Impairment of vessels” below, we discuss our policy for impairing the carrying values of our vessels. During the past few years, the market values of vessels have experienced extraordinarily high volatility, and 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. We may not impair those vessels’ carrying value under our impairment accounting 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, 2022 and 2023, respectively, (ii) which of our vessels we believe has a basic market value below its carrying value, and (iii) the aggregate difference between carrying 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, using industry-standard valuation methodologies, in cash, in arm’s-length transactions. For purposes of this calculation, we have assumed that the vessels would be sold at a price that reflects our estimate of their basic market values as of the respective year end. However, we are not holding our vessels for sale, except as otherwise noted in this report.

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 any notations. 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.

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.

Name	Capacity	Purchase Date	Carrying Value as of December 31, 2022	Carrying Value as of December 31, 2023
Drybulk Vessels	(dwt)		(million USD)	(million USD)
EIRINI P	76,466	May-2014	$10.90(1)	$9.64(2)
XENIA	82,000	Feb-2016	$24.06	$22.93
TASOS	75,100	Jan-2017	$3.74	$3.23
ALEXANDROS P.	63,500	Jan-2017	$14.30	$13.71
EKATERINI	82,000	May-2018	$20.07	$19.25
STARLIGHT	75,845	Nov-2018	$7.61	$6.80
BLESSED LUCK	76,704	May-2021	$10.26	$9.07
GOOD HEART	62,996	Sep-2021	$23.15(1)	$21.95
MOLYVOS LUCK	57,924	Feb-2022	$20.28(1)	$19.19(2)
SANTA CRUZ	76,440	Apr-2022	$14.65(1)	$13.08(2)
YANNIS PITTAS	63,177	Oct-2023	-	$20.89
CHRISTOS K	63,197	Oct-2023	-	$21.87
MARIA	63,153	Nov-2023	-	$21.92
Total Drybulk Vessels	918,502		$149.02	$203.53

(1) Indicates drybulk vessels for which we believe, as of December 31, 2022, the basic charter-free market value is lower than the vessel’s carrying value as of December 31, 2022. We believe that the aggregate carrying value of these vessels, assessed separately, of $68.98 million as of December 31, 2022 exceeds their aggregate basic charter-free market value of approximately $63.20 million by approximately $5.78 million. As further discussed in “Critical Accounting Estimates – Impairment of vessels” below, we believe that the carrying values of our vessels as of December 31, 2022 were recoverable.

(2) Indicates drybulk vessels for which we believe, as of December 31, 2023, the basic charter-free market value is lower than the vessel’s carrying value as of December 31, 2023. We believe that the aggregate carrying value of these vessels, assessed separately, of $41.91 million as of December 31, 2023 exceeds their aggregate basic charter-free market value of approximately $38.00 million by approximately $3.91 million. As further discussed in “Critical Accounting Estimates – Impairment of vessels” below, we believe that the carrying values of our vessels as of December 31, 2023 were recoverable.

We note that all but one of our drybulk vessels are currently employed under time charter contracts of durations from less than one to eleven months until the earliest redelivery charter period (one is completing her dry-dock). 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 the risk factor entitled “The market value of our vessels can fluctuate significantly, **** which may adversely affect our financial condition, cause us to breach financial covenants, result in the incurrence of a loss upon disposal of a vessel or increase the cost of acquiring additional vessels” and the discussion in Item 3.D under “Industry Risk Factors”.

Our Competitive Strengths

We believe that we possess the following competitive strengths:

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Experienced Management Team. Our management team has significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts Institute of Technology and has over 30 years of experience, primarily as a partner at a Boston based international consulting firm focusing on investment and risk management in the maritime industry.

●	Cost Efficient Vessel Operations. We believe that because of the efficiencies afforded to us through our Managers, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $7,132 per day for the year ended December 31, 2023. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and on board crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2023, our operational fleet utilization was 98.5%, from 99.3% in 2022, while our commercial utilization rate was 99.4% and 99.8% for each year, respectively. Our total fleet utilization rate in 2023 was 97.9%, from 99.1% in 2022.
●	Strong Relationships with Customers and Financial Institutions. We believe ourselves, Eurobulk, Eurobulk FE and the Pittas family have developed strong industry relationships and have gained acceptance with charterers, lenders and insurers because of long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk and Eurobulk FE, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk, Eurobulk FE and the Pittas family help us to secure favorable employment for our vessels with well-known charterers.
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Cost Efficient Vessel Operations. We believe that because of the efficiencies afforded to us through our Managers, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $7,132 per day for the year ended December 31, 2023. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and on board crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2023, our operational fleet utilization was 98.5%, from 99.3% in 2022, while our commercial utilization rate was 99.4% and 99.8% for each year, respectively. Our total fleet utilization rate in 2023 was 97.9%, from 99.1% in 2022.

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Strong Relationships with Customers and Financial Institutions. We believe ourselves, Eurobulk, Eurobulk FE and the Pittas family have developed strong industry relationships and have gained acceptance with charterers, lenders and insurers because of long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk and Eurobulk FE, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk, Eurobulk FE and the Pittas family help us to secure favorable employment for our vessels with well-known charterers.

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Our Business Strategy

Our business strategy is focused on providing consistent shareholder returns by carefully timing and structuring acquisitions of drybulk carriers and by reliably, safely and competitively operating our vessels through our Managers. We continuously evaluate purchase and sale opportunities, as well as long term employment opportunities for our vessels. Key elements of the above strategy are:

●	Renew and Expand our Fleet. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market opportunities present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each investment option at the time it is made. In May 2021 we acquired a Panamax drybulk vessel, followed by an Ultramax drybulk vessel in September 2021. In February 2022, we purchased a Supramax drybulk carrier, followed by another Panamax drybulk vessel in April 2022. In October and November 2023, we took delivery of three Ultramax drybulk carriers.
●	Maintain Balanced Employment. We intend to employ our fleet on either longer term time charters, i.e. charters with duration of more than a year, or shorter term time/spot charters. We seek longer term time charter employment to obtain adequate cash flow to cover as much as possible of our fleet’s recurring costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. We also may use FFAs – as a substitute for time charter employment – to partly provide coverage for our drybulk vessels in order to increase the predictability of our revenues. We look to deploy the remainder of our fleet on spot charters, shipping pools or contracts of affreightment (“COA”) depending on our view of the direction of the markets and other tactical or strategic considerations. When we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the future), while when we expect the market to weaken we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 15, 2024, on the basis of our existing time charters, approximately 16.0% of our vessel capacity for the remainder of 2024 are under time charter contracts, which will ensure employment of a portion of our fleet and will partly protect us from market fluctuations and increase our ability to make principal and interest payments on our debt and pay dividends to our shareholders.
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Renew and Expand our Fleet. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market opportunities present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each investment option at the time it is made. In May 2021 we acquired a Panamax drybulk vessel, followed by an Ultramax drybulk vessel in September 2021. In February 2022, we purchased a Supramax drybulk carrier, followed by another Panamax drybulk vessel in April 2022. In October and November 2023, we took delivery of three Ultramax drybulk carriers.

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Maintain Balanced Employment. We intend to employ our fleet on either longer term time charters, i.e. charters with duration of more than a year, or shorter term time/spot charters. We seek longer term time charter employment to obtain adequate cash flow to cover as much as possible of our fleet’s recurring costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. We also may use FFAs – as a substitute for time charter employment – to partly provide coverage for our drybulk vessels in order to increase the predictability of our revenues. We look to deploy the remainder of our fleet on spot charters, shipping pools or contracts of affreightment (“COA”) depending on our view of the direction of the markets and other tactical or strategic considerations. When we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the future), while when we expect the market to weaken we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 15, 2024, on the basis of our existing time charters, approximately 16.0% of our vessel capacity for the remainder of 2024 are under time charter contracts, which will ensure employment of a portion of our fleet and will partly protect us from market fluctuations and increase our ability to make principal and interest payments on our debt and pay dividends to our shareholders.

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●	Optimize Use of Financial Leverage. We intend to use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2023 called for a reduction of approximately 17.22% of our debt by the end of 2024 and an additional reduction of about 9.20% by the end of 2025 for a total of 26.42% reduction over the next two years, excluding any new debt that we assumed or may assume. As our debt is being repaid we expect that our ability to raise or borrow additional funds more cheaply in order to grow our fleet and generate better returns for our shareholders will increase.
●	Environmental, Social and Governance (ESG) Practices: We actively manage a broad range of ESG initiatives, taking into consideration their expected impact on the sustainability of our business over time, and the potential impact of our business on society and the environment. Regarding environmental initiatives, in 2021, 2022 and 2023 we implemented technical and operational measures that we expect will result in energy savings and a reduced carbon footprint for our vessels. Moreover, we pay considerable attention to our human resources both on our vessels and ashore, proven by a variety of practices, including worldwide training on safety and management systems, and medical insurance for all employees.
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Optimize Use of Financial Leverage. We intend to use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2023 called for a reduction of approximately 17.22% of our debt by the end of 2024 and an additional reduction of about 9.20% by the end of 2025 for a total of 26.42% reduction over the next two years, excluding any new debt that we assumed or may assume. As our debt is being repaid we expect that our ability to raise or borrow additional funds more cheaply in order to grow our fleet and generate better returns for our shareholders will increase.

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Environmental, Social and Governance (ESG) Practices: We actively manage a broad range of ESG initiatives, taking into consideration their expected impact on the sustainability of our business over time, and the potential impact of our business on society and the environment. Regarding environmental initiatives, in 2021, 2022 and 2023 we implemented technical and operational measures that we expect will result in energy savings and a reduced carbon footprint for our vessels. Moreover, we pay considerable attention to our human resources both on our vessels and ashore, proven by a variety of practices, including worldwide training on safety and management systems, and medical insurance for all employees.

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Our Customers

We have well-established relationships with major dry bulk charterers, which we serve by carrying a variety of cargoes over a multitude of routes around the globe. Our major charterer customers during the last three years include Quadra, Tongli, Ultrabulk, Amaggi and OLAM amongst others. We are a relationship driven company, and our top five customers in 2023 include two of our top five customers from 2022 and 2021 (Amaggi and Tongli). Our top five customers accounted for approximately 52% of our revenues in 2023, 60% in 2022 and 77% in 2021. In 2023, Amaggi and Tongli accounted for 17% and 16% of our revenues, respectively. In 2022, OLAM, Quadra, Tongli, Ultrabulk and Amaggi accounted for 13%, 13%, 12%, 11% and 11% of our revenues, respectively. In 2021, Quadra, Ultrabulk, Amaggi and Tongli accounted for 27%, 19%, 15% and 11% of our revenues, respectively. Our dependence on our key charterer customers is moderate as in the event of a charterer default, our vessels can generally be re-chartered at the market rate, in the spot or charter market, although such a rate could be lower than the charter rate agreed with the charterer. In addition, as of the date of this report, none of our charterers have reported any inability to pay their obligations to us as a result of the COVID-19 outbreak or as a result of ongoing conflicts such as the war in Ukraine, the war in Palestine and current events in the Red Sea region.

The Dry Cargo Industry

Dry cargo shipping refers to the transport of certain commodities by sea between various ports in bulk or containerized form.

Drybulk commodities are typically divided into two categories — major and minor bulks. Major bulks include coal, iron ore and grains, while minor bulks include aluminum, phosphate rock, fertilizer, raw materials, agricultural and mineral cargo, cement, forest products and some steel products, including scrap.

There are five main classes of drybulk carriers — Handysize, Handymax, Panamax, Kamsarmax and Capesize. These classes represent the sizes of the vessel carrying the cargo in terms of deadweight (dwt) capacity, which is defined as the total weight including cargo that the vessel can carry when loaded to a defined load line of the vessel. Handysize vessels are the smallest of the five categories and include those vessels weighing up to 40,000 dwt. Handymax carriers are those vessels that weigh between 40,000 dwt and 60,000 dwt, while Panamax vessels are those ranging from 60,000 dwt to 80,000 dwt. Vessels over 80,000 dwt are called Kamsarmax vessels, while vessels over 100,000 dwt are called Capesize vessels (mini-Capes 100-140,000 dwt).

Drybulk carriers are ordinarily chartered either through a voyage charter or a time charter, under a longer term COA or in pools. Under a voyage charter, the owner agrees to provide a vessel for the transport of cargo between specific ports in return for the payment of an agreed freight rate per ton of cargo or an agreed dollar lump sum amount. Voyage costs, such as canal and port charges and bunker expenses, are the responsibility of the owner. Under a time charter, the ship owner places the vessel at the disposal of a charterer for a given period of time in return for a specified rate (hire per day) with the voyage costs being the responsibility of the charterer. In both voyage charters and time charters, operating costs (such as repairs and maintenance, crew wages and insurance premiums), as well as drydockings and special surveys, are the responsibility of the ship owner. The duration of time charters varies, depending on the evaluation of market trends by the ship owner and by charterers. Occasionally, drybulk vessels are chartered on a bareboat basis. Under a bareboat charter, operations of the vessels and all operating costs are the responsibility of the charterer, while the owner only pays the financing costs of the vessel.

A COA is another type of charter relationship where a charterer and a ship owner enter into a written agreement pursuant to which a specific cargo will be carried over a specified period of time. COAs benefit charterers by providing them with fixed transport costs for a commodity over an identified period of time. COAs benefit ship owners by offering ascertainable revenue over that same period of time and eliminating the uncertainty that would otherwise be caused by the volatility of the charter market. A shipping pool is a collection of similar vessel types under various ownerships, placed under the care of a single commercial manager. The manager markets the vessels as a single fleet and collects the earnings which are distributed to individual owners under a pre-arranged weighing system by which each participating vessel receives its share. Pools have the size and scope to combine voyage charters, time charters and COAs with freight forward agreements for hedging purposes, to perform more efficient vessel scheduling thereby increasing fleet utilization.

The international drybulk shipping industry is cyclical and volatile, having reached historical highs in 2008 and historical lows in 2016. Charter rates improved in 2017, however, they remained below profitable levels for most of the year. In 2018 the charter rates improved significantly before turning back to the 2017 levels at the beginning of 2019. Gradually during the year, the BDI turned to a six-year high, and peaked at the beginning of September 2019. However, by the end of the year, the BDI returned to 2017 levels and continued to decline even further in early 2020. Pressure on bulker demand was notable even before the impact of the COVID-19 pandemic, as iron ore exports were running low in certain areas of the world, and coal and minor bulk trade were under pressure, partially caused by the COVID-19 pandemic, among other factors. Fuel prices for vessels that had not undergone scrubber retrofitting also increased due to the implementation of the IMO 2020 regulation. Despite the turbulence in drybulk trade due to the COVID-19 pandemic in the first half of 2020, there were some improvements in the second half of the year. By November 2020, the market strength eased off but starting in December of 2020, and continuing in 2021, it strengthened again reaching its highest levels since 2010 by the end of March 2021, and skyrocketing to 5,647 points in October 2021 before dropping to 2,217 points by the end of the year due to higher energy prices and reduced demand for iron ore from China. In 2022, charter rates for dry bulk vessels decreased from 2021 levels but were sustained well above the historical average. The BDI softened from the decade highs of 2021, but averaged 43% above the decade average, principally as a result of strong global growth and increased infrastructure spending which has led to an elevated demand for commodities combined with a historically low orderbook, along with port delays and congestion. In 2022, the BDI index ranged from a high of 3,369 in May 2022 to 965 points in August 2022, closing the year at around 1,515 points. In 2023, the BDI index ranged from a low of 658 points in February 2023 to about 1,400 between March and May 2023, and rising again to an average of 2,538 points in December 2023 primarily due to events in the Red Sea and Panama Canal restrictions, resulting in longer alternative routes to avoid the areas. The development of charter rates is dependent on the supply of and demand for drybulk vessels. Demand for vessels depends on the international trade of drybulk commodities which, in turn, is affected by the economic growth, infrastructure investment and industrial production of major importing regions like Europe and Far East amongst others as well as the production of drybulk commodities by exporters like Brazil, Australia, South Africa, Argentina and Russia amongst others. During 2017, global seaborne drybulk trade growth measured in tonne-miles, reached 5.6% according to industry analysts, the highest annual growth since 2014, however, trade growth in 2018 decreased to 2.4% and further decreased to 0.1% in 2019. The significant effects of the COVID-19 pandemic reflected negatively on drybulk seaborne trade growth, which shrunk to 1.2% in 2020, but grew to 3.4% in 2021 as a result of a post-Covid rebound. In 2022, drybulk seaborne trade shrunk to -1.1%, but grew to 4.4% in 2023 and is forecast to grow a further 1.6% in each of 2024 and 2025.

At the same time, the supply of drybulk vessels cannot be changed drastically in the short term as it takes about nine months to build a ship and, usually, there is a lag of, at least, fifteen to eighteen months between placing an order to build a vessel and its delivery. In the near term, supply is limited by the existing number of vessels and can only be adjusted by increasing or decreasing the operating speed of a vessel but various economic and operational factors could limit the range of such adjustments. As of March 31, 2024, the backlog of vessels under construction ("orderbook") is about 8.52% of the fleet and it is scheduled to be delivered mostly over the next year. This level of orderbook reflects lower newbuilding orders placed between 2018 and 2019 due to the depressed charter rates in those years, and will limit supply growth during 2024 and 2025. The orderbook is fairly balanced across all sizes. The low level of orderbook indicates that growth of the fleet is limited, thus, providing a foundation for higher charter rates at positive levels. Additionally, new environmental regulations that came into effect at the beginning of 2023 could further influence supply growth.

Typically, periods of high charter rates result in an increased rate of new vessel ordering, often more than what the demand levels warrant; these vessels begin to be delivered eighteen months or later when demand growth for vessels often slows down creating oversupply and quick correction of charter rates. The cyclicality of charter rates is also reflected in vessel values.

Our Competitors

We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and vessel condition, as well as on reputation. Eurobulk arranges our charters (whether spot charters, time charters or shipping pools) through Eurochart S.A. (“Eurochart”), an affiliated brokering company which negotiates the terms of the charters based on market conditions. We compete primarily with other shipowners of carriers in the drybulk sector. Ownership of drybulk carriers is highly fragmented and is divided among state controlled and independent shipowners. Some of our publicly listed competitors include Diana Shipping Inc. (NYSE: DSX), Genco Shipping and Trading Limited (NYSE: GNK), Navios Maritime Partners Inc. (NYSE: NMM), Star Bulk Carriers Corp. (NASDAQ: SBLK), Safe Bulkers, Inc. (NYSE: SB) and Globus Maritime Limited (NASDAQ: GLBS).

Seasonality

Coal, iron ore and grains trades, the major commodities of the drybulk shipping industry, are somewhat seasonal in nature. Energy markets primarily affect the demand for coal, higher demand is witnessed mainly during summer periods when air conditioning and refrigeration require more electricity and towards the end of the calendar year in anticipation of the forthcoming winter period. Demand for iron ore tends to decline in the summer months because many of the major steel users, such as automobile makers, significantly reduce their level of production. Grains are completely seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers (the United States, Canada and the European Union) are located in the northern hemisphere and the other two (Argentina and Australia) in the southern one, harvests occur throughout the year and are shipped accordingly.

Environmental and Other Regulations in the Shipping Industry

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

A variety of government 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 USCG), harbor master or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.

Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with 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. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.

While we do not carry oil as cargo, we do carry fuel oil (bunkers) in our drybulk carriers. We currently maintain, for each of our vessels, pollution liability insurance coverage of $1.0 billion per incident. If the damages from a catastrophic spill exceeded our insurance coverage, that would have a material adverse effect on our financial condition and operating cash flows.

International Maritime Organization

The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,” the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to drybulk, tanker and LNG 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 in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; new emissions standards, titled IMO-2020, took effect on January 1, 2020.

Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited. We believe that all our vessels are currently compliant in all material respects with these regulations.

The Marine Environment Protection Committee, or “MEPC,” adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or certain exhaust gas cleaning systems. Ships are now required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and took effect on March 1, 2020, with the exception of vessels fitted with exhaust gas cleaning equipment (“scrubbers”) which can carry fuel of higher sulfur content. These regulations subject ocean-going vessels to stringent emissions controls, and may cause us to incur substantial costs.

Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs. Other areas in China are subject to local regulations that impose stricter emission controls. In December 2021, the member states of the Convention for the Protection of the Mediterranean Sea Against Pollution (“Barcelona Convention”) agreed to support the designation of a new ECA in the Mediterranean. On December 15, 2022, MEPC 79 adopted the designation of a new ECA in the Mediterranean, with an effective date of May 1, 2025. In July 2023, MEPC 80 announced three new ECA proposals, including the Canadian Arctic waters and the North-East Atlantic Ocean. 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 U.S. Environmental Protection Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vessels with a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in 2010. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.

As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO used such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.

As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans (“SEEMPs”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. Additionally, MEPC 75 adopted amendments to MARPOL Annex VI which brought forward the effective date of the EEDI’s “phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships, and LNG carriers.

Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. These amendments introduce requirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbon intensity of international shipping. The requirements include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”), and (2) operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (“CII”). The attained EEXI is required to be calculated for ships of 400 gross tonnage and above, in accordance with different values set for ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual operational CII. Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content. MEPC 75 also approved draft amendments to MARPOL Annex I to prohibit the use and carriage for use as fuel of heavy fuel oil (“HFO”) by ships in Arctic waters on and after July 1, 2024. The draft amendments introduced at MEPC 75 were adopted at the MEPC 76 session in June 2021 and entered into force in November 2022, with the requirements for EEXI and CII certification becoming effective from January 1, 2023. MEPC 77 adopted a non-binding resolution which urges Member States and ship operators to voluntarily use distillate or other cleaner alternative fuels or methods of propulsion that are safe for ships and could contribute to the reduction of Black Carbon emissions from ships when operating in or near the Arctic. MEPC 79 adopted amendments to MARPOL Annex VI, Appendix IX to include the attained and required CII values, the CII rating and attained EEXI for existing ships in the required information to be submitted to the IMO Ship Fuel Oil Consumption Database. The amendments will enter into force on May 1, 2024. In July 2023, MEPC 80 approved the plan for reviewing CII regulations and guidelines, which must be completed at the latest by January 1, 2026. There will be no immediate changes to the CII framework, including correction factors and voyage adjustments, before the review is completed.

We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Safety Management System Requirements

The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC standards.

Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.

Although all our vessels are currently ISM Code-certified, such certification may not be maintained by all our vessels at all times. Non-compliance with the ISM Code may subject such party to increased liability, invalidate existing insurance or decrease available insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. For example, the U.S. Coast Guard and E.U. authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and E.U. ports.

Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (“GBS Standards”).

Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendments which took effect on January 1, 2020 also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMO type 9 tank, (2) new abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas. Additional amendments, which came into force on June 1, 2022, include (1) addition of a definition of dosage rate, (2) additions to the list of high consequence dangerous goods, (3) new provisions for medical/clinical waste, (4) addition of various ISO standards for gas cylinders, (5) a new handling code, and (6) changes to stowage and segregation provisions.

The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

The IMO’s Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for Ships Operating in Polar Water (the “Polar Code”). The Polar Code, which entered into force on January 1, 2017, covers design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution prevention as well as recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and after January 1, 2018, ships constructed before January 1, 2017 are required to meet the relevant requirements by the earlier of their first intermediate or renewal survey.

Furthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. By IMO resolution, administrations are encouraged to ensure that cyber-risk management systems are incorporated by ship-owners and managers by their first annual Document of Compliance audit after January 1, 2021. In February 2021, the U.S. Coast Guard published guidance on addressing cyber risks in a vessel’s safety management system. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. To comply with these regulations, we developed a Cybersecurity Manual for all our vessels that was reviewed by IMO’s Maritime Safety Committee in March 2021.

In June 2022, SOLAS also set out new amendments that took effect January 1, 2024, which include new requirements for: (1) the design for safe mooring operations, (2) the Global Maritime Distress and Safety System (“GMDSS”), (3) watertight integrity, (4) watertight doors on cargo ships, (5) fault-isolation of fire detection systems, (6) life-saving appliances, and (7) safety of ships using LNG as fuel. These new requirements may impact the cost of our operations.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWM Convention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast water management certificate.

On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation of ballast water management systems on such vessels at the first IOPP renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under these amendments, all ships must meet the D-2 standard by September 8, 2024. Costs of compliance with these regulations may be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention which would require a commissioning test of the ballast water management system for the initial survey or when performing an additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system certified under the BWM Convention. These amendments entered into force on June 1, 2022. In December 2022, MEPC 79 agreed that it should be permitted to use ballast tanks for temporary storage of treated sewage and grey water. MEPC 79 also established that ships are expected to return to D-2 compliance after experiencing challenging uptake water and bypassing a BWM system should only be used as a last resort. In July 2023, MEPC 80 approved a plan for a comprehensive review of the BWM Convention over the next three years and the corresponding development of a package of amendments to the Convention. MEPC 80 also adopted further amendments relating to Appendix II of the BWM Convention concerning the form of the Ballast Water Record Book, which are expected to enter into force in February 2025. A protocol for ballast water compliance monitoring devices and unified interpretation of the form of the BWM Convention certificate were also adopted.

Once mid-ocean exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements.

The IMO also adopted the Bunker Convention to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). 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.

Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the CLC or the Bunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.

Anti‑Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention.” The Anti‑fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. Vessels of 24 meters in length or more but less than 400 gross tonnage engaged in international voyages will have to carry a Declaration on Anti-fouling Systems signed by the owner or authorized agent. We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention.

In November 2020, MEPC 75 approved draft amendments to the Anti-fouling Convention to prohibit anti-fouling systems containing cybutryne, which applied to ships from January 1, 2023, or, for ships already bearing such an anti-fouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the last application to the ship of such a system. In addition, the IAFS Certificate has been updated to address compliance options for anti-fouling systems to address cybutryne. Ships which are affected by this ban on cybutryne must receive an updated IAFS Certificate no later than two years after the entry into force of these amendments. Ships which are not affected (i.e. with anti-fouling systems which do not contain cybutryne) must receive an updated IAFS Certificate at the next Anti-fouling application to the vessel. These amendments were formally adopted at MEPC 76 in June 2021 and entered into force on January 1, 2023.

Compliance Enforcement

Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this annual report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be maintained in the future**.** The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

United States Regulations

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200-nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.

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

(i)	injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
(ii)	injury to, or economic losses resulting from, the destruction of real and personal property;
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(iii)	loss of subsistence use of natural resources that are injured, destroyed or lost;
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(iv)	net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
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(v)	lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
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(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.
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OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective March 23, 2022, the new adjusted limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, amount to the greater of $1,300 per gross ton or $1,076,000 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of 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 as required by law where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or 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 each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of drilling operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. In January 2021 current U.S. President Biden signed an executive order temporarily blocking new leases for oil and gas drilling in federal waters. However, attorney generals from 13 states filed suit in March 2021 to lift the executive order, and in June 2021, a federal judge in Louisiana granted a preliminary injunction against the Biden administration, stating that the power to pause offshore oil and gas leases “lies solely with Congress.” In August 2022, a federal judge in Louisiana sided with Texas Attorney General Ken Paxton, along with the other 12 plaintiff states, by issuing a permanent injunction against the Biden Administration’s moratorium on oil and gas leasing on federal public lands and offshore waters. After being blocked by the courts, in September 2023, the Biden administration announced a scaled back offshore oil drilling plan, including just three oil lease sales in the Gulf of Mexico. With these rapid changes, compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.

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. 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 than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports where the Company’s vessels call.

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 an adverse effect on our business and results of operation.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. The CAA requires states to adopt State Implementation Plans, or SIPs, some of which regulate emissions resulting from vessel loading and unloading operations which may affect our vessels.

The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of WOTUS. In 2019 and 2020, the agencies repealed the prior WOTUS Rule and promulgated the Navigable Waters Protection Rule (“NWPR”) which significantly reduced the scope and oversight of EPA and the Department of the Army in traditionally non-navigable waterways. On August 30, 2021, a federal district court in Arizona vacated the NWPR and directed the agencies to replace the rule with the pre-2015 definition. In January 2023, the revised WOTUS rule was codified in place of the vacated NWPR. On May 25, 2023, the United States Supreme Court ruled in the case Sackett v. EPA that only wetlands and permanent bodies of water with a “continuous surface connection” to “traditional interstate navigable waters” are covered by the CWA, further narrowing the application of the WOTUS rule. In August 2023, the EPA and the Department of Army issued the final WOTUS rule, effective September 8, 2023, that largely reinstated the pre-2015 definition and applied the Sackett ruling.

The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and replaces the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance, and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required.

Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.

European Union Regulations

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

Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses.

The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so called “SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control Area, use fuels with a 0.5% maximum sulfur content.

On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector in the European Union’s carbon market, the EU Emissions Trading System (“EU ETS”) as part of its “Fit-for-55” legislation to reduce net greenhouse gas emissions by at least 55% by 2030. On July 14, 2021, the European Parliament formally proposed its plan, which would involve gradually including the maritime sector from 2023 and phasing the sector in over a three-year period. This will require shipowners to buy permits to cover these emissions. The Environment Council adopted a general approach on the proposal in June 2022. On December 18, 2022, the Environmental Council and European Parliament agreed to include maritime shipping emissions within the scope of the EU ETS on a gradual introduction of obligations for shipping companies to surrender allowances equivalent to a portion of their carbon emissions: 40% for verified emissions from 2024, 70% for 2025 and 100% for 2026. Most large vessels will be included in the scope of the EU ETS from the start. Big offshore vessels of 5,000 gross tonnage and above will be included in the 'MRV' on the monitoring, reporting and verification of CO2 emissions from maritime transport regulation from 2025 and in the EU ETS from 2027. General cargo vessels and off-shore vessels between 400-5,000 gross tonnage will be included in the MRV regulation from 2025 and their inclusion in EU ETS will be reviewed in 2026. Furthermore, starting from January 1, 2026, the ETS regulations will expand to include emissions of two additional greenhouse gases: nitrous oxide and methane. Compliance with the Maritime EU ETS will result in additional compliance and administration costs to properly incorporate the provisions of the Directive into our business routines.

Additionally, on July 25, 2023, the European Council of the European Union adopted the Maritime Fuel Regulation under the FuelEU Initiative of its “Fit-for-55” package which sets limitations on the acceptable yearly greenhouse gas intensity of the energy used by covered vessels. Among other things, the Maritime Fuel Regulation requires that greenhouse gas emissions from covered vessels are reduced by 2% starting January 1, 2025, with additional reductions contemplated every five years (up to 80% from January 1, 2050).

Additional EU regulations which are part of the EU’s "Fit-for-55," could also affect our financial position in terms of compliance and administration costs when they take effect.

International Labour Organization

The International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in international voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.

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 with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, former U.S. President Trump announced that the United States intends to withdraw from the Paris Agreement, and the withdrawal became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to rejoin the Paris Agreement, which the U.S. officially rejoined on February 19, 2021.

At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause us to incur additional substantial expenses. At MEPC 77, the Member States agreed to initiate the revision of the Initial IMO Strategy on Reduction of greenhouse gas (“GHG”) emissions from ships, recognizing the need to strengthen the ambition during the revision process. MEPC 79 revised the EEDI calculation guidelines to include a CO2 conversion factor for ethane, a reference to the updated ITCC guidelines, and a clarification that in case of a ship with multiple load line certificates, the maximum certified summer draft should be used when determining the deadweight. A final draft Revised IMO GHG Strategy would be considered by MEPC 80 (which met in July 2023), with a view to adoption.

In July 2023, MEPC 80 adopted a revised strategy, which includes an enhanced common ambition to reach net-zero greenhouse gas emissions from international shipping around or close to 2050, a commitment to ensure an uptake of alternative zero and near-zero greenhouse gas fuels by 2030, as well as i). reducing the total annual greenhouse gas emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and ii). reducing the total annual greenhouse gas emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008.

The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states by 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collect and publish data on carbon dioxide emissions and other information. Under the European Climate Law, the EU committed to reduce its net greenhouse gas emissions by at least 55% by 2030 through its “Fit-for-55” legislation package. As part of that initiative, regulations relating to the inclusion of greenhouse gas emissions from the maritime sector in the European Union’s carbon market, EU ETS, are also forthcoming.

In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executive order to review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions, and in August 2019, the Administration announced plans to weaken regulations for methane emissions. On August 13, 2020, the EPA released rules rolling back standards to control methane and volatile organic compound emissions from new oil and gas facilities. However, U.S. President Biden recently directed the EPA to publish a proposed rule suspending, revising, or rescinding certain of these rules. On November 2, 2021, the EPA issued a proposed rule under the CAA designed to reduce methane emissions from oil and gas sources. The proposed rule would reduce 41 million tons of methane emissions between 2023 and 2035 and cut methane emissions in the oil and gas sector by approximately 74 percent compared to emissions from this sector in 2005. EPA issued a supplemental proposed rule in November 2022 to include additional methane reduction measures. On December 2, 2023, the Biden Administration announced the final rule that includes updated and strengthened standards for methane and other air pollutants from new, modified, and reconstructed sources, as well as Emissions Guidelines to assist states in developing plans to limit methane emissions from existing sources. If these new regulations are finalized, they could affect our operations.

Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or certain weather events.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.

Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities, and mandates compliance with the International Ship and Port Facility Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities 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.

The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.

The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.

Inspection by Classification Societies

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers contracted for construction on or after July 1, 2015. The Rules attempt to create a level of consistency between IACS Societies. **** All of our vessels are certified as being “in class” by all the applicable Classification Societies. Our vessels are currently classed with Lloyd’s Register of Shipping, Bureau Veritas, Rina, DNV and Nippon Kaiji Kyokai. ISM and ISPS certification have been awarded by Bureau Veritas and the Liberian Flag Administration to our vessels and our Managers.

A vessel must undergo annual surveys, intermediate surveys, drydockings 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 drydocked every 30 to 36 months for inspection of the underwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

The following table lists the upcoming intermediate or special survey for the vessels in our current fleet. Special surveys typically require drydocking of the vessels while intermediate surveys may not, depending on the age of the vessel and its condition. The intermediate surveys listed in the table below will not require drydocking of the vessels, unless otherwise indicated below.

Vessel	Next	Type
STARLIGHT	April 2024	Special Survey
EIRINI P	June 2024	Special Survey
TASOS	January 2025	Special Survey
XENIA	February 2026	Special Survey
ALEXANDROS P	March 2025	Intermediate Survey
EKATERINI	April 2026	Intermediate Survey
BLESSED LUCK	February 2027	Intermediate Survey
GOOD HEART	August 2026	Intermediate Survey
MOLYVOS LUCK	April 2027	Intermediate Survey
SANTA CRUZ	June 2025	Special Survey
YANNIS PITTAS	November 2024	Special Survey
MARIA	April 2025	Special Survey
CHRISTOS K	May 2025	Special Survey

Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates.

Hull and Machinery Insurance

We procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance and war risk insurance and freight, demurrage and defense insurance for our fleet. We generally do not maintain insurance against loss of hire (except for certain charters for which we consider it appropriate), which covers business interruptions that result in the loss of use of a vessel.

Protection and Indemnity Insurance

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

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website states that the Pool provides a mechanism for sharing all claims in excess of US$10 million up to, currently, approximately $8.9 billion. As a member of a P&I Association, which is a member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.

C.	Organizational structure

EuroDry is the sole or majority owner of all subsidiaries listed in Note 1 of our consolidated financial statements under “Item 18. Financial Statements” and in Exhibit 8.1 to this annual report.

D.	Property, plants and equipment

We do not own any real estate property. As part of the management services provided by Eurobulk during the period in which we have conducted business to date, we have shared, at no additional cost, offices with Eurobulk. We do not have current plans to lease or purchase office space, although we may do so in the future.

Our interests in our vessels are owned through our wholly-owned and majority owned vessel owning subsidiaries and these are our only material properties. Please refer to Note 1, “Basis of Presentation and General Information”, of the attached Financial Statements for a listing of our vessel owning subsidiaries. Our vessels are subject to first priority mortgages, which secure our obligations under our various credit facilities. For further details regarding our credit facilities, refer to “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Credit Facilities.”

Item 4A.	Unresolved Staff Comments

None.

Item 5.	Operating and Financial Review and Prospects

The following discussion should be read in conjunction with “Item 3. Key Information – D. Risk Factors”, “Item 4.B. Business Overview”, and our financial statements and footnotes thereto contained in this annual report. This discussion contains forward-looking statements, which are based on our assumptions about the future of our business. Our actual results may differ materially from those contained in the forward-looking statements. Please read “Forward-Looking Statements” for additional information regarding forward-looking statements used in this annual report. Reference in the following discussion to “we,” “our” and “us” refer to EuroDry and our subsidiaries, except where the context otherwise indicates or requires.

We actively manage the deployment of our fleet between spot market voyage charters and short term time charters, which generally last from several days to several weeks, and medium and long term time charters, which can last up to several years. Some of our vessels may participate in shipping pools, or, in some cases in contracts of affreightment. We may also use FFA contracts to provide partial coverage for our drybulk vessels – as a substitute for time charters – in order to increase the predictability of our revenues.

Vessels operating on medium and long term time charters provide more predictable cash flows but can yield lower profit margins than vessels operating in the spot market under voyage charters and short term charter market during periods characterized by favorable market conditions. Vessels operating in the spot market under voyage charters and short term charter market generate revenues that are less predictable but may enable us to achieve increased profit margins during periods of high vessel rates although we are exposed to the risk of declining vessel rates, which may have a materially adverse impact on our financial performance. Vessels operating in pools benefit from better scheduling, and thus increased utilization, and better access to contracts of affreightment due to the larger commercial operation of the pool. We are constantly evaluating opportunities to increase the number of our vessels deployed on medium and longer term time charters or to participate in shipping pools (if available for our vessels), however we only expect to enter into additional time charters or shipping pools if we can obtain contract terms that satisfy our criteria. We carefully evaluate the length and the rate of the time charter contract at the time of fixing or renewing a contract considering market conditions, trends and expectations.

We constantly evaluate vessel purchase opportunities to expand our fleet accretive to our earnings and cash flow. Additionally, we will consider selling certain of our vessels when favorable sales opportunities present themselves. If, at the time of sale, the carrying value is less than the sales price, we will realize a gain on sale, which will increase our earnings, but if, at the time of sale, the carrying value of a vessel is more than the sales price, we will realize a loss on sale, which will negatively impact our earnings. Please see “Critical Accounting Estimates”, below, for a further discussion of the consequences of selling our vessels for amounts below their carrying values.

Significant Developments in 2023

Vessel Acquisitions & Partnership

During 2023, we acquired three Ultramax drybulk vessels. On September 8, 2023 we agreed to acquire M/V Yannis Pittas a 63,177 dwt drybulk vessel built in 2014, M/V Christos K, a 63,197 dwt drybulk vessel built in 2015 and M/V Maria, a 63,153 dwt drybulk vessel built in 2015 from unrelated third parties for a total price of $65 million. We took delivery of each vessel on October 10, 2023, October 25, 2023 and November 6, 2023, respectively.

On October 26, 2023, we announced that we formed a partnership with a number of investors represented by NRP Project Finance AS (“NRP Investors”) regarding the ownership of M/V Christos K and M/V Maria (“Partnership”), whereby NRP Investors acquired a non-controlling interest of 39% ownership in the respective limited partnership entities, Chistos Ultra LP (owner of M/V Christos K) and Maria Ultra LP (owner of M/V Maria), with the Company holding the remaining 61% controlling interest.

New Loans

On June 20, 2023, we signed a term loan facility and drew a loan of $14.0 million in order to partly re-finance M/V Ekaterini. On October 12, 2023, we signed a term loan facility and drew a loan of $10.5 million in order to finance part of the acquisition cost of M/V Yannis Pittas. On October 23, 2023, we signed a term loan facility and drew a loan of $22.0 million in order to finance part of the acquisition cost of M/V Christos K and M/V Maria.

Share Repurchases

On August 8, 2022 we announced that our Board of Directors approved a share repurchase program for up to a total of $10 million of our common stock, which was renewed in August 2023 for another year. Share repurchases are made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program are determined by management based upon market conditions and other factors. The program does not require us to purchase any specific number or amount of shares and may be suspended or reinstated at any time at our discretion and without notice.

As of March 31, 2024 we had repurchased 299,646 of our common stock in the open market for a total of about $4.7 million, under this plan.

A.	Operating results

Factors Affecting Our Results of Operations

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 by us including off-hire days associated with major repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.

Available days. We define available days as the total number of Calendar days net of off-hire days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. The shipping industry uses available days to measure the number of days in a period during which vessels were available to generate revenues.

Voyage days. We define voyage days as the total number of Available days net of off-hire days associated with unscheduled repairs or days waiting to find employment but including days our vessels were sailing for repositioning. The shipping industry uses voyage days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes. Our definition of Voyage days may not be comparable to that used by other companies in the shipping industry.

Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our 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 either waiting to find employment, or commercial off-hire, or for reasons such as unscheduled repairs or other off-hire time related to the operation of the vessels, or operational off-hire. We distinguish our fleet utilization into commercial and operational. We calculate our commercial fleet utilization by dividing our available days net of commercial off-hire days during a period by our available days during that period. We calculate our operational fleet utilization by dividing our available days net of operational off-hire days during a period by our available days during that period.

Spot Charter Rates. We calculate spot charter rates on contracts made in the spot market for the use of a vessel for a specific voyage (“voyage charter”) to transport a specified agreed upon cargo at a specified freight rate per ton or occasionally a lump sum amount. Under a voyage charter agreement, the charter party generally commits to a minimum amount of cargo and the charterer is liable for any short loading of cargo or "dead" freight. Spot charter rates are volatile and fluctuate on a seasonal and year to year basis. The fluctuations 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.

Time Charter Equivalent (“TCE”). A standard maritime industry performance measure used to evaluate performance is the daily TCE. Daily TCE revenues are time charter revenues and voyage charter revenues, gross of commissions, minus voyage expenses divided by the number of voyage days during the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by a charterer under a time charter whereas under spot market voyage charters, we pay such voyage expenses. We believe that the daily TCE neutralizes the variability created by unique costs associated with particular voyages or the employment of drybulk carriers on time charter or on the spot market (drybulk vessels are, generally, chartered on a time charter basis) and provides additional meaningful information in relation to the revenues generated by our vessels. Our definition of TCE may not be comparable to that used by other companies in the shipping industry.

Basis of Presentation and General Information

We use the following measures to describe our financial performance:

Time charter revenue and Voyage charter revenue. Our charter revenues are driven primarily by the number of vessels in our fleet, the number of voyage days during which our vessels generate revenues and the amount of daily charter revenue that our vessels earn under charters, which, 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 drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the transportation market, the number of vessels on time charters, voyage charters and in pools and other factors affecting charter rates in the drybulk market.

Commissions. We pay commissions on all chartering arrangements of 1.25% to Eurochart, a company affiliated with our CEO, plus additional commission of usually up to 1.25% to other brokers involved in the transaction, plus address commission of usually up to 3.75% deducted from charter hire. These additional commissions, as well as changes to charter rates will cause our commission expenses to fluctuate from period to period. Eurochart also receives a fee equal to 1% of the vessel sales price calculated as stated in the relevant memorandum of agreement for any vessel sold by it on our behalf. Eurochart also receives a commission of 1% of the vessel purchase price for acquisitions the Company makes using Eurochart’s services, which is paid by the seller or the buyer of the vessel, depending on the terms of the relevant memorandum of agreement.

Voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage which would otherwise be paid by the charterer under a time charter contract or paid by the Company when the vessel is off hire. Under time charters, the charterer pays voyage expenses whereas under spot market voyage charters, we pay such expenses. The amounts of such voyage expenses are driven by the mix of charters undertaken during the period. Voyage expenses are also incurred, when our vessels are idle or are sailing for repositioning purposes or for drydocking, which we pay.

Vessel operating expenses. 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. Our vessel operating expenses, which generally represent fixed costs, have historically changed in line with 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 or inflationary increases) may also cause these expenses to increase.

Related party management fees. These are the fees that we pay to our affiliated ship managers (Eurobulk and Eurobulk FE) under our management agreements for the technical and commercial management that they perform on our behalf.

Vessel depreciation. We depreciate our vessels on a straight-line basis with reference to the cost of the vessel, age and scrap value as estimated at the date of acquisition. Depreciation is calculated over the remaining useful life of the vessel. Remaining useful lives of property are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revisions of estimated lives are recognized over current and future periods.

Dry-docking expenses. Dry-docking expenses relate to regularly scheduled intermediate survey or special survey necessary to preserve the quality of our vessels as well as to comply with international shipping standards and environmental laws and regulations. Our vessels are required to be drydocked approximately every 30 to 60 months for major repairs and maintenance that cannot be performed while the vessels are trading. Dry-docking expenses are accounted for using the direct expense method as this method eliminates the significant amount of time and subjectivity to determine which costs and activities related to drydocking and special survey should be deferred.

General and administrative expenses. We incur expenses consisting mainly of executive compensation, share-based compensation, professional fees, directors’ liability insurance and reimbursement of our directors’ and officers’ travel-related expenses. We acquire executive services of our chief executive officer, chief financial officer, chief administrative officer, internal auditor and corporate secretary, through Eurobulk as part of our Master Management Agreement.

Interest and other financing costs. We traditionally finance vessel acquisitions partly with loan facilities on which we incur interest expense. The interest rate we pay will generally be linked to SOFR, although from time to time we may utilize fixed rate loans or could use interest rate swaps to eliminate our interest rate exposure. Interest due is expensed in the period incurred. We also incur financing costs in connection with establishing those facilities, which are presented as a direct deduction from the carrying amount of the relevant debt liability and amortize them to interest and other financing costs over the term of the underlying obligation using the effective interest method; the un-amortized portion is written-off if the loan is prepaid early.

(Loss) / gain on derivatives, net. We enter into interest rate swap transactions to manage interest costs and risk associated with changing interest rates with respect to our variable interest loans. Interest rate swaps are recorded in the balance sheet as either assets or liabilities, measured at their fair value (Level 2) with changes in such fair value recognized in earnings under (Loss) / gain on derivatives, net, unless specific hedge accounting criteria are met.

We also take positions in FFAs with an objective to utilize those instruments as economic hedges of a vessel owner's exposure to the charter market by providing for the sale of a contracted charter rate along a specified route and period of time. The fair value of FFAs is treated as asset/liability until they are settled. Any such settlements by us or settlements to us under FFAs are recorded under (Loss) / gain on derivatives, net. The fair value of FFAs is determined through Level 1 inputs of the fair value hierarchy (quoted prices from the applicable exchanges). Our FFAs do not qualify for hedge accounting and therefore unrealized gains or losses are recognized under (Loss) / gain on derivatives, net.

In evaluating our financial condition, we focus on the above measures to assess our historical operating performance and we use future estimates of the same measures to assess our future financial performance. In addition, we use the amount of cash at our disposal and our total indebtedness to assess our short-term liquidity needs and our ability to finance additional acquisitions with available resources (see also discussion under “Capital Expenditures” below). In assessing the future performance of our present fleet, the greatest uncertainty relates to the spot market performance which affects those of our vessels that are not employed under fixed time charter contracts as well as the level of the new charter rates for the charters that are to expire. Decisions about the acquisition of additional vessels or possible sales of existing vessels are based on financial and operational evaluation of such action and depend on the overall state of the drybulk vessel market, the availability of purchase candidates, available employment, anticipated drydocking cost and our general assessment of economic prospects for the sectors in which we operate.

Interest income. We earn interest income on our cash deposits with our lenders and other financial institutions.

Results from Operations

The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2022 and 2023. This information should be read together with our audited consolidated financial statements and related notes included elsewhere in this annual report.

Fleet Data (1)	2022			2023
Average number of vessels		10.4			10.6
Calendar days		3,789			3,856
Available days		3,627			3,786
Voyage days		3,595			3,707
Utilization Rate (percent)		99.1	%		97.9	%
	(In U.S. Dollars per day per vessel)
---	---	---	---
Average TCE rate (2)		21,304	12,528
Vessel Operating Expenses		5,103	5,383
Management Fees		784	851
G&A Expenses		811	897
Total Operating Expenses excluding drydocking expenses		6,698	7,131
Drydocking expenses		1,271	883
	2022			2023
---	---	---	---	---	---	---
Statement of Operations Data
Time charter revenue		74,569,867			47,824,857
Voyage charter revenue		-			2,609,775
Commissions		(4,386,498	)		(2,842,708	)
Net revenue	****	70,183,369		****	47,591,924
Voyage expenses, net		2,025,120			(3,993,031	)
Vessel operating expenses		(19,333,898	)		(20,758,708	)
Dry-docking expenses		(4,816,558			(3,404,323	)
Vessel depreciation		(10,757,177	)		(10,966,621	)
Related party management fees		(2,968,073			(3,281,361	)
General and administrative expenses		(3,072,583			(3,459,943	)
Net gain on sale of vessel		2,856,525			-
Other operating loss		-			(500,000	)
Bad debt expense		-			(134,294	)
Operating income	****	34,116,725		****	1,093,643
Interest and other financing costs		(3,853,047	)		(6,486,814	)
Gain on derivatives, net		3,189,610			1,218,375
Interest income		46,298			897,618
Foreign exchange gain / (loss)		43,085			(5,794	)
Net income / (loss)	****	33,542,671		****	(3,282,972	)
Net loss attributable to the non-controlling interest		-			374,068
Net income / (loss) attributable to controlling shareholders	****	33,542,671		****	(2,908,904	)
Earnings / (loss) per share attributable to common shareholders, basic	****	11.66		****	(1.05	)
Weighted average number of shares outstanding during period, basic	****	2,876,320		****	2,763,121
Earnings / (loss) per share attributable to common shareholders, diluted	****	11.61		****	(1.05	)
Weighted average number of shares outstanding during the period, diluted	****	2,889,991		****	2,763,121

(1) For the definition of calendar days, available days, voyage days and utilization rate, see above.

(2) Time charter equivalent rate, or TCE rate, is a measure of the average daily net revenue performance of our vessels and is determined by dividing time charter revenue and voyage charter revenue, if any, gross of commissions, less voyage expenses or time charter equivalent revenues, or TCE revenues, by the number of voyage days during the relevant time period. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with time charter revenue and voyage charter revenue, the most directly comparable U.S. GAAP measure, because it assists the Company’s management in making decisions regarding the deployment and use of its vessels and because the Company believes that it provides useful information to investors regarding the Company’s financial performance. TCE revenues and TCE rate are also standard shipping industry performance measures used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot voyage charters, time charters, pool agreements and bareboat charters) under which the vessels may be employed between the periods. Our definition of TCE revenues and TCE rate may not be comparable to that used by other companies in the shipping industry.

The following table reflects the reconciliation of TCE revenues to time charter revenue and voyage charter revenue, if any, as reflected in the consolidated statements of operations (see discussion above) and our calculation of TCE rates for the periods presented.

	Year Ended December 31,
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
	2022		2023
Time charter revenue		74,569,867		47,824,857
Voyage charter revenue		-		2,609,775
Voyage expenses, net		2,025,120		(3,993,031	)
Time Charter Equivalent or TCE Revenues		76,594,987		46,441,601
Voyage days		3,595.3		3,707.0
Average TCE rate		21,304		12,528

Year ended December 31, 2023 compared to year ended December 31, 2022

Time charter revenue and voyage charter revenue. Time charter revenue and voyage charter revenue, collectively Voyage revenue, for 2023 amounted to $50.43 million, a decrease of 32.4% compared to $74.57 million for the year ended December 31, 2022, due to the fact that market charter rates in 2023 were on average at significantly lower levels for our vessels compared to 2022, slightly offset by the increased number of vessels operating in 2023 compared to 2022. In 2023, we operated an average of 10.6 vessels compared to 10.4 vessels in 2022. Our fleet earned revenue over 3,707 voyage days in 2023 as compared to 3,595 voyage days in 2022. While employed, our vessels generated a TCE rate of $12,528 per day per vessel in 2023 compared to a TCE rate of $21,304 per day per vessel in 2022, a decrease of 41.2%. The average TCE rate our vessels achieve is a combination of the time charter rate earned by our vessels under fixed rate time charter contracts, which is not influenced by market developments during the duration of the charter (unless the two charter parties renegotiate the terms of the charter or the charterer is unable to make the contracted payments or we enter into new charter party agreements), and the TCE rate earned by our vessels employed under time charters linked to an index, voyage charters and pool agreements, which is influenced by market developments.

Commissions. We paid a total of $2.84 million in charter commissions for the year ended December 31, 2023, representing 5.6% of charter revenues. Over the year ended December 31, 2022, commissions paid were $4.39 million, also representing a 5.9% of charter revenues.

Voyage expenses. Voyage expenses, net for the year amounted to $3.99 million resulting mainly from expenses incurred by one of our vessels while employed under a spot charter, vessels repositioning between charters and expenses during the detention of one of our vessels in Corpus Christi. For the year ended December 31, 2022, voyage expenses amounted to an income of $2.03 million, resulting mainly from gain on bunkers. Our vessels are generally chartered under time charter contracts. Voyage expenses are dependent on the number of spot charters, the cost of fuel, port costs and canal tolls and the number of days our vessels sailed without a charter, as well as on the price we pay for bunkers on board when a vessel is delivered and redelivered to and from a charterer.

Vessel operating expenses. Vessel operating expenses were $20.76 million in 2023 compared to $19.33 million in 2022. Daily vessel operating expenses per vessel amounted to $5,383 per day in 2023 versus $5,103 per day in 2022, an increase of 5.5%, mainly due to inflationary increases and the net effect of the increased average number of vessels compared to the same period of 2022.

Related party management fees. These are part of the fees we pay to Eurobulk and Eurobulk FE under our Master Management Agreement. During 2023, Eurobulk and Eurobulk FE charged us 775 Euros per day per vessel totaling $3.28 million for the year, or $851 per day per vessel. During 2022, Eurobulk and Eurobulk FE charged us 720 Euros per day per vessel totaling $2.97 million for the year, or $784 per day per vessel. The increase in related party management fees is attributable to the higher number of vessels in our fleet and the increase in daily vessel management fee to account for inflation, partly offset by the favorable movement of the euro/dollar exchange rate.

General and administrative expenses. These expenses include the fixed portion of our management fees, incentive awards, legal and auditing fees, directors’ and officers’ liability insurance and other miscellaneous corporate expenses. In 2023, general and administrative expenses increased to $3.46 million compared to $3.07 million for the same period of 2022. The increase is attributable to an additional cost of $0.44 million that was incurred during the last quarter of 2023 in relation to the formation of the Partnership.

Drydocking expenses. These are expenses we pay for our vessels to complete a drydocking as part of an intermediate or special survey. In 2023, three of our vessels completed their special or intermediate survey with drydocking and one vessel passed her intermediate survey in water (in lieu of drydock), for a total cost of $3.40 million. In 2022, five vessels underwent special survey and one vessel passed her intermediate survey in water (in lieu of drydock) for a total cost of $4.82 million.

Vessel depreciation. Vessel depreciation for 2023 increased to $10.97 million, from $10.76 million in 2022. The increase is mainly attributable to the higher average number of vessels operating in the same period.

Net gain on sale of vessel. In 2022, we sold one vessel for a total of $9.37 million of net proceeds and we recorded a $2.86 million net gain on the sale. In 2023 we had no vessel sales.

Bad debt expense. In 2023, we wrote-off certain trade receivables by recording a bad debt expense of $0.13 million. In 2022, we had no bad debt expense.

Other operating loss. In 2023, we recorded a provision of $0.50 million for anticipated costs related to the detention of one of our vessels in Corpus Christi presented as other operating loss.

Interest and other financing costs. Interest and other financing costs for the twelve months of 2023 amounted to $6.49 million compared to $3.85 million the same period of 2022. Interest expense for the period was higher due to the increased amount of debt and the increased benchmark rates of our loans during the period as compared to the same period of last year.

(Loss) / gain on derivatives, net. In 2023, we had a $1.92 million of unrealized loss and a $1.94 million realized gain on interest rate swaps as well as a $1.33 million unrealized loss and a $2.53 million realized gain of FFA contracts, as compared to a $2.18 million of unrealized gain and a $0.14 million realized loss on five interest rate swaps as well as a $0.04 million unrealized gain and a $1.10 million realized gain of FFA contracts for the same period of 2022. We enter into interest rate swaps to mitigate our exposure to possible increases in interest rates. We enter into FFA contracts to mitigate our exposure to possible declines in the drybulk market rates.

Interest income. In 2023, we had a $0.90 million of interest income, compared to an amount of $0.05 million for 2022. The increase of interest income is attributable to both higher interest rates earned and higher cash balances maintained during the twelve months of 2023 compared to the corresponding period in 2022.

Net loss attributable to non-controlling interest. As a result of the 39% ownership stake in M/V “Maria” and M/V “Christos K” by NRP investors, we recorded a net loss attributable to the non-controlling interest for the year ended December 31, 2023 of $0.37 million. The amount was fully allocated to and reduced the non-controlling interest.

Net income / (loss) attributable to controlling shareholders. As a result of the above, net loss attributable to controlling shareholders for the year ended December 31, 2023 was $2.91 million, as compared to a net income of $33.54 million for the year ended December 31, 2022.

Year ended December 31, 2022 compared to year ended December 31, 2021

For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part I, Item 5, “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2022.

B.	Liquidity and Capital Resources

Historically, our sources of funds have been equity provided by our shareholders, operating cash flows and long-term borrowings. Our principal use of funds has been capital expenditures to establish and expand our fleet, maintain the quality of our vessels during operations and the periodically required drydockings, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and, if necessary, operating shortfalls, make principal repayments on outstanding loan facilities, and pay preferred dividends.

Our short-term liquidity requirements include paying operating expenses, funding working capital requirements, interest and principal payments on outstanding debt, repurchasing common shares under our share repurchase program and maintaining cash reserves to strengthen our position against adverse fluctuations in operating cash flows. Our primary source of short-term liquidity is cash generated from operating activities, available cash balances and portions from debt and equity financings.

Our long-term liquidity requirements are funding vessel acquisitions and debt repayment. Sources of funding for our long-term liquidity requirements include cash flows from operations, bank borrowings, issuance of debt and equity securities, and vessel sales.

Our total cash and cash equivalents and restricted cash at December 31, 2023 were $14.10 million, a decrease of $23.02 million from $37.12 million at December 31, 2022. We hold cash and cash equivalents primarily in U.S. Dollars, with a minor balance held in Euros. We conduct our funding and treasury activities based on corporate policies designed to minimize borrowing costs and maximize investment returns while maintaining the safety of the funds and appropriate levels of liquidity for our purposes.

We are exposed to market risk from changes in interest rates and market rates for vessels. We use interest rate swaps to manage interest costs and the risks associated with changing interest rates of some of our loans. Please refer to "Item 11 – Quantitative and Qualitative Disclosures about Market Risk."

We expect to rely on cash available, funds generated from operating cash flows, funds from our shareholders, equity offerings and long-term borrowings to meet our liquidity needs going forward and to finance our capital expenditures and working capital needs in 2024 and beyond.

Summary of Contractual Obligations

Contractual obligations are set forth in the following table as of December 31, 2023:

In U.S. dollars (US$)
Bank debt	104,835,000	18,050,000	19,320,000	49,965,000	17,500,000
Interest Payments (1)	15,831,413	6,489,295	6,646,877	2,147,403	547,838
Vessel Management fees (2)	16,432,599	4,227,795	8,051,782	4,153,022	-
Other Management fees (3)	5,774,403	1,400,000	2,884,560	1,489,843	-
Total	142,873,415	30,167,090	36,903,219	57,755,268	18,047,838

(1) Assuming the amortization of the loans as of December 31, 2023 described above, each loan’s interest rate margin over SOFR plus credit adjustment spread (“CAS”) for the loans with relevant transition clauses from LIBOR, and an average SOFR of about 4.79%, 2.30%, 1.58%, 1.74%, 2.18% and 2.76% per annum for the six years up to 2029, respectively, based on the SOFR yield curve as of December 31, 2023. For loans with interest rate margins over SOFR, assuming the amortization of the remaining loans as of December 31, 2023 described above, each loan’s interest rate margin over SOFR and average SOFR of about 4.53%, 2.04%, 1.32%, 1.48%, 1.91% and 2.50% per annum for the following five years up to 2029, respectively, based on the SOFR yield curve as of December 31, 2023. Also includes our obligation to make payments required as of December 31, 2023 under our interest rate swap agreements based on the same SOFR assumptions.

(2) Refers to our obligation for management fees we expect to incur under our Master Management agreements and management agreements with the shipowning companies in effect as of January 1, 2023 and expiring on January 1, 2028. The management fees have been computed for 2024 based on the agreed rate of 810 Euros per day per vessel (approximately $891) which was adjusted from the previous level of 775 Euros to reflect Eurozone’s inflation over 2023. For the years after 2024, we have assumed an annual increase in the daily management fee of 2.0% to account for inflation. We assumed a Euro to US dollar exchange rate of 1.10. We further assume that we hold our vessels until they reach 25 years of age, after which they are considered to be scrapped and no long bear obligations and a fleet of 13 vessels in 2024 until January 12, 2025 as one of our vessels will have reached 25 years, and 12 vessels in 2025 and the subsequent years.

(3) Refers to our obligation for management fees of $1.40 million per year under our Master Management Agreement with Eurobulk for the cost of providing executive services to the Company, which was adjusted from the previous level of $1.35 million to reflect reported inflation in Eurozone over 2023. This fee is adjusted for inflation in the Eurozone during the previous calendar year every January 1st. For the years after 2024, we have assumed an annual increase in the annual management fees of 2.0% to account for inflation. The agreement expires on January 1, 2028.

Cash Flows

As of December 31, 2023, we had a working capital deficit of $1.26 million, partly due to a balloon payment on the Company’s long-term debt. For the year ended December 31, 2023 we had a net loss of $3.28 million, a net loss attributable to controlling shareholders of $2.91 million and generated net cash from operating activities of $11.81 million. As of December 31, 2023, our cash balance amounted to $8.00 million and cash in restricted retention accounts amounted to $6.10 million. We intend to fund our working capital requirements via cash on hand and cash flows from operations. In the event that these sources are not sufficient, we may also use funds from debt refinancing, debt balloon payment refinancing, proceeds from our on-going at-the-market offering and other equity offerings and sell vessels (where equity and liquidity will be released), if required, among other options. We believe we will have adequate funding through the sources described above and, accordingly, we believe we have the ability to continue as a going concern and finance our obligations as they come due over the next twelve months following the date of the issuance of these financial statements. Consequently, the consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

We therefore believe that our current cash balance, and our operating cash flows to be generated over the short-term period will be sufficient to meet our 2024 liquidity needs and at least through the end of the first half of 2025, including funding the operations of our fleet, capital expenditure requirements and any other present financial requirements. However, we may seek additional indebtedness to finance future vessel acquisitions in order to maintain our cash position or to refinance our existing debt in more favorable terms. Our practice has been to fund the acquisition cost of dry bulk carriers using a combination of funds from operations and bank debt secured by mortgages on our dry bulk carriers held by the relevant lenders.

Year ended December 31, 2023 compared to year ended December 31, 2022

Net cash from operating activities.

Our net surplus from cash flows provided by operating activities for 2023 was $11.81 million as compared to a surplus of $32.99 million in 2022.

The major drivers of the change of cash flows from operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022, are the following: the decrease in market rates during the year ended December 31, 2023, which resulted in a decreased TCE rate of $12,528 compared to $21,304 for the year ended December 31, 2022. The decrease in the TCE is also reflected in the decrease of our net income (excluding non-cash items) to $12.08 million for the year ended December 31, 2023 from $40.24 million for the corresponding period in 2022. For the year ended December 31, 2023, we had a net working capital outflow of $0.27 million, as compared to a net working outflow of $7.25 million for the year ended December 31, 2022, resulting mainly from a significant increase in the amounts collected from charterers for timing reasons, which partially offsets the abovementioned decrease.

Net cash from investing activities.

Net cash flows used in investing activities were $65.30 million for the year ended December 31, 2023 compared to $28.40 million for the year ended December 31, 2022. The cash flows from investing activities in 2023 relate mainly to the amount paid for the acquisitions of M/V “Maria”, M/V “Christos K” and M/V “Yannis Pittas”. The amount paid in 2022 relates mainly to the acquisitions of M/V “Molyvos Luck” and M/V “Santa Cruz”, partly offset by the proceeds of the sale of M/V “Pantelis”.

Net cash from financing activities.

Net cash flows provided by financing activities were $30.47 million for the year ended December 31, 2023, compared to net cash flows provided by financing activities of $3.01 million for the year ended December 31, 2022. This increase in cash flows provided by financing activities of $27.46 million, compared to the year ended December 31, 2022, is mainly attributable to significantly higher proceeds from long term bank loans (net of loan arrangement fees paid) by $26.17 million and the contribution of $10.14 million made by non-controlling shareholders (NRP Investors). The increase in net cash flows from financing activities was partly offset by an increase in repayments of long-term bank loans of $6.01 million and a decrease of $2.69 million in proceeds from issuance of common stock.

Year ended December 31, 2022 compared to year ended December 31, 2021

Debt Financing

We operate in a capital-intensive industry which requires significant amounts of investment, and we fund a major portion of this investment through long term debt. We maintain debt levels we consider prudent based on our market expectations, cash flow, interest coverage and percentage of debt to capital.

As of December 31, 2023, we had nine outstanding floating interest-bearing loans with a combined outstanding balance of $104.84 million with margins over SOFR ranging from 2.00% to 3.60%. These loans have maturity dates between 2024 and 2029.

Our long-term debt as of December 31, 2023 comprises bank loans granted to our vessel-owning subsidiaries.

Borrower	December 31, 2023			Interest rate (margin +<br> <br>SOFR+CAS)
Kamsarmax One Shipping Ltd. / Ultra One Shipping Ltd.		21,200,000		2.75% + SOFR + CAS
Kamsarmax Two Shipping Ltd.		13,520,000		2.50% + SOFR
Light Shipping Ltd./ Good Heart Shipping Ltd.		14,600,000		2.75% + SOFR + CAS
Eirini Shipping Ltd.		2,690,000		3.60% + SOFR + CAS
Areti Shipping Ltd.		1,000,000		3.50% + SOFR
Blessed Luck Shipowners Ltd.		3,750,000		2.70% + SOFR + CAS
Molyvos Shipping Ltd. / Santa Cruz Shipowners Ltd.		15,575,000		2.25% + SOFR + CAS
Yannis Navigation Ltd.		10,500,000		2.00% + SOFR
Christos Ultra LP. / Maria Ultra LP.		22,000,000		2.10% + SOFR
		104,835,000
Less: Current portion		(18,050,000	)
Long-term portion	****	86,785,000

A description of our loans, as of December 31, 2023, is provided in Note 7 of our attached financial statements. As of December 31, 2023, we are scheduled to repay $18.05 million of the above bank loans in 2024.

Our loan agreements contain covenants.

Our loans have various covenants such as minimum requirements regarding the security cover ratio (the ratio of fair value of vessel to outstanding loan less cash in retention accounts) and restrictions as to changes in management and ownership of the vessel ship-owning companies, distribution of profits or assets (in effect not permitting dividend payment or other distributions in cases that an event of default has occurred), additional indebtedness and mortgage of vessels without the lender’s prior consent, sale of vessels, maximum fleet-wide leverage, sale of capital stock of our subsidiaries, ability to make investments and other capital expenditures, entering in mergers or acquisitions, minimum cash balance requirements and minimum cash retention accounts (restricted cash). When necessary, we do provide supplemental collateral in the form of restricted cash or cross-collateralize vessels to ensure compliance with security cover ratio (“loan-to-value” ratio). Increases in restricted cash required to satisfy loan covenants would reduce funds available for investment or working capital and could have a negative impact on our operations. If we cannot cure any violated covenants, we might be required to repay all or part of our loans, which, in turn, might require us to sell one or more of our vessels under distressed conditions. As of December 31, 2023, we were not in default of any credit facility covenant.

Capital Expenditures

We make capital expenditures from time to time in connection with our vessel acquisitions or capital enhancements to our vessels.

In February 2022, we took delivery of the Supramax drybulk carrier, M/V “Molyvos Luck”, of 57,924 dwt built in 2014 in China, for $21.21 million. In April 2022, we took delivery of the Panamax drybulk carrier, M/V “Santa Cruz”, of 76,440 dwt built in 2005 in Japan, for $15.75 million. In October and November 2023, we took delivery of three Ultramax drybulk carriers, M/V “Yannis Pittas”, of 63,177 dwt built in 2014 in China, for $21.14 million, M/V “Christos K”, of 63,197 dwt built in 2015 in China, for $22.10 million and M/V “Maria”, of 63,153 dwt built in 2015 in China, for $22.10 million.

We currently have five vessels scheduled for drydocking over the next 12 months; three in 2024 and two for the period from January 2025 to March 2025 (refer to section above “B. Liquidity and Capital Resources – Cash Flows” for a discussion of how we plan to cover our working capital requirements and capital commitments).

Dividends

In 2021, 2022 and 2023, the Company declared no dividend on its common stock. From January 29, 2019 to January 29, 2021, the dividend rate on the Series B Preferred Shares was set to increase to 12% per annum and to 14% per annum thereafter. On June 18, 2019, the Board of Directors agreed to redeem approximately $4.3 million of the Series B Preferred Shares with a simultaneous reduction of the dividend rate to 9.25% per annum until January 29, 2021, after which it would increase to 14% per annum. On April 1, 2020, we agreed with the holders of the Series B Preferred Shares to have the option to pay the preferred dividend in-kind at an annual rate of 10.25%, instead of in cash at an annual rate of 9.25%, with effect from April 1, 2020 until January 29, 2021. On January 29, 2021, we redeemed a net amount of $3 million of our Series B Preferred Shares and, contemporaneously agreed with our Series B Preferred Shareholders to reduce the dividend rate of our Series B Preferred Shares to 8% per annum if paid in cash and 9% if paid in-kind at the Company’s option until January 29, 2023, after which date the dividend rate would reset to 14% and would be payable in cash. On December 16, 2021 we redeemed all of our Series B Preferred Shares for an amount of $13.6 million. Within 2021 the Company declared dividends on its Series B Preferred Shares, amounting to $1.09 million, all of which were paid in cash during 2021. We also recorded a preferred deemed dividend of $0.67 million arising out of the redemption of approximately $16.6 million of the Series B Preferred Shares.

C.	Research and development, patents and licenses, etc.

Not applicable.

D.	Trend information

Our results of operations depend primarily on the charter rates that we are able to realize. Charter rates paid for drybulk carriers are primarily a function of the underlying balance between vessel supply and demand.

The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in these vessels, which in turn is influenced by trends in the global economy. One of the main drivers of the drybulk trade has been the growth in imports by China of iron ore, coal and steel products during the last ten years and exports of finished goods. Demand for drybulk carrier capacity is also affected by the operating efficiency of the global fleet, i.e., the average speed the fleet operates, and port congestion.

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 31, 2024, as reported by industry sources, the capacity of the worldwide drybulk fleet was approximately 1,009.07 million dwt with another 89.55 million dwt, or about 8.87% of the present fleet capacity, on order.

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. The average age at which a vessel is scrapped over the last ten years has been between 25 and 27 years, with smaller vessels scrapped at a later age. During strong markets, the average age at which the vessels are scrapped increases; during 2004, 2005, 2006, 2007 and the first nine months of 2008, the majority of the Handysize and Handymax bulkers that were scrapped were in excess of 30 years of age. During the same period, Panamax drybulk carriers were scrapped at an average age of 29 years. However, the scrapping rate increased significantly and the average age decreased since the beginning of October of 2008 when daily charter rates declined. Increased charter rates in the drybulk market commencing in the second quarter of 2009 resulted in decreased scrapping rates of drybulk vessels throughout 2010. However, as the drybulk market declined throughout 2012, 2013, 2014 and 2015, scrapping rates of drybulk vessels increased again. In 2016 drybulk rates decreased and scrapping activity remained strong, at close to 2015 levels. In 2017 scrapping of drybulk vessels declined to almost half of its 2016 level. 2018 saw a further decline in scrapping to 4.4 million dwt, a decline of 70% year on year, while in 2019, a total of 7.9 million dwt were scrapped. In 2020, scrapping activity almost doubled, with a total of 15.20 million dwt being scrapped following the outbreak of COVID-19, at the same time dropping to a third in 2021, with a total of 5.2 million dwt being scrapped. In 2022, the demolition rate remained similar, with 4.3 million dwt having been scrapped during the year. In 2023, demolition picked up once again as new regulations were introduced. 5.4 million dwt was scrapped in 2023. As of March 31, 2024, the year to date 2024 demolition rate is 1.27 million dwt, which is slightly higher than the demolition rate for the corresponding period in 2023 as drybulk export disruptions have picked up lately.

Declining shipping charter hire rates have a negative impact on our earnings when our vessels are employed in the spot market or when they are to be re-chartered after completing a time charter contract. The extent to which a further outbreak of Covid-19, the wars in Ukraine and Palestine and the events in the Red Sea region will impact our future results of operations and financial condition will depend on future developments, which are uncertain and cannot be predicted. As of April 15, 2024, approximately 16.0% of our ship capacity days for the remainder of 2024 are under time charter contracts. If the market rates decrease from current levels or the supply of vessels increases, our vessels may have difficulty securing employment and, if so, may be employed at rates lower than their present charters.

We recognize that the ongoing conflict between Russia and the Ukraine has disrupted supply chains and caused instability in the global economy, while the United States and the European Union, among other countries, announced sanctions against Russia. As discussed above, President Biden issued an executive order setting out sanctions against certain Russian products and investments in Russia, and the United States has also prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum products, including trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, and customs brokering. The ongoing conflict could result in the imposition of further economic sanctions against Russia, and the Company’s business may be adversely impacted. Currently, the Company’s charter contracts have not been affected by the events in Russia and Ukraine; however, it is possible that in the future third parties with whom the Company has or will have charter contracts may be impacted by such events. While in general much uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such tensions could adversely affect the Company’s business, financial condition, results of operation and cash flows.

E.	Critical Accounting 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 accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments 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 estimates 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 the most critical accounting estimates that involve a high degree of judgment and the methods of their application.

Impairment of vessels

We review our vessels held for use for impairment whenever events or changes in circumstances (such as vessel market values, vessel sales and purchases, business plans and overall market conditions) indicate that the carrying amount of the vessels may not be recoverable. If indicators for impairment are present, we determine future undiscounted net operating cash flows for the related vessels and compare them to their carrying values. When the estimate of future undiscounted net operating cash flows, excluding interest charges, expected to be generated by the use and eventual disposition of the vessel is less than its carrying amount, we record an impairment loss calculated by comparing the vessel’s carrying value to its estimated fair market value. We estimate fair market value primarily through the use of third party valuations performed on an individual vessel basis.

The carrying values of the Company’s vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings.

As of December 31, 2023, we had indicators of impairment for three of our vessels. As of December 31, 2022, we had indicators of impairment for four of our vessels. For the vessels with impairment indicators as of December 31, 2022 and 2023, the Company determined the rates to be used in its impairment analysis based on the prevailing market charter rates for the first two years (based on the length of charters that can be secured at the time of the analysis, generally, one to two years) and on inflation-unadjusted historical average rates for similar vessels, from year three onwards. The Company calculated the historical average rates over a 14-year period for 2022 and a 15-year period for 2023, which starts in 2009 and takes into account complete market cycles, and which provides a more representative reference for the long term rates. These rates are used for the period a vessel is not under a charter contract; if there is a contract, the fixed charter rate of the contract is used for the period of the contract.

Our impairment exercise is highly sensitive on variances in the time charter rates and it also requires assumptions for:

●	the effective fleet utilization rate;
●	estimated scrap values;
---	---
●	vessel operating costs;
---	---
●	future drydocking costs; and
---	---
●	probabilities of sale for each vessel.
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Vessel utilization estimates are based on the status of each vessel at the time of the assessment and the Company’s past experience in finding employment for its vessels at comparable market conditions. Cost estimates, like drydocking and operating costs, are based on the Company’s data for its own vessels; past estimates for such costs have generally been very close to the actual levels observed. Specifically, we use our budgeted operating expenses escalated by 2.0% per annum and our budgeted drydocking costs, assuming a five-year special survey cycle. Overall, the assumptions are based on historical trends as well as future expectations. The estimated salvage value of each vessel is $250 per light weight ton, in accordance with the Company’s vessel depreciation policy. We use a probability weighted approach for developing estimates of future cash flows used to test the vessels for recoverability when alternative uses are under consideration (i.e. sale or continuing operation of a vessel). Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.

There can be no assurance as to how long-term charter rates and vessel values will develop as compared to their current levels and as compared to historical average levels for similarly aged vessels or whether they will improve by any significant degree. Charter rates, which improved significantly during 2017 and the first half of 2018, gradually weakened in the second half of 2018 and through most of 2019 and 2020, but improved again for 2021 before softening again during 2022, and may return to their previously depressed levels which could adversely affect our revenue, profitability and future assessments of vessel impairment. 2023 was a relatively moderate year for bulker earnings, as diminished fleet inefficiencies and the cumulative growth of the fleet in recent years offset a strong trade rebound. Recent rises towards the end of 2023 and the beginning of 2024 are mostly attributed to the Panama Canal drought and the reduction of transits. The impairment analysis may determine that the carrying value of a vessel is recoverable if the vessel is held and operated to the end of its useful life, however, if the vessel is sold when the market is depressed, the Company might suffer a loss on the sale. Whether the Company realizes a gain or loss on the sale of a vessel is primarily a function of the relative market values of vessels at the time the vessel was acquired less the accumulated depreciation and impairment, if any, versus the relative market values on the date a vessel is sold.

For a discussion of the potential loss in the case of sale of all of our vessels with market value below their carrying value, we refer to the “Item 4.B. Business Overview – Our Fleet”. For the three vessels that as of December 31, 2023 had an impairment indication, a comparison of the average estimated daily TCE rate used in our impairment analysis with the average “break even rate” for the uncontracted period for each of the vessels is presented below:

Vessel
Eirini P*	-	-	6	13,032	13,032	13,533
Santa Cruz**	-	-	7	13,028	13,028	13,529
Molyvos Luck***	12,650	1	16	12,921	12,921	14,092

All values are in US Dollars.

*M/V Eirini P was chartered in January 2024 at $15,850/day plus a Gross Ballast Bonus of $585,000 until April 2024, then re-chartered at $13,250/day until June 2024.

**M/V Santa Cruz was chartered under a short term charter in February 2024 at $16,600/day plus a Gross Ballast Bonus of $650,000 until March 2024, then re-chartered at $22,500/day until March 2024 and then re-chartered at 17,750/day plus a Gross Ballast bonus of $775,000 until June 2024.

***M/V Molyvos Luck was chartered under a short term charter in February 2024 at $8,000/day until March 2024 when she underwent her special survey in drydock, after which she was re-chartered at $15,750/day until May 2024.

Recent Accounting Pronouncements

Please refer to Note 2 of the financial statements included in Item 18 of this annual report for a description of recent accounting pronouncements that may apply to us.

Russia-Ukraine Conflict & Unrest in the Middle East

The conflict between Russia and Ukraine, which commenced in February 2022, has disrupted supply chains and caused instability and significant volatility in the global economy. Much uncertainty remains regarding the global impact of the conflict in Ukraine, and it is possible that such instability and resulting volatility could significantly increase our costs and adversely affect our business, including our ability to secure charter and financing on attractive terms, and as a result, adversely affect our financial condition, results of operation and cash flows.

As a result of the conflict between Russia and Ukraine, the United States, Switzerland, the European Union, the United Kingdom and others have announced unprecedented levels of sanctions and other measures against Russia and certain Russian entities and nationals. Such sanctions against Russia may adversely affect our business, financial condition, results of operation and cash flows. The ongoing conflict could result in the imposition of further economic sanctions against Russia, with uncertain impacts on the drybulk market and the world economy.

On October 7, 2023, the war between Israel and Hamas commenced, leading to hostilities in Israel and Gaza. The war is still ongoing. Regional militant groups, such as Hezbollah, have also launched attacks directed against Israel. There is widespread uncertainty about the degree of any increased escalation of the war, interventions by other groups or nations, and resulting instability in the Middle East. The impacts of the war on the global economy, including commodity pricing and the disruption of shipping routes, are also currently unknown. Following attacks on merchant vessels in the region of the Bab al-Mandab Strait and the Gulf of Aden at the southern end of the Red Sea, there is disruption in the maritime trade towards Mediterranean Sea through Suez-Canal. As a result we have diverted our fleet from sailing in the specific region. While our vessels currently do not sail in the Red Sea, we will continue to monitor the situation to assess whether the trade disruption could have any impact on our operations or financial performance. Any dramatic escalation of the trade disruptions could lead to increased operational costs incurred by our business, or otherwise harm our financial condition, results of operation and cash flows.

While our vessels do not currently sail in the Black Sea or the Red Sea, it is possible that the continued conflict in Ukraine and the Middle East, including any effect on our ability to pay the wages of crew members or consultants who may hold accounts at Russian banks that are subjected to sanctions, any increased shipping costs, disruptions of global shipping routes, any impact on the global supply chain and any impact on current or potential customers caused by the events in Russia and Ukraine, Israel and the Middle East, could adversely affect our operations or financial performance. Due to the recent nature of these activities, the full impact on our business is not yet known.

Item 6.	Directors, Senior Management and Employees
A.	Directors and Senior Management
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The following sets forth the name and position of each of our directors and executive officers.

Name	Age	Position
Aristides J. Pittas	64	Chairman, President and CEO; Class C Director
Dr. Anastasios Aslidis	64	CFO and Treasurer; Class C Director
Aristides P. Pittas	72	Vice Chairman; Class C Director
Stephania Karmiri	56	Secretary
Panagiotis Kyriakopoulos	63	Class A Director
George Taniskidis	63	Class B Director
Apostolos Tamvakakis	66	Class B Director

Aristides J. Pittas has been a member of the Board of Directors and Chairman and Chief Executive Officer of EuroDry since its inception on January 8, 2018. He is also member of the Board of Directors and Chairman and Chief Executive Officer of Euroseas since its inception on May 5, 2005. Since 1997, Mr. Pittas has also been the President of Eurochart, our affiliate. Eurochart is a shipbroking company specializing in chartering and selling and purchasing ships. Since January 1995, Mr. Pittas has been the President and Managing Director of Eurobulk, our affiliated ship management company. He resigned as Managing Director of Eurobulk in June 2005. Eurobulk is a ship management company that provides ocean transportation services. From September 1991 to December 1994, Mr. Pittas was the Vice President of Oceanbulk Maritime SA, a ship management company. From March 1990 to August 1991, Mr. Pittas served both as the Assistant to the General Manager and the Head of the Planning Department of Varnima International SA, a shipping company operating tanker vessels. From June 1987 until February 1990, Mr. Pittas was the head of the Central Planning department of Eleusis Shipyards S.A. From January 1987 to June 1987, Mr. Pittas served as Assistant to the General Manager of Chios Navigation Shipping Company in London, a company that provides ship management services. From December 1985 to January 1987, Mr. Pittas worked in the design department of Eleusis Shipyards S.A. where he focused on shipbuilding and ship repair. Mr. Pittas has a B.Sc. in Marine Engineering from University of Newcastle-Upon-Tyne and a MSc in both Ocean Systems Management and Naval Architecture and Marine Engineering from the Massachusetts Institute of Technology.

Dr. Anastasios Aslidis has been the Chief Financial Officer and Treasurer and a member of the Board of Directors of EuroDry since May 5, 2018. He is also member of the Board of Directors, Treasurer and Chief Financial Officer of Euroseas since September 2005, a member of the Board of Directors and chairman of the Audit Committee of Cosmos Health Inc. and a member of the Board of Directors of Vianair Inc. Prior to joining Euroseas, Dr. Aslidis was a partner at Marsoft Inc., an international consulting firm focusing on investment and risk management in the maritime industry. Dr. Aslidis has more than 30 years of experience in the maritime industry. He also served as consultant to the Boards of Directors of shipping companies (public and private) advising on strategy development, asset selection and investment timing. Dr. Aslidis holds a Ph.D. in Ocean Systems Management (1989) from the Massachusetts Institute of Technology, M.S. in Operations Research (1987) and M.S. in Ocean Systems Management (1984) also from the Massachusetts Institute of Technology, and a Diploma in Naval Architecture and Marine Engineering from the National Technical University of Athens (1983).

Aristides P. Pittas has been a member of EuroDry's Board of Directors and Vice Chairman of the Board of EuroDry since its inception on January 8, 2018. He is also member of the Board of Directors of Euroseas since its inception on May 5, 2005 and its Vice Chairman since September 1, 2005. Mr. Pittas has been a shareholder in over 100 oceangoing vessels during the last 20 years. Since February 1989, Mr. Pittas has been the Vice President of Oceanbulk Maritime SA, a ship management company. From November 1987 to February 1989, Mr. Pittas was employed in the supply department of Drytank SA, a shipping company. From November 1981 to June 1985, Mr. Pittas was employed at Trust Marine Enterprises, a brokerage house as a sale and purchase broker. From September 1979 to November 1981, Mr. Pittas worked at Gourdomichalis Maritime SA in the operation and Freight Collection department. Mr. Pittas has a B.Sc in Economics from Athens School of Economics.

Stephania Karmiri has been a member of the Board of Directors of EuroDry since its inception on January 8, 2018 until May 5, 2018, and EuroDry's Secretary since May 5, 2018. She has also been Euroseas' Secretary since its inception on May 5, 2005. Since July 1995, Mrs. Karmiri has been executive secretary to Eurobulk, our affiliated ship management company. Eurobulk is a ship management company that provides ocean transportation services. At Eurobulk, Mrs. Karmiri has been responsible for dealing with sale and purchase transactions, vessel registrations/deletions, bank loans, supervision of office administration and office/vessel telecommunication. From May 1992 to June 1995, she was secretary to the technical department of Oceanbulk Maritime SA, a ship management company. From 1988 to 1992, Mrs. Karmiri served as assistant to brokers for Allied Shipbrokers, a company that provides shipbroking services to sale and purchase transactions. Mrs. Karmiri has taken assistant accountant and secretarial courses from Didacta college.

Panagiotis Kyriakopoulos has been a member of the Board of Directors of EuroDry since May 5, 2018. He has also been a member of the Board of Directors of Euroseas since its inception on May 5, 2005. Since July 2002, he has been the Chief Executive Officer of STAR INVESTMENTS S.A., one of the leading Mass Media Companies in Greece, running television and radio stations. From July 1997 to July 2002 he was the C.E.O. of the Hellenic Post Group, the Universal Postal Service Provider, having the largest retail network in Greece for postal and financial services products. From March 1996 until July 1997, Mr. Kyriakopoulos was the General Manager of ATEMKE SA, one of the leading construction companies in Greece listed on the Athens Stock Exchange. From December 1986 to March 1996, he was the Managing Director of Globe Group of Companies, a group active in the areas of shipowning and management, textiles and food and distribution. The company was listed on the Athens Stock Exchange. From June 1983 to December 1986, Mr. Kyriakopoulos was an assistant to the Managing Director of Armada Marine S.A., a company active in international trading and shipping, owning and managing a fleet of twelve vessels. Presently he is Chairman of the Hellenic Private Television Owners Association, BoD member of the Hellenic Federation of Enterprises (SEV) and BoD member of Digea S.A. He has also been an investor in the shipping industry for more than 20 years. Mr. Kyriakopoulos has a B.Sc. degree in Marine Engineering from the University of Newcastle upon Tyne, a MSc. degree in Naval Architecture and Marine Engineering with specialization in Management from the Massachusetts Institute of Technology and a Master degree in Business Administration (MBA) from Imperial College, London.

George Taniskidis has been a member of the Board of Directors of EuroDry since May 5, 2018. He has also been a member of the Board of Directors of Euroseas since its inception on May 5, 2005. He is the Chairman of Optima Bank and Chairman of Core Capital Partners, a consulting firm specializing in debt restructuring. He was Chairman and Managing Director of Millennium Bank and a member of the Board of Directors of BankEuropa (subsidiary bank of Millennium Bank in Turkey) until May 2010. He was also a member of the Executive Committee and the Board of Directors of the Hellenic Banks Association. From 2003 until 2005, he was a member of the Board of Directors of Visa International Europe, elected by the Visa issuing banks of Cyprus, Malta, Portugal, Israel and Greece. From 1990 to 1998, Mr. Taniskidis worked at XIOSBANK (until its acquisition by Piraeus Bank in 1998) in various positions, with responsibility for the bank’s credit strategy and network. Mr. Taniskidis studied Law in the National University of Athens and in the University of Pennsylvania Law School, where he received a L.L.M. After law school, he joined the law firm of Rogers & Wells in New York, where he worked until 1989 and was also a member of the New York State Bar Association. He is also a member of the Young Presidents Organization.

Apostolos Tamvakakis has been a member of the Board of Directors of EuroDry since May 5, 2018. He has also been a member of the Board of Directors of Euroseas since June 25, 2013. From January 2015 to February 2017 he was independent non-executive Vice Chairman of the Board of Directors of Piraeus Bank. Since July 2012 he participated as a Member of the Board of Directors and Committees in various companies. From December 2009 to June 2012, Mr. Tamvakakis was appointed Chief Executive Officer of the National Bank of Greece. From May 2004 to March 2009, he served as Chairman and Managing Director of Lamda Development, a real estate development company of the Latsis Group and from March 2009 to December 2009, he served on the management team of the Geneva-based Latsis Group, as Head of Strategy and Business Development. From October 1998 to April 2004, he served as Deputy CEO of National Bank of Greece. Prior to that, he worked as Deputy Governor of National Mortgage Bank of Greece, as Deputy General Manager of ABN AMRO Bank, as Manager of Corporate Finance at Hellenic Investment Bank and as Planning Executive at Mobil Oil Hellas. He also served as Vice-Chairman of Athens Stock Exchange, Chairman of the Steering Committee of Interalpha Group of Banks, Chairman of Ethnokarta, National Securities, AVIS (Greece), ETEVA and the Southeastern European Board of the Europay Mastercard Group. Mr. Tamvakakis has also served in numerous boards of directors and committees. He is the Chairman and Managing Partner of EOS Capital Partners Alternative Investment Fund Manager, the investment manager of a private equity fund “EOS Hellenic Renaissance Fund”. He holds the positions of Vice Chairman of Gek Terna, Member of the BoD of Quest Holdings, Chairman of the Liquidations Committee of PQH Single Special Liquidation S.A. and member of the Marketing Commission of the Hellenic Olympic Committee. He is a graduate of the Athens University of Economics and has an M.A. in Economics from the Saskatchewan University in Canada with major in econometrics and economics.

Board Diversity Matrix

As a foreign private issuer listed on the Nasdaq Capital Market, we are required to disclose certain self-identified diversity characteristics about our Directors pursuant to Nasdaq board diversity and disclosure rules. The Board Diversity Matrix set forth below contains the requisite information as of the date of this annual report.

Board Diversity Matrix (As of March 31, 2024)
Country of Principal Executive Offices	Greece
---	---
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Law	No
Total Number of Directors	6
								Did Not
---	---	---	---	---	---	---	---	---
								Disclose
		Female		Male		Non-Binary		Gender
Part I: Gender Identity
Directors				6
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
LGBTQ+
Did Not Disclose Demographic Background				6

Family Relationships

Aristides P. Pittas, Vice Chairman, is the cousin of Aristides J. Pittas, our Chairman, President and CEO.

B.	Compensation

Executive Compensation

We have no direct employees. The services of our Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, Internal Auditor and Secretary are provided by Eurobulk. See Item 7 – “Major Shareholders and Related Party Transactions”.

Director Compensation

Our directors who are also our officers or have executive positions or beneficially own greater than 10% of the outstanding common shares receive no compensation for serving on our Board of Directors or its committees.

Directors who are not our officers, do not have any executive position or do not beneficially own greater than 10% of the outstanding common shares receive the following compensation: an annual retainer of $7,500, plus $1,875 for attending a quarterly meeting of the Board of Directors, plus an additional retainer of $3,750 if serving as Chairman of the Audit Committee. They also participate in the Company’s Equity Incentive Plan.

All directors are reimbursed reasonable out-of-pocket expenses incurred in attending meetings of our Board of Directors or any committee of our Board of Directors.

Equity Incentive Plan

In May 2018, our Board of Directors approved an equity incentive plan. The equity incentive plan was administered by the Board of Directors which could make awards totaling in aggregate up to 150,000 shares over five years after the equity incentive plan’s adoption date. In November 2022, our Board of Directors approved a new equity incentive plan in which the Board of Directors can make awards totaling in aggregate up to 200,000 shares over five years after the 2022 equity incentive plan’s adoption date. Officers, directors 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 are eligible to receive awards under the equity incentive plan. Awards may be made under the equity incentive plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, unrestricted stock, restricted stock units and performance shares.

On November 4, 2019, the Board of Directors awarded 24,710 shares of restricted stock to our directors, officers and key employees of Eurobulk, 50% of which vested on July 1, 2020 and the remainder vested on July 1, 2021.

On November 5, 2020, the Board of Directors awarded 44,900 shares of restricted stock to our directors, officers and key employees of Eurobulk, 50% of which vested on November 16, 2021, and the remainder vested on November 16, 2022. There were 1,314 shares that were forfeited due to employee termination.

On November 19, 2021, the Board of Directors awarded 49,650 shares of restricted stock to our directors, officers and key employees of Eurobulk, 50% of which vested on July 1, 2022, and the remainder vested on July 1, 2023. Vesting of the awards is conditioned on continuous employment throughout the period to the vesting date.

On November 3, 2022, the Board of Directors awarded 58,600 shares of restricted stock to our directors, officers and key employees of Eurobulk, 50% of which vested on November 16, 2023, and the remainder will vest on November 15, 2024. Vesting of the awards is conditioned on continuous employment throughout the period to the vesting date.

On November 10, 2023, the Board of Directors awarded 59,100 shares of restricted stock to our directors, officers and key employees of Eurobulk, 50% of which will vest on July 1, 2024, and the remainder will vest on July 1, 2025. Vesting of the awards is conditioned on continuous employment throughout the period to the vesting date.

C.	Board Practices

The current term of our Class A director expires in 2024, the current term of our Class B directors expires in 2025 and the current term of our Class C directors expires in 2026.

There are no service contracts between us and any of our directors providing for benefits upon termination of their employment or service.

Our Board of Directors does not have separate compensation or nomination committees, and instead, the entire Board of Directors performs those responsibilities.

Audit Committee

We currently have an Audit Committee comprised of three independent members of our Board of Directors. The Audit Committee is responsible for reviewing the Company’s accounting controls and the appointment of the Company’s outside auditors. The members of the Audit Committee are Mr. Panagiotis Kyriakopoulos (Chairman and “audit committee financial expert” as such term is defined under SEC regulations), Mr. Apostolos Tamvakakis and Mr. George Taniskidis.

Code of Ethics

We have adopted a code of ethics that complies with the applicable guidelines issued by the SEC. Our code of ethics is posted on our website: http://www.eurodry.gr under “Corporate Governance.”

Corporate Governance

Our Company’s corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands. We are exempt from many of Nasdaq’s corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq corporate governance practices, and the establishment and composition of an audit committee and a formal written audit committee charter. The practices that we follow in lieu of Nasdaq’s corporate governance rules are described below.

●	We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future.
●	In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers’ compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee.
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●	In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.
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●	In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his or her relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
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●	As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.
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●	In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.
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●	The Board of Directors adopted new Equity Incentive Plans in May 2018 and November 2022. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take such actions.
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●	As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers, or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company, or assets to be acquired, or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more.
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●	In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances.

Other than as noted above, we are in full compliance with all other applicable Nasdaq corporate governance standards.

D.	Employees

We have no salaried employees, although we pay Eurobulk for the services of our Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, Internal Auditor and Secretary: Mr. Aristides J. Pittas, Dr. Anastasios Aslidis, Mr. Symeon Pariaros, Mr. Konstantinos Siadimas and Ms. Stephania Karmiri, respectively. Eurobulk and Eurobulk FE also ensure that all seamen have the qualifications and licenses required to comply with international regulations and shipping conventions, and that all of our vessels employ experienced and competent personnel. As of December 31, 2023, 146 officers and 150 crew members served on board the vessels in our fleet.

E.	Share Ownership

With respect to the ownership of our common stock by each of our directors and executive officers, and all of our directors and executive officers as a group, see “Item 7. Major Shareholders and Related Party Transactions”.

All of the shares of our common stock have the same voting rights and are entitled to one vote per share.

Equity Incentive Plan

See Item 6.B of this annual report, “Compensation.”

Options

No options were granted during the fiscal year ended December 31, 2023. There are currently no options outstanding to acquire any of our shares.

Warrants

We do not currently have any outstanding warrants.

F.	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not Applicable.

Item 7.	Major Shareholders and Related Party Transactions
A.	Major Stockholders
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The following table sets forth certain information regarding the beneficial ownership of our voting stock as of March 31 2024 by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of our voting stock, each of our directors and executive officers, and all of our directors and executive officers and 5% owners as a group. All of our shareholders, including the shareholders listed in this table, are entitled to one vote for each share of common stock held.


Friends Dry Investment Company Inc.(2)	868,928	31.0	%
Family United Navigation Co (3)	297,943	10.6	%
Ergina Shipping Ltd.(4)	180,308	6.4	%
Aristides J Pittas(5)	110,633	3.9	%
Anastasios Aslidis (6)	30,800	1.1	%
Panagiotis Kyriakopoulos (7)	5,800	*
George Taniskidis (8)	5,621	*
Aristides P. Pittas (9)	12,970	*
Apostolos Tamvakakis (10)	4,600	*
Symeon Pariaros(11)	5,300	*
Konstantinos Siadimas(12)	4,600	*
Stephania Karmiri (13)	1,300	*
All directors and officers and 5% owners as a group	1,528,803	54.6	%

* Indicates less than 1.0%.

(1)	Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her.
(2)	Represents shares of common stock held of record by Friends Dry. A majority of the shareholders of Friends Dry are members of the Pittas family. Investment power and voting control by Friends Dry resides in its Board of Directors which consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends Dry may be taken by a majority of the members on its Board of Directors.
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(3)	Represents shares of common stock held of record by Family United Navigation Co. (“FUN”). A majority of the shareholders of FUN are members of the Pittas family. Investment power and voting control by FUN resides in its Board of Directors which consists of three directors, affiliated with the Pittas family. Actions by FUN may be taken by a majority of the members on its Board of Directors.
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(4)	Represents shares of common stock held of record by Ergina Shipping Ltd. Ergina Shipping Ltd. shares are fully owned by Aristides J. Pittas. Investment power and voting control by Ergina Shipping Ltd. resides in its Board of Directors which consists of three directors, affiliated with the Pittas family. Actions by Ergina Shipping Ltd. may be taken by a majority of the members on its Board of Directors.
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(5)	Does not include 242,755 shares of common stock held of record by Friends Dry and Ergina Shipping Ltd., by virtue of ownership interest in Friends Dry and Ergina Shipping Ltd. by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 5,500 shares vesting on July 1, 2024, 5,500 shares vesting on November 15, 2024 and 5,500 shares vesting on July 1, 2025.
(6)	Includes 3,750 shares vesting on July 1, 2024, 3,750 shares vesting on November 15, 2024 and 3,750 shares vesting on July 1, 2025.
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(7)	Includes 700 shares vesting on July 1, 2024, 700 shares vesting on November 15, 2024 and 700 shares vesting on July 1, 2025.
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(8)	Does not include 4,248 shares held of record by Friends Dry, by virtue of Mr. Taniskidis’ ownership in Friends Dry. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 700 shares vesting on July 1, 2024, 700 shares vesting on November 15, 2024 and 700 shares vesting on July 1, 2025.
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(9)	Does not include 118,508 shares of common stock held of record by Friends Dry and Family United Navigation Co., by virtue of ownership interest in Friends Dry and Family United Navigation Co. by Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 1,550 shares vesting on July 1, 2024, 1,550 shares vesting on November 15, 2024 and 1,550 shares vesting on July 1, 2025.
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(10)	Includes 700 shares vesting on July 1, 2024, 700 shares vesting on November 15, 2024 and 700 shares vesting on July 1, 2025.
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(11)	Includes 950 shares vesting on July 1, 2024, 950 shares vesting on November 15, 2024 and 950 shares vesting on July 1, 2025.
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(12)	Includes 700 shares vesting on July 1, 2024, 700 shares vesting on November 15, 2024 and 700 shares vesting on July 1, 2025.
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(13)	Includes 250 shares vesting on July 1, 2024, 250 shares vesting on November 15, 2024 and 250 shares vesting on July 1, 2025.
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(14)	Voting stock includes 88,400 unvested shares for a total of 2,801,625 issued and outstanding shares of the Company as of March 31, 2024.
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B.	Related Party Transactions
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The operations of our vessels are managed by Eurobulk and Eurobulk FE, both affiliated companies. Eurobulk was founded in 1994 by members of the Pittas family and is a reputable ship management company with strong industry relationships and experience in managing vessels. Eurobulk FE was founded in 2015 and is based in the Philippines. Eurobulk manages certain corporate matters and certain vessels of our fleet under a Master Management Agreement with us and separate management agreements with each shipowning company. Eurobulk FE manages six of our vessels under similar management agreements with the respective ship-owning companies.

Under our Master Management Agreement, Eurobulk is responsible for providing us with executive services associated with us being a public company. Under the separate management agreements with the shipowning companies, Eurobulk or Eurobulk FE are responsible for providing (i) other administration services to our subsidiaries and commercial management services, which include obtaining employment for our vessels and managing our relationships with charterers; and (ii) technical management services, which include managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification society compliance, supervising the maintenance and general efficiency of vessels, arranging our hire of qualified officers and crew, arranging and supervising drydocking and repairs, arranging insurance for vessels, purchasing stores, supplies, spares and new equipment for vessels, appointing supervisors and technical consultants and providing technical support and shoreside personnel who carry out the management functions described above and certain accounting services.

EuroDry signed new Master Management Agreements (“MMAs”) with the Managers which took effect after the completion of the Spin-off. Our Master Management Agreement with Eurobulk compensates Eurobulk with an annual executive compensation and a daily management fee per vessel managed. For the Company post Spin-off the annual compensation for such services was set at $1,250,000. This amount was $1,250,000 for each of 2021 and 2022. In 2023, this fee was increased to $1,350,000 to account for inflation.

The executive management fee will be adjusted annually for Eurozone inflation every January 1. Effective from January 1, 2024, this fee was increased to $1,400,000 to account for inflation. For 2021, 2022 and 2023 we also paid an additional special bonus of $460,000, $210,000 and $nil respectively, to Eurobulk’s employees, affiliated subcontractors and consultants. Our Master Management Agreement is substantially similar to the master management agreement between Euroseas and Eurobulk relating to our vessels that were previously owned by Euroseas. The Master Management Agreement is terminable by Eurobulk only for cause or under other limited circumstances, such as sale of the Company or Eurobulk or the bankruptcy of either party. The management agreements between Eurobulk FE and the ship-owning companies follow substantially the same terms of the similar agreements with Eurobulk.

The EuroDry Master Management Agreement ("MMA") with the Managers provides for an annual adjustment of the daily vessel management fee due to inflation in the Eurozone to take effect on January 1 of each year. The vessel management fee for laid-up vessels is half of the daily fee. This MMA, as periodically amended and restated, will automatically be extended after the initial five-year period for an additional five-year period unless terminated on or before the 90th day preceding the initial termination date. Pursuant to the MMA, each ship-owning company has signed – and each future ship owning company when a vessel is acquired will sign - with the Managers, a management agreement with the rate and term of these agreements set in the MMA effective at such time.

The MMA also provided for a 5% discount on the daily vessel management fee for the period during which the number of the Euroseas-owned vessels (including vessels in which Euroseas is a part owner) managed by the Managers is greater than 20 ("volume discount"). EuroDry signed new MMAs with the Managers which took effect after the completion of the Spin-off for an additional five-year term until May 30, 2023, on substantially the same terms as the MMA between Euroseas and Eurobulk relating to the vessels that were previously owned by Euroseas. The EuroDry MMAs permanently incorporated the volume discount in the daily vessel management fee, which was set at 685 Euros per day per vessel in operation, and 342.50 Euros per day per vessel in lay-up, to be adjusted annually for inflation in the Eurozone. The daily fixed vessel management fee remained unchanged at 685 Euros for the year ended December 31, 2021. From January 1, 2022 the daily vessel management fee was adjusted for inflation to 720 Euros per day per vessel in operation and 360 Euros per day per vessel in lay-up. From January 1, 2023 the daily vessel management fee was adjusted for inflation at 775 Euros (approximately $853, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in operation and 387.5 Euros (approximately $426, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in lay-up and the MMA was extended for a further five-year term until January 1, 2028. Vessel management fees paid to the Managers amounted to $2,350,747, $2,968,073 and $3,281,361 in 2021, 2022 and 2023, respectively. From January 1, 2024, the vessel fixed management fee was adjusted for inflation at Euro 810 (approximately $891, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in operation and Euro 405 (approximately $446, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in lay-up.

The management of the M/V “Xenia”, M/V “Alexandros P.”, M/V “Tasos”, M/V “Ekaterini”, M/V “Maria” and M/V “Christos K” is performed by Eurobulk FE, which provides technical, commercial and accounting services. The remaining fleet (M/V “Santa Cruz”, M/V “Eirini P.”, M/V “Good Heart”, M/V “Blessed Luck”, M/V “Molyvos Luck”, M/V “Starlight” and M/V “Yannis Pittas”) is managed by Eurobulk.

We receive chartering and sale and purchase services from Eurochart, an affiliate, and pay a commission of 1.25% on charter revenue and 1% on vessel sale price. During 2021, 2022 and 2023 Eurochart received $856,334, $932,123 and $630,433, respectively, for chartering services calculated at 1.25% of chartering revenues. Eurochart also receives 1% commission of the acquisition price from the seller of the vessel for the vessels we acquire. During 2021, we paid to Eurochart commissions of $365,000 for the acquisitions of M/V “Blessed Luck” and M/V “Good Heart”, which were agreed to be paid by the buyers, as per the relevant memoranda of agreement entered into with the sellers. During 2022, we paid to Eurochart a commission of $210,000 for the acquisition of M/V “Molyvos Luck” and we withheld, on behalf of Eurochart, a commission of $157,500 from the sellers of M/V “Santa Cruz”. We also paid to Eurochart a commission of $96,750 for the sale of M/V “Pantelis”. In October and November 2023, we withheld on behalf of Eurochart the amount of $650,000 from the sellers of M/V “Maria”, M/V “Christos K” and M/V “Yannis Pittas” in connection with the acquisition of the vessels.

Technomar S.A., a crewing agent, and Sentinel Marine Services Inc., an insurance brokering company are affiliates to whom we pay a fee of about $50 per crew member per month and a commission on premium not exceeding 5%, respectively.

On May 10, 2021, we reached an agreement with a related party and beneficial owner, Ergina Shipping Ltd. (“Ergina”), a company controlled by the Pittas family and affiliated with the Company’s Chief Executive Officer, to draw a loan of $6.0 million, which was used by us to partly finance the acquisition of M/V “Blessed Luck”. The loan was set to mature on May 31, 2022. The interest rate applied was 8% per annum. Interest on the loan was payable quarterly. Within 2021 we paid $0.08 million for interest. On June 4, 2021, Ergina exercised its right to convert part of the outstanding balance of the loan, amounting to $3.3 million, into the Company’s common shares as per the terms of the loan agreement. As a result, on June 4, 2021, we issued 180,308 shares to Ergina. The conversion price was the lowest closing price over the fifteen business days prior to the conversion notice as per the terms of the loan, amounting to approximately $18.30 per share. We incurred a loss on the extinguishment of the above debt of $1.6 million, deriving from the difference between the conversion price and the closing price of the Company’s common shares on the Nasdaq Capital Market on the date of issuance of approximately $27.44 per share. The remaining amount of $2.7 million was repaid earlier than scheduled on September 29, 2021. On April 11, 2023, the share ownership of Ergina was fully transferred to Aristides J. Pittas.

On October 13, 2023, Christos Ultra LP and Maria Ultra LP, owners of M/V Christos K and M/V Maria, respectively, entered into a Mandate Agreement with EuroDry, Eurobulk Ltd. and the NRP Investors, pursuant to which the two entities paid to Eurobulk a lumpsum fee of $110,000 for its assistance to secure the financing from Eurobank S.A., being the equivalent of 0.50% of the total facility amount provided by the bank. Additionally, on the same date, Christos Ultra LP and Maria Ultra LP, signed with Eurobulk Ltd. an administration contract under which Eurobulk Ltd. will receive an amount of $15,000 per business year in order to provide various accounting and business transactions.

Aristides J. Pittas is currently the Chairman of each of Eurochart and Eurobulk, all of which are our affiliates.

We have entered into a registration rights agreement with Friends Investment Company Inc. (“Friends”), which registration rights were transferred to Friends Dry, our largest shareholder, pursuant to which we granted Friends Dry the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of our common stock held by Friends Dry. Under the registration rights agreement, Friends Dry has the right to request us to register the sale of shares held by it on its behalf and may require us to make available shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition, Friends Dry has the ability to exercise certain piggyback registration rights in connection with registered offerings initiated by us.

Eurobulk, Eurobulk FE, Friends and Aristides J. Pittas, our Chairman and Chief Executive Officer, have granted us a right of first refusal to acquire any drybulk vessel or containership which any of them may consider for acquisition in the future. In addition, Mr. Pittas has granted us a right of first refusal to accept any chartering out opportunity for a drybulk vessel which may be suitable for any of our vessels, provided that we have a suitable vessel, properly situated and available, to take advantage of the chartering out opportunity. Mr. Pittas has also agreed to use his best efforts to cause any entity he directly or indirectly controls to grant us this right of first refusal.

C.	Interests of Experts and Counsel

Not Applicable.

Item 8.	Financial Information
A.	Consolidated Statements and Other Financial Information
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See Item 18.

Legal Proceedings

To our knowledge, there are no material legal proceedings to which we are a party or to which any of our properties are subject, other than routine litigation incidental to our business. In our opinion, the disposition of these lawsuits should not have a material impact on our consolidated results of operations, financial position and cash flows.

Dividend Policy

Thus far we have not paid a dividend to our common shareholders. The exact timing and amount of any future dividend payments to our common stock will be determined by our Board of Directors and will be dependent upon our earnings, financial condition, cash requirement and availability, restrictions in its loan agreements, growth strategy, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors, such as the acquisition of additional vessels.

The payment of dividends to our common stock is not guaranteed or assured, and may again be discontinued at any time at the discretion of our Board of Directors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of these subsidiaries and their ability to pay dividends to us. If there is a substantial decline in the drybulk charter market, our earnings would be negatively affected, thus limiting our ability to pay dividends. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividends. Dividends may be declared in conformity with applicable law by, and at the discretion of, our Board of Directors at any regular or special meeting. Dividends may be declared and paid in cash, stock or other property of the Company.

The Series B Preferred Shares paid dividends in-kind until January 29, 2019 at a rate of 5% per annum. From January 29, 2019 to January 29, 2021, the dividend rate on the Series B Preferred Shares was set to increase to 12% per annum and to 14% per annum thereafter and the related dividends would be payable in cash. On June 18, 2019, the Board of Directors agreed to redeem approximately $4.3 million of the Series B Preferred Shares with a simultaneous reduction of the dividend rate to 9.25% per annum until January 29, 2021, after which it would increase to 14% per annum, payable in cash. On April 1, 2020, we agreed with the holders of the Series B Preferred Shares to have the option to pay the preferred dividend in-kind at an annual rate of 10.25%, instead of in cash at an annual rate of 9.25%, with effect from April 1, 2020 until January 29, 2021.

On January 29, 2021, the Board of Directors agreed to redeem a net amount of $3 million of the Series B Preferred Shares with a simultaneous reduction of the dividend rate to 8% per annum if paid in cash and 9% if paid in-kind at the Company’s option until January 29, 2023, after which date the dividend rate would reset to 14% and would be payable in cash. On December 16, 2021, the Board of Directors agreed to redeem all $13.61 million outstanding Series B Preferred Shares. The Company declared $1.09 million of dividends on its Series B Preferred Shares during 2021, which were paid in cash and $1.57 million in dividends on its Series B Preferred Shares during 2020, of which $0.35 million were paid in cash and another $1.22 million were paid in-kind. In addition, $0.67 million of preferred deemed dividends were recorded in 2021 as a result of the redemption of $3.0 million and $13.61 million of the Series B Preferred Shares in January and December 2021, respectively, representing the difference between (1) the fair value of the consideration transferred to the holders of the EuroDry Series B Preferred Shares (comprising the cash payment offered) and (2) the carrying amount of the Series B Preferred Shares before the redemption (net of issuance costs).

B.	Significant Changes

There have been no significant changes since the date of the annual consolidated financial statements included in this annual report, other than those described in Note 17 “Subsequent events” of our annual consolidated financial statements.

Item 9.	The Offer and Listing
A.	Offer and Listing Details
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The trading market for shares of our common stock is the Nasdaq Capital Market, on which our shares have traded under the symbol "EDRY" since May 31, 2018.

B.	Plan of Distribution

Not Applicable.

C.	Markets

The trading market for shares of our common stock is the Nasdaq Capital Market, on which our shares have traded under the symbol "EDRY" since May 31, 2018. Our shares began trading on the Nasdaq Global Market on May 24, 2018 under the symbol “EDRYV" and continued through the close of trading on May 30, 2018. Beginning on May 31, 2018, "when-issued" trading under the symbol “EDRYV" ended and EuroDry Ltd. begun "regular-way" trading on the NASDAQ under the symbol “EDRY".

D.	Selling Shareholders

Not Applicable.

E.	Dilution

Not Applicable.

F.	Expenses of the Issue

Not Applicable.

Item 10.	Additional Information
A.	Share Capital
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Not Applicable.

B.	Memorandum and Articles of Association

Amended and Restated Articles of Incorporation and Bylaws, as amended

Our current amended and restated articles of incorporation are filed with the SEC as Exhibit 1.1 (Amended and Restated Articles of Incorporation) to this Annual Report on Form 20-F, and our current bylaws, as amended, are filed with the SEC as Exhibit 1.2 (Amended and Restated Bylaws) to this Annual Report on Form 20-F.

Purpose

Our purpose, as stated in our amended and restated articles of incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Business Corporations Act of the Marshall Islands, or the BCA.

Authorized Capitalization

Under our amended and restated articles of incorporation, our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share and 20,000,000 shares of preferred stock par value $0.01 per share. All of our shares of stock are in registered form.

Common Stock

As of December 31, 2023 and March 31, 2024, there were 2,832,417 and 2,801,625 common shares issued and outstanding as of December 31, 2023 and March 31, 2024, respectively. Each outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders. Holders of our common stock (i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Board of Directors; (ii) are entitled to share ratably in all of our assets available for distribution upon liquidation, dissolution or winding up; and (iii) do not have preemptive, subscription or conversion rights or redemption or sinking fund provisions. All issued shares of our common stock when issued will be fully paid for and non-assessable.

Preferred Stock

As of December 31, 2023 and March 31, 2024, there are no preferred shares issued and outstanding.

Directors

Our directors are elected by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election. Cumulative voting may not be used to elect directors.

Our Board of Directors must consist of at least three directors, such number to be determined by the Board of Directors by a majority vote of the entire Board of Directors from time to time. Shareholders may change the number of our directors only by an affirmative vote of the holders of the majority of the outstanding shares of capital stock entitled to vote generally in the election of directors.

Our Board of Directors is divided into three classes as set out below in “Classified Board of Directors.” Each director is elected to serve until the third succeeding annual meeting after his election and until his successor shall have been elected and qualified, except in the event of his death, resignation or removal.

Shareholder Meetings

Under our bylaws, as amended, annual shareholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called at any time by the Board of Directors, the Chairman of the Board or by the President. Notice of every annual and special meeting of shareholders must be given to each shareholder of record entitled to vote at least 15 but no more than 60 days before such meeting.

Dissenters’ Rights of Appraisal and Payment

Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or consolidation or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any further amendment of our amended and restated articles of incorporation, a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which the Company’s shares are primarily traded on a local or national securities exchange.

Shareholders Derivative Actions

Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Limitations on Liability and Indemnification of Officers and Directors

The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their shareholders for monetary damages for breaches of directors’ fiduciary duties. Our bylaws, as amended, include a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent permitted by law.

Our bylaws, as amended, provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly authorized to carry directors’ and officers’ insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability and indemnification provisions in our bylaws, as amended, may discourage shareholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-takeover Effect of Certain Provisions of our Amended and Restated Articles of Incorporation and Bylaws, as Amended

Several provisions of our amended and restated articles of incorporation and bylaws, as amended, which are summarized below, may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change in control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank Check Preferred Stock

Under the terms of our amended and restated articles of incorporation, our Board of Directors has authority, without any further vote or action by our shareholders, to issue up to 20,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change in control of our company or the removal of our management.

Classified Board of Directors

Our amended and restated articles of incorporation provide for the division of our Board of Directors into three classes of directors, with each class as nearly equal in number as possible, serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of us. It could also delay shareholders who do not agree with the policies of our Board of Directors from removing a majority of our Board of Directors for two years.

Election and Removal of Directors

Our amended and restated articles of incorporation prohibit cumulative voting in the election of directors. Our bylaws, as amended, require parties other than the Board of Directors to give advance written notice of nominations for the election of directors. Our bylaws, as amended, also provide that our directors may be removed only for cause and by either action of the Board of Directors or the holders of 51% of the issued and outstanding voting shares of the Company. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited Actions by Shareholders

Our amended and restated articles of incorporation and our bylaws, as amended, provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders. Our amended and restated articles of incorporation and our bylaws, as amended, provide that, subject to certain exceptions, our Board of Directors, our Chairman of the Board or by the President and the business transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, a shareholder may not call a special meeting and shareholder consideration of a proposal may be delayed until the next annual meeting.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our bylaws, as amended, provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one-year anniversary of the immediately preceding annual meeting of shareholders. Our bylaws, as amended, also specify requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Certain Business Combinations

Our amended and restated articles of incorporation also prohibit us, subject to several exclusions, from engaging in any “business combination” with any interested shareholder for a period of three years following the date the shareholder became an interested shareholder.

Shareholders’ Rights Plan

We adopted a shareholders’ rights plan on May 5, 2018. Each right entitles the registered holder, upon the occurrence of certain events, to purchase from us one-thousandth of a share of Series A Participating Preferred Stock at an exercise price of $26, subject to adjustment. The rights will expire on the earliest of (i) May 30, 2028 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 the company. We believe that the shareholders' 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 we adopted the plan as a matter of prudent corporate governance. A copy of the plan is filed as Exhibit 2.4 to this Annual Report on Form 20-F.

C.	Material Contracts

We have a number of credit facilities with commercial banks. For a discussion of our facilities, please see the section of this annual report entitled “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Financing”

and Note 7 of our attached financial statements.

We are a party to a registration rights agreement with Friends, which was transferred to Friends Dry. For a discussion of these agreements, please see the section of this annual report entitled “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

There are no other material contracts, other than contracts entered into in the ordinary course of business, to which the Company or any of its subsidiaries is a party.

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 shares.

E.	Taxation

The following is a discussion of the material Marshall Islands, Liberian and United States federal income tax considerations applicable to us and U.S. Holders and Non-U.S. Holders, each as discussed below, of our common stock.

Marshall Islands Tax Considerations

We are incorporated in 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 holders of our common stock that are not residents or domiciled or carrying any commercial activity in the Marshall Islands. The holders of our common stock will not be subject to Marshall Islands tax on the sale or other disposition of such common stock.

Liberian Tax Considerations

Certain of our subsidiaries are incorporated in the Republic of Liberia. Under the Consolidated Tax Amendments Act of 2010, our Liberian subsidiaries will be deemed non-resident Liberian corporations wholly exempted from Liberian taxation effective as of 1977, and distributions we make to our shareholders will be made free of any Liberian withholding tax.

United States Federal Income Tax

The following are the material United States federal income tax consequences to us of our activities and to U.S. Holders and Non-U.S. Holders, each as defined below, of our common stock. The following discussion of United States federal income tax matters is based on the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, or the Treasury Regulations, all as of the date of this Annual Report, and all of which are subject to change, possibly with retroactive effect. This discussion is also based in part upon Treasury Regulations promulgated under Section 883 of the Code. The discussion below is based, in part, on the description of our business as described in “Business” above and assumes that we conduct our business as described in that section. References in the following discussion to “we” and “us” are to EuroDry and its subsidiaries on a consolidated basis.

United States Federal Income Taxation of Our Company

Taxation of Operating Income: In General

Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement, code sharing arrangement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States exclusive of certain U.S. territories and possessions constitutes income from sources within the United States, which we refer to as “U.S.-source shipping income.”

Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within 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-United States 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 United States federal income tax.

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

Exemption of Operating Income from United States Federal Income Taxation

Under Section 883 of the Code and the Treasury Regulations thereunder, we will be exempt from United States federal income taxation on our U.S.-source shipping income if:

●	we are organized in a foreign country, or our country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and

either

●	more than 50% of the value of our stock is owned, directly or indirectly, by “qualified shareholders,” individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or
●	our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”
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The Marshall Islands and Liberia, the jurisdictions where we and our shipowning subsidiaries were incorporated during 2023, each grants an “equivalent exemption” to United States corporations. Therefore, we will be exempt from United States 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 do not believe that we can establish that we satisfied the 50% Ownership Test for the 2023 taxable year due to the widely-held nature of our stock.

The Treasury Regulations provide, in pertinent part, that the stock of a foreign corporation will be considered to be "primarily traded" on an established securities market in a country if the number of shares of each class of stock that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any other single country. Our common stock is "primarily traded" on the Nasdaq Capital Market, which is an established securities market for these purposes.

The Treasury Regulations also require that our stock be "regularly traded" on an established securities market. Under the Treasury Regulations, our stock will be considered to be "regularly traded" if one or more classes of our stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets, which we refer to as the "listing threshold." We intend to take the position that our common stock, which is listed on the Nasdaq Capital Market constituted more than 50% of our outstanding shares by value and total combined voting power for the 2023 taxable year. Accordingly, we intend to take the position that we satisfied the listing threshold for the 2023 taxable year. However, it is possible that our common stock may come to constitute 50% or less of our outstanding shares by value in a future taxable year in which case we may not be able to satisfy the listing threshold or the Publicly Traded Test.

Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of shares will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified share attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of such class of stock, to which we refer as the “Five Percent Override Rule.”

For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and value of our common stock, or “5% Shareholders,” the regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as owning 5% or more of our common stock. The regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes. In the event the Five Percent Override Rule is triggered, the regulations provide that the Five Percent Override Rule will nevertheless not apply if we can establish that within the group of 5% Shareholders, there are sufficient qualified shareholders for purposes of Section 883 to preclude non-qualified shareholders in such group from owning 50% or more of our common stock for more than half the number of days during the taxable year.

We believe that we were not subject to the Five Percent Override Rule and that we satisfied the Publicly-Traded Test for the 2023 taxable year because the nonqualified 5% Shareholders did not own more than 50% of our common stock for more than half of the days during the taxable year. We intend to take this position on our 2023 United States federal income tax returns.

Taxation in Absence of Exemption

To the extent the benefits of Section 883 are unavailable for any taxable year, our U.S.-source shipping income, to the extent not considered to be “effectively connected” with the conduct of a United States 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 is treated as being derived from United States sources, the maximum effective rate of United States federal income tax on our shipping income will not exceed 2% under the 4% gross basis tax regime.

To the extent the benefits of the Section 883 of the Code are unavailable and our U.S.-source shipping income is considered to be “effectively connected” with the conduct of a United States trade or business, as described below, any such “effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the United States federal corporate income tax currently imposed at a rate of 21%. In addition, we may be subject to the 30% United States federal “branch profits” taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such United States trade or business.

Our U.S.-source shipping income would be considered “effectively connected” with the conduct of a United States 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.
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We do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, we do not anticipate that any of our U.S.-source shipping income will be “effectively connected” with the conduct of a U.S. trade or business.

United States Taxation of Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

United States Federal Income Taxation of U.S. Holders

As used herein, the term “U.S. Holder” means a beneficial owner of common stock that is a United States citizen or resident, United States corporation or other United States entity taxable as a corporation, an estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes.

This discussion does not purport to deal with the tax consequences of owning common stock to all categories of investors, some of which, such as dealers in securities, investors whose functional currency is not the United States dollar, persons subject to an alternative minimum tax, persons subject to the “base erosion and anti-avoidance” tax, persons required to recognize income for United States federal income tax purposes no later than when such income is reported on an “applicable financial statement” and investors that own, actually or under applicable constructive ownership rules, 10% or more of our common stock, may be subject to special rules. This discussion deals only with holders who hold the common stock as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under United States federal, state, local or foreign law of the ownership of common stock. This discussion does not address the tax consequences of owning our preferred stock.

If a partnership holds our common stock, 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 stock, you are encouraged to consult your tax advisor.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common stock 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 United States 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 his common stock on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United States corporation, U.S. Holders that are corporations generally will not be entitled to claim a dividend received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common stock 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 United States foreign tax credit purposes.

Dividends paid on our common stock 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 Holders at preferential tax rates provided that (1) we are not a passive foreign investment company 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) our common stock is readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market, on which our common stock is listed), (3) the U.S. Individual Holder has owned the common stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock becomes ex-dividend, and (4) the U.S. Individual Holder is not under an obligation (whether pursuant to a short sale or otherwise) to make payments with respect to positions in similar or related property. There is no assurance that any dividends paid on our common stock will be eligible for these preferential rates in the hands of a U.S. Individual Holder. Dividends paid on our stock prior to the date on which our common stock became listed on the Nasdaq Capital Market were not eligible for these preferential rates. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Individual Holder.

Special rules may apply to any “extraordinary dividend” generally, a dividend paid by us in an amount which is equal to or in excess of ten percent of a shareholder’s adjusted tax basis (or fair market value in certain circumstances) in a share of our common stock. If we pay an “extraordinary dividend” on our common stock that is treated as “qualified dividend income,” then any loss derived by a U.S. Individual Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Common Stock

Assuming we do not constitute a passive foreign investment company 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 stock in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such stock. Such gain or loss will generally be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for United States foreign tax credit purposes. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Status and Significant Tax Consequences

Special United States federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a passive foreign investment company, or PFIC, for United States 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 holder held our common stock, either:

●	at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
●	at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as “passive assets”.
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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 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 and majority-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 and majority-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and United States 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, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Moreover, 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, there can be no assurance that the nature of our operations will not change in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year which included a U.S. Holder’s holding period in our common stock, then such U.S. Holder would be subject to different United States federal income 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 should be able to make a “mark-to-market” election with respect to our common stock, as discussed below. In addition, if we were to be treated as a PFIC, a U.S. Holder of our common stock would be required to file annual information returns with the IRS.

In addition, if a U.S. Holder owns our common stock and we are a PFIC, such U.S. Holder must generally file IRS Form 8621 with the IRS.

U.S. Holders Making a Timely QEF Election

A U.S. Holder who makes a timely QEF election with respect to our common stock, or an Electing Holder, would report for United States federal income tax purposes his pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder. Our net operating losses or net capital losses would not pass through to the Electing Holder and will not offset our ordinary earnings or net capital gain reportable to the Electing Holder in subsequent years (although such losses would ultimately reduce the gain, or increase the loss, if any, recognized by the Electing Holder on the sale of his common stock). Distributions received from us by an Electing Holder are excluded from the Electing Holder’s gross income to the extent of the Electing Holder’s prior inclusions of our ordinary earnings and net capital gain. The Electing Holder’s tax basis in his common stock would be increased by any amount included in the Electing Holder’s income. Distributions received by an Electing Holder, which are not includible in income because they have been previously taxed, would decrease the Electing Holder’s tax basis in the common stock. An Electing Holder would generally recognize capital gain or loss on the sale or exchange of common stock.

U.S. Holders Making a Timely Mark-to-Market Election

A U.S. Holder who makes a timely mark-to-market election with respect to our common stock would include annually in the U.S. Holder’s income, as ordinary income, any excess of the fair market value of the common stock at the close of the taxable year over the U.S. Holder’s then adjusted tax basis in the common stock. The excess, if any, of the U.S. Holder’s adjusted tax basis at the close of the taxable year over the then fair market value of the common stock would be deductible in an amount equal to the lesser of the amount of the excess or the net mark-to-market gains that the U.S. Holder included in income in previous years with respect to the common stock. A U.S. Holder’s tax basis in his common stock would be adjusted to reflect any income or loss amount recognized pursuant to the mark-to-market election. A U.S. Holder would recognize ordinary income or loss on a sale, exchange or other disposition of the common stock; provided, however, that any ordinary loss on the sale, exchange or other disposition may not exceed the net mark-to-market gains that the U.S. Holder included in income in previous years with respect to the common stock.

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

A U.S. Holder who does not make a timely QEF Election or a timely mark-to-market election, which we refer to as a “Non-Electing Holder”, would be subject to special rules with respect to (i) any “excess distribution” (generally, the portion of any distributions received by the Non-Electing Holder on the common stock in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common stock), and (ii) any gain realized on the sale or other disposition of the common stock. Under these rules, (i) the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s holding period for the common stock; (ii) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, would be taxed as ordinary income; and (iii) the amount allocated to each of the other prior taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. If a Non-Electing Holder dies while owning the common stock, the Non-Electing Holder’s successor would be ineligible to receive a step-up in the tax basis of that common stock.

United States Federal Income Taxation of “Non-U.S. Holders”

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

Dividends on Common Stock

Non-U.S. Holders generally will not be subject to United States federal income tax or withholding tax on dividends received from us with respect to our common stock, unless that income 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 United States income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Common Stock

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

●	such 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 United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
●	the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
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If the Non-U.S. Holder is engaged in a United States trade or business for United States federal income tax purposes, the income from the common stock, including dividends and the gain from the sale, exchange or other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, its earnings and profits that are attributable to the effectively connected income, subject to certain adjustments, may be subject to an additional United States federal “branch profits” tax at a rate of 30%, or at a lower rate as may be specified by an applicable United States income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. Such payments will also be subject to backup withholding tax if a U.S. Individual Holder:

●	fails to provide an accurate taxpayer identification number;
●	is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
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●	in certain circumstances, fails to comply with applicable certification requirements.
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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 our common stock to or through a United States office of a broker, the payment of the proceeds is subject to both United States backup withholding and information reporting unless the shareholder certifies that it is a non-U.S. person, under penalties of perjury, or the shareholder otherwise establishes an exemption. If a shareholder sells our common stock through a non-United States office of a non-United States broker and the sales proceeds are paid outside the United States then information reporting and backup withholding generally will not apply to that payment. However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if a shareholder sells our common stock through a non-United States office of a broker that is a United States person or has some other contacts with the United States.

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

Individuals who are U.S. Holders (and to the extent specified in the applicable Treasury Regulations, certain individuals who are Non-U.S. Holders and certain United States entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code and the applicable Treasury Regulations) are required to file IRS Form 8938 (Statement of Specified Foreign Financial Assets) with information relating to each such 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. Specified foreign financial assets would include, among other assets, our common stock, unless the common stock were held through an account maintained with a United States 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, the statute of limitations on the assessment and collection of United States federal income tax with respect to a taxable year for which the filing of IRS Form 8938 is required may not close until three years after the date on which IRS Form 8938 is filed. U.S. Holders (including United States entities) and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under Section 6038D of the Code.

Changes in Global Tax Laws

Long-standing international tax initiatives that determine each country’s jurisdiction to tax cross-border international trade and profits are evolving as a result of, among other things, initiatives such as the Anti-Tax Avoidance Directives, as well as the Base Erosion and Profit Shifting reporting requirements, mandated and/or recommended by the EU, G8, G20 and Organization for Economic Cooperation and Development, including the imposition of a minimum global effective tax rate for multinational businesses regardless of the jurisdiction of operation and where profits are generated (Pillar Two). As these and other tax laws and related regulations change (including changes in the interpretation, approach and guidance of tax authorities), our financial results could be materially impacted. Given the unpredictability of these possible changes and their potential interdependency, it is difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive or negative for our earnings and cash flow, but such changes could adversely affect our financial results.

On December 12, 2022, the European Union member states agreed to implement the OECD’s Pillar Two global corporate minimum tax rate of 15% on companies with revenues of at least €750 million effective from 2024. Various countries have either adopted implementing legislation or are in the process of drafting such legislation. Any new tax law in a jurisdiction where we conduct business or pay tax could have a negative effect on our company.

We encourage each shareholder to consult with his, her or its own tax advisor as to particular tax consequences to it of holding and disposing of our common stock, 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.

100

I.	Subsidiary Information

Not Applicable.

J.	Annual Report to Security Holders

Not Applicable.

Item 11.	Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we face risks that are non-financial or non-quantifiable. Such risks principally include country risk, credit risk and legal risk. Our operations may be affected from time to time in varying degrees by these risks but their overall effect on us is not predictable. We have identified the following market risks as those which may have the greatest impact upon our operations:

Freight Derivatives

From time to time, we take positions in freight derivatives, mainly through FFAs. Generally, freight derivatives may be used to hedge a vessel owner’s exposure to the charter market for a specified route and period of time. If we take positions in freight derivatives we could suffer losses in the settling or termination of these agreements. This could adversely affect our results of operations and cash flow.

During the years ended December 31, 2022 and 2023, we entered into a number of FFAs on the Panamax and Supramax indices. We use the freight derivatives as an economic hedge for our vessels that are being chartered in the spot market or short-term time charter market, effectively locking-in an approximate amount of revenue that we expect to receive from such vessels’ relevant periods. Customary requirements for trading in FFAs include the maintenance of initial and variation margins based on expected volatility and the valuation of the open position under such contracts. Our freight derivatives do not qualify as cash flow hedges for accounting purposes and therefore gains or losses are recognized in the consolidated statements of operations. Freight derivatives are treated as assets/liabilities until they are settled.

As of December 31, 2022, the fair value of our outstanding freight derivatives was a receivable of $0.04 million and as of December 31, 2023, the fair value of our outstanding freight derivatives was a payable of $1.29 million. A change in the daily forward rates of $1,000 would increase our derivative liability by 0.27 million in the Company’s consolidated balance sheet as of December 31, 2023. In 2022 and 2023, we recorded a net gain on our freight derivatives of $1.1 million and $1.2 million, respectively.

101

Interest Rate Fluctuation Risk

The international drybulk shipping industry is capital intensive, requiring significant amounts of investment. Much of this investment is financed by long term debt. Our debt usually contains interest rates that fluctuate with SOFR. See Item 3.D: “Risk Factors” above for more information on risks related to volatility in SOFR.

We are subject to market risks relating to changes in interest rates because we have floating rate debt outstanding, which is based on U.S. dollar SOFR plus, in the case of each credit facility, a specified margin. Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings and to this effect, when we deem appropriate, we use derivative financial instruments.

On July 24, 2018, EuroDry Ltd. entered into an interest rate swap with HSBC Bank Plc. (“HSBC”) for a notional amount of $5.0 million, with inception date on July 24, 2018 and maturity date on July 24, 2023. Under this contract, HSBC made a quarterly payment to EuroDry equal to the 3-month LIBOR while EuroDry paid a fixed rate of 2.93% based on the notional amount.

On April 9, 2020, EuroDry Ltd. entered into an interest rate swap with HSBC for a notional amount of $10.0 million, with inception date on April 15, 2020 and maturity date on April 15, 2025. The interest rate swap was liquidated on March 31, 2023. Under this contract, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid a fixed rate of 0.737% based on the notional amount.

On October 12, 2021, EuroDry Ltd. entered into an interest rate swap with HSBC for a notional amount of $10.0 million, with inception date on October 14, 2021 and maturity date on October 14, 2025. Under this contract, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid a fixed rate of 1.032% based on the notional amount.

In March 2023, the Company decided to liquidate its position into the three aforementioned interest rate swap agreements realizing a gain of $1.6 million.

On June 17, 2022, EuroDry Ltd. entered into an interest rate swap with National Bank of Greece S.A. (“NBG”) for a notional amount of $10.0 million, with inception date on January 3, 2023 and maturity date on January 3, 2028. Under this contract, NBG makes a quarterly payment to the Company equal to the 3-month SOFR while the Company pays a fixed rate of 3.189% based on the notional amount.

As at December 31, 2023, our average debt coverage for 2024 was approximately 10% and for the two-year period of 2025 and 2026 was approximately 13%.

As at December 31, 2023, we had $104.84 million of floating rate debt outstanding with margins over SOFR ranging from 2.0% to 3.60%. Our interest expense is affected by changes in the general level of interest rates. As an indication of the extent of our sensitivity to interest rate changes, an increase of 100 basis points would have decreased our net income and decreased our cash flows in the twelve-month period ended December 31, 2023 by approximately $813,210 assuming the same debt profile throughout the year.

The following table sets forth the sensitivity of our loans and the interest rate swaps as of December 31, 2023 in U.S. dollars to a 100 basis points increase in SOFR during the next five years. Specifically, the interest we will have to pay for our loans will increase but net payments we will have to make under our interest rate swap contracts will decrease.

Year Ended December 31,	Amount in (loans)	Amount in (swap)
2024			)
2025			)
2026			)
2027			)
2028 and thereafter			)

All values are in US Dollars.

102

Foreign Currency Exchange Rate Risk

The international drybulk shipping industry’s functional currency is the U.S. Dollar. We generate all of our revenues in U.S. dollars, but, in 2023, incurred approximately 19% of our vessel operating expenses (excluding depreciation) in currencies other than U.S. dollars. In addition, our vessel management fee is denominated in Euros and certain general and administrative expenses (about 4% in 2023) are mainly in Euros. On December 31, 2023, approximately 21% of our outstanding trade accounts payable were denominated in currencies other than the U.S. dollar, mainly in Euros. We do not use currency exchange contracts to reduce the risk of adverse foreign currency movements but we believe that our exposure from market rate fluctuations is unlikely to be material. Net foreign exchange loss for the year ended December 31, 2023 was $0.01 million. Net foreign exchange gain for the year ended December 31, 2022 was $0.04 million. Net foreign exchange gain for the year ended December 31, 2021 was $0.01 million.

A hypothetical 10% immediate and uniform adverse move in all currency exchange rates from the rates in effect as of December 31, 2023, would have increased our operating expenses by approximately $0.45 million and the fair value of our outstanding trade accounts payable by approximately $0.07 million.

Item 12.	Description of Securities Other than Equity Securities

Not Applicable.

PART II

Item 13.	Defaults, Dividend Arrearages and Delinquencies

None.

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

We adopted a shareholders’ rights plan on May 5, 2018 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, to shareholders of record at the close of business on May 30, 2018. 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 $26, subject to adjustment. The rights will expire on the earliest of (i) May 30, 2028 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 the company. We believe that the shareholders’ 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 we adopted the plan as a matter of prudent corporate governance.

Item 15.	Controls and Procedures
(a)	Evaluation of Disclosure Controls and Procedures
---	---

Pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act, the Company’s management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2023. The term disclosure controls and procedures is defined under SEC rules as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated 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 disclosure. 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.

103

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

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

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is identified in Exchange Act Rule 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s Board of Directors, management and other personnel, 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 and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (ii) 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 are being made only in accordance with the authorization of its management and directors; and (iii) 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 its consolidated financial statements.

Our management, with the participation of Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 using the criteria set forth in the “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, (2013 Framework). As a result of its assessment, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal controls over financial reporting are effective as of December 31, 2023.

(c)	Attestation Report of the Registered Public Accounting Firm

This annual report does not contain an attestation report of our registered public accounting firm regarding internal control over financial reporting as the Company is a non-accelerated filer and is exempt from this requirement.

(d)	Changes in Internal Control over Financial Reporting

No significant change in the Company’s internal control over financial reporting occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

104

Item 16A.	Audit Committee Financial Expert

Our Board of Directors has determined that all the members of our Audit Committee qualify as financial experts and they are all considered to be independent according to Nasdaq and SEC rules. Mr. Panagiotis Kyriakopoulos serves as the Chairman of our Audit Committee and as the Audit Committee’s financial expert with Mr. Apostolos Tamvakakis and Mr. George Taniskidis as members.

Item 16B.	Code of Ethics

We have adopted a code of ethics that applies to officers and employees. Our code of ethics is posted in our website, www.eurodry.gr, under “Corporate Governance”.

Item 16C.	Principal Accountant Fees and Services

Deloitte Certified Public Accountants S.A. (PCAOB ID No. 1163), an independent registered public accounting firm, has audited our annual financial statements acting as our independent auditor for the fiscal years ended December 31, 2022 and 2023. This table below sets forth the total amounts billed and accrued for Deloitte Certified Public Accountants S.A., the member firms of Deloitte and their respective affiliates (collectively, “Deloitte”).

	2022<br> <br>(dollars in thousands)		2023<br> <br>(dollars in thousands)
Audit Fees	$	170	$	201
Audit-Related Fees	_		$	3
Tax Fees	_		_
All Other Fees	_		_
Total	$	170	$	204

Audit fees relate to compensation for professional services rendered for the audit of the consolidated financial statements of the Company and for the review of the quarterly financial information as well as in connection with any other audit services required for SEC or other regulatory filings or offerings.

Audit-related fees represent compensation for certain agreed upon procedures performed. Audit-related fees are approved by the Audit Committee.

The Audit Committee is responsible for the appointment, replacement, compensation, evaluation and oversight of the work of the independent registered public accounting firm. As part of this responsibility, the Audit Committee pre-approves the audit and non-audit services performed by the independent registered public accounting firm in order to assure that they do not impair the auditor's independence from the Company. The Audit Committee has adopted a policy which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent registered public accounting firm may be pre-approved.

All services provided by Deloitte Certified Public Accountants, S.A., were pre-approved by the Audit Committee.

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

Not Applicable.

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

105

Share Repurchase Program

On August 8, 2022, we announced that our Board of Directors approved a share repurchase program (the “Program”) to purchase up to an aggregate of $10.0 million of our common shares. The Board approved the continuation of the Program for a further year and will review it again after a period of twelve months. Share repurchases will be made from time to time for cash in open market transactions pursuant to Rule 10b-18 of the Exchange Act at prevailing market prices and/or in privately negotiated transactions. The timing and amount of purchase under the Program will be determined by management based upon market conditions and other factors. The Program does not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at any time at the Company’s discretion and without notice. We will cancel common shares repurchased as part of the Program. During the years ended December 31, 2022 and 2023, we have repurchased the following common shares:

Period	Total Number<br> <br>of Shares<br> <br>Purchased		Average<br> <br>Price Paid<br> <br>per Share (1)		Total<br> <br>Number of<br> <br>Shares<br> <br>Purchased<br> <br>as part of<br> <br>Publicly<br> <br>Announced<br> <br>Plans or<br> <br>Programs		Maximum<br> <br>Number (or<br> <br>Approximate<br> <br>Dollar Value) of<br> <br>Shares that May<br> <br>Yet Be Purchased<br> <br>Under the Plans<br> <br>or Programs
September 1-30, 2022		106,821	$	13.725		106,821	$	8,533,908
October 1-31, 2022		2,142	$	13.796		2,142	$	8,504,356
November 1-30, 2022		9,325	$	15.922		9,325	$	8,355,885
December 1-31, 2022		22,013	$	15.926		22,013	$	8,005,313
Total	****	140,301	****	N/A	****	140,301	****	N/A
Period	****	****	****	****	****	****	****	****
January 1-31, 2023		7,061	$	16.765		7,061	$	7,886,935
February 1-28, 2023		11,851	$	16.760		11,851	$	7,688,314
March 1-31, 2023		39,518	$	17.233		39,518	$	7,007,319
June 1-30, 2023		3,518	$	13.871		3,518	$	6,958,522
July 1-31, 2023		14,302	$	14.049		14,302	$	6,757,592
August 1-31, 2023		21,880	$	14.406		21,880	$	6,442,394
September 1-30, 2023		15,049	$	14.277		15,049	$	6,227,539
October 1-31, 2023		15,010	$	15.384		15,010	$	5,996,622
November 1-30, 2023		1,114		15.175		1,114	$	5,979,717
Total	****	129,303	****	N/A	****	129,303	****	N/A
(1)	The average price paid per share does not include commissions paid for each transaction.
---	---

The repurchased shares were cancelled and removed from the Company’s share capital as of December 31, 2023.

Item 16F.	Change in Registrant’s Certifying Accountant

106

None.

Item 16G.	Corporate Governance

Please see Item 6.C. Board Practices - Corporate Governance.

OTHER THAN AS NOTED IN THE SECTION ABOVE, WE ARE IN FULL COMPLIANCE WITH ALL OTHER APPLICABLE NASDAQ CORPORATE GOVERNANCE STANDARDS.

Item 16H.	Mine Safety Disclosure

Not Applicable.

Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable.

Item 16J.	Insider Trading Policies

Pursuant to applicable SEC transition guidance, the disclosure required by Item 16J will only be applicable to the Company from the fiscal year ending on December 31, 2024.

Item 16K.	Cybersecurity

We have implemented a cybersecurity strategy involving various dedicated personnel and resources aimed at preventing, detecting and responding to cyberattacks, as well as being able to recover promptly in the event of material impact following a cyberattack. Additionally, we regularly update our cybersecurity processes to address cybersecurity trends and threats. Cybersecurity processes have been established to address material cybersecurity risks, including in connection with the following areas:

●	information technology and solution usage;
●	access control;
---	---
●	patch management;
---	---
●	security on specific environments (i.e. cloud, virtualization, automated systems, etc.);
---	---
●	log management;
---	---
●	network security;
---	---
●	systems security standards;
---	---
●	remote access;
---	---
●	cryptography;
---	---
●	mobile devices;
---	---
●	incident management.
---	---

In particular, we deploy a variety of methods of defense such as endpoint security, email and web filtering, access and identity management and security monitoring to provide appropriate levels of protection against cybersecurity threats.

We actively monitor our systems to prevent and detect any future cybersecurity threats and separately, we monitor cybersecurity threats or incidents committed against other companies as such events become public. This allows us to remain current with the latest trends in cybersecurity and make improvements to our defense strategy to consider newly-identified and developing areas of cybersecurity threats. We have put in place response procedures for prompt cybersecurity incident identification, reporting and remediation if we are subject to an information system security breach. We utilize security standards and have established cross-functional risk control capabilities to facilitate operational implementation aligned with our cybersecurity processes.

107

The employees of our Manager, who are the main users of our digital assets, are trained to face cybersecurity threats and attacks. The training covers areas such as personal digital footprint, privacy settings, phishing, information security at home and at work, ransomware, password hygiene and business email compromise.

In the event of a cyberattack, the Chief Information Security Officer of our Manager uses the internal escalation channels to inform the management as further described below.

We closely monitor changes in data protection rules and guidance. This allows us to maintain compliance with applicable laws and to keep ahead of developments and regulatory shifts.

Ongoing risks from cybersecurity threats demand management vigilance, investment, and oversight. Although we have put in place the cybersecurity processes described above, cybersecurity attacks and incidents and misuse or manipulation of any of our IT systems could have a material adverse effect on our business strategy, results of operations or financial condition (see “Item 3. Key Information—D. Risk Factors—Industry Risk Factors—We rely on our information technology, and if we are unable to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, our operations could be disrupted and our business could be negatively affected.”)

The governance of cybersecurity risks is overseen by our board of directors, with the audit committee dedicated to this area. This group receives regular updates on cybersecurity matters from our Manager. This approach ensures that we are prepared to identify, assess, and respond to cybersecurity challenges, aligning our risk management with our organizational goals. As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition.

Governance

Our Manager has appointed a Chief Information Security Officer who oversees the information, cybersecurity, and technology security. The Chief Information Security Officer is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. He develops appropriate plans to mitigate such risks. Such plans are validated by the members of our Board. The Chief Information Security Officer belongs to the Safety & Quality division of our Manager and reports to our Chief Executive Officer.

The Audit Committee oversees that the cybersecurity risks are well managed and reports on such management to the Board of Directors. The Board of Directors is also informed of such risks, as well as other cybersecurity matters, through periodic reports from the Manager. Our Chief Executive Officer is responsible for overseeing the alignment of the cybersecurity strategy with the strategic plan of the Company. In the event of a cybersecurity incident, we have implemented a process in which the Chief Information Security Officer would report such incident to our Chief Executive Officer and the Audit Committee if the incident is determined to present critical risk to us.

108

PART III

Item 17.	Financial Statements

See Item 18.

Item 18.	Financial Statements

The financial statements set forth on pages F-1 through F-51, together with the report of independent registered public accounting firm, are filed as part of this annual report.

Item 19.	Exhibits
1.1	Amended and Restated Articles of Incorporation of EuroDry Ltd. (1)
---	---
1.2	Amended and Restated Bylaws of EuroDry Ltd. (2)
2.1	Specimen Common Stock Certificate (2)
2.2	Specimen Series B Preferred Share Certificate (2)
2.3	Form of Registration Rights Agreement by and among EuroDry Ltd., Tennenbaum Opportunities Fund VI, LLC, and Friends Investment Company, Inc. (2)
2.4	Shareholders Rights Agreement between EuroDry Ltd. and American Stock Transfer and Trust Company, LLC (6)
2.5	Form of Contribution Agreement between EuroDry Ltd. and Euroseas Ltd. (2)
2.6	Description of Securities
4.1	Form of Master Management Agreement between EuroDry Ltd. and Eurobulk Ltd. (2)
4.2	Form of Master Management Agreement between EuroDry Ltd. and Eurobulk Far East (2)
4.3	EuroDry 2022 Equity Incentive Plan
4.4	Form of Standard Ship Management Agreement (2)
4.5	Form of Current Time Charter (2)
4.6	Loan Agreement between Ultra One Shipping Ltd. and Kamsarmax One Shipping Ltd., as Borrowers, and Eurobank S.A. as Lender, Arranger, Account Bank, Agent and Security Trustee, relating to a secured term loan facility of up to US$26,700,000, dated January 27, 2021. (3)
4.7	Guarantee between EuroDry Ltd., as Guarantor, and Eurobank S.A., as Security Trustee, relating to a secured term loan facility of up to US$26,700,000 between Ultra One Shipping Ltd. and Kamsarmax One Shipping Ltd., dated January 27, 2021. (3)
4.8	Loan Agreement between Eirini Shipping Ltd., as Borrower, and Sinopac Capital International (HK) Limited, as Lender, for up to US$5,000,000, dated February 22, 2021. (3)
4.9	Guarantee between EuroDry Ltd., as Guarantor, and Sinopac Capital International (HK) Limited, as Lender, relating to a Loan Agreement for up to US$5,000,000 dated February 22, 2021. (3)
4.10	Loan Agreement between Blessed Luck Shipowners Ltd., as borrower, and Piraeus Bank S.A., as lender, for up to US$8,000,000, dated August 12, 2021. (4)
4.11	Guarantee between EuroDry Ltd., as guarantor, and Piraeus Bank S.A., as lender, for up to US$8,000,000, dated August 12, 2021. (4)
4.12	Loan Agreement between Light Shipping Ltd. and Good Heart Shipping Ltd., as joint and several borrowers, and National Bank of Greece S.A., as lender, for up to US$22,000,000, dated September 30, 2021. (4)
4.13	Guarantee between EuroDry Ltd., as guarantor, and National Bank of Greece, as lender, for up to $22,000,000, dated September 30, 2021. (4)
4.14	Loan Agreement between Areti Shipping Ltd. and Pantelis Shipping Corp., as borrowers, and Chailease International Financial Services (Singapore) Pte. Ltd., as lender, Guaranteed by EuroDry Ltd., as guarantor, for up to US$9,000,000, dated October 6, 2021. (4)
4.15	Loan Agreement between Molyvos Shipping Ltd. and Santa Cruz Shipowners, as borrowers, and Piraeus Bank S.A., as lender, for a loan of up to US$20,000,000, dated September 30, 2022. (5)

109

4.16	Supplemental Loan Agreement between Areti Shipping Ltd., as Borrower, Eurodry Ltd., as Guarantor, and Chailease International Financial Services (Singapore) Pte. Ltd., as lender, for up to US$9,000,000, dated October 21, 2022.
4.17	Loan Agreement between Kamsarmax Two Shipping Ltd. as Borrower, and Hamburg Commercial Bank AG, as Lender, Agent, Mandated Lead Arranger and Security Trustee, relating to a secured term loan facility of up to US$14,000,000, dated June 20, 2023.
4.18	Guarantee between EuroDry Ltd., as Guarantor, and Hamburg Commercial Bank AG, as Security Trustee, relating to a secured term loan facility of up to $14,000,000 dated June 20, 2023.
4.19	Supplemental Agreement to a Loan Agreement dated January 27, 2021, between Ultra One Shipping Ltd. and Kamsarmax One Shipping Ltd., as Borrowers, and Eurobank S.A., as Lender, dated 30 June 2023.
4.20	Supplemental Agreement to a Loan Agreement dated September 30, 2021, between Light Shipping Ltd. and Good Heart Shipping Ltd., as Borrowers, Eurodry Ltd., as Guarantor, and National Bank of Greece S.A., as Lender, dated July 4, 2023.
4.21	Supplemental Agreement to a Loan Agreement dated August 12, 2021, between Blessed Luck Shipowners Ltd., as Borrower, and Piraeus Bank, as Lender, dated July 12, 2023.
4.22	Supplemental Agreement to a Loan Agreement dated August 12, 2023, between Blessed Luck Shipowners Ltd., as Borrower, and Piraeus Bank, as Lender, dated November 8, 2023.
4.23	Supplemental Loan Agreement dated September 30, 2022, between Molyvos Shipping Ltd. and Santa Cruz Shipowners Ltd., as Borrowers, and Piraeus Bank, as Lender, dated July 12, 2023.
4.24	Supplemental Loan Agreement dated September 30, 2022, between Molyvos Shipping Ltd. and Santa Cruz Shipowners Ltd., as Borrowers, and Piraeus Bank, as Lender, dated November 8, 2023.
4.25	Supplemental Loan Agreement dated February 22, 2021, between Eirini Shipping Ltd., as Borrower, with Eurodry Ltd., as Corporate Guarantor, and Sinopac Capital International (HK) Limited, as Lender, dated September 6, 2023.
4.26	Loan Agreement between Yannis Navigation Ltd., as Borrower, and Eurobank S.A., as lender, for a senior secured term loan of up to $10,500,000, dated October 12, 2023.
4.27	Guarantee between EuroDry Ltd, as Guarantor, and Eurobank S.A., as Security Trustee, relating to a senior secured term loan of up to $10,500,000, dated October 12, 2023.
4.28	Loan Agreement between Christos Ultra LP and Maria Ultra LP, as Borrowers, and Eurobank S.A., as lender, for a senior secured term loan of up to $22,000,000 dated October 23, 2023.
8.1	Subsidiaries of the Registrant.
12.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
12.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
13.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1	Consent of Deloitte Certified Public Accountants S.A.
97.1	Policy Regarding the Recovery of Erroneously Awarded Compensation.
101.INS^*^	Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
101.SCH^*^	Inline XBRL Taxonomy Extension Schema Document.
101.CAL^*^	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF^*^	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB^*^	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE^*^	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104^*^	Cover Page Interactive Data File (embedded within the Inline XBRL document).

_______________________________

^*^ Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

(1)	Filed as an Exhibit to the Company's Form 6-K (File No. 001-38502) on May 29, 2018.
(2)	Filed as an Exhibit to the Company's Registration Statement (File No. 333-224732) on May 8, 2018.
(3)	Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-38502) on April 22, 2021.
(4)	Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-38502) on April 15, 2022.
(5)	Filed as an Exhibit to the Company’s Annual Report on Form 20-F (File No. 001-38502) on April 24, 2023.
(6)	Filed as an Exhibit to the Company’s Form 6-K (File No. 001-38502) on May 31, 2018.

110

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.

ODRY LTD.
(Registrant)
By:

All values are in Euros.

Date: April 24, 2024

111

EuroDry Ltd. and Subsidiaries
Consolidated financial statements

Index to consolidated financial statements

	Pages
Report of Independent Registered Public Accounting Firm: Deloitte Certified Public Accountants S.A. (PCAOB ID No. 1163)	F-2
Consolidated Balance Sheets as of December 31, 2022 and 2023	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2021, 2022 and 2023	F-6
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2021, 2022 and 2023	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2022 and 2023	F-8
Notes to the Consolidated Financial Statements	F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of EuroDry Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of EuroDry Ltd. and subsidiaries (the “Company”) as of December 31, 2022 and 2023, the related consolidated statements of operations, shareholders' equity and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of vessels – Future Charter Rates for vessels with impairment indicators– Refer to Note 2 of the consolidated financial statements.

F-2

Critical Audit Matter Description

The Company’s evaluation of its vessels held for use for impairment involves an assessment of each vessel to determine whether events or changes in circumstances indicate that the carrying amount of the vessel may not be recoverable. As of December 31, 2023, three out of thirteen vessels had impairment indicators.

If indicators of impairment are present, the Company performs an analysis of the future undiscounted net operating cash flows of the related vessel. When the Company’s estimate of future undiscounted net operating cash flows (excluding interest charges) expected to be generated by the use and eventual disposition of any vessel for which indicators of impairment exist is less than its carrying amount, the Company records an impairment loss to reduce the vessel’s carrying value to its fair market value.

In developing estimates of future cash flows, the Company makes various assumptions including future charter rates which are the most sensitive and subjective assumption. For periods of time where the vessels are not fixed on time charters, the Company estimates the future daily time charter equivalent rate (the “future charter rate”) for the vessels’ unfixed days as follows: i) for the first two years based on the prevailing market charter rates and ii) from the third year onwards, the inflation-unadjusted historical average rates for similar size vessels over a 15-year period for 2023, which takes into account complete market cycles. These assumptions are based on historical trends as well as future expectations.

We identified future charter rates used in the future undiscounted net operating cash flows for vessels with impairment indicators as a critical audit matter because of the complex judgements made by management to estimate them and the significant impact they have on undiscounted cash flows expected to be generated over the remaining useful life of the vessel.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s future charter rates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the future charter rates for vessels with impairment indicators utilized in the future undiscounted net operating cash flows included the following among others:

We evaluated the reasonableness of the Company’s estimate of future charter rates through the performance of the following procedures:

1.	Evaluating the Company’s methodology for estimating the future charter rates by using our industry experience.
2.	Evaluating the Company’s assumptions regarding future charter rates by comparing the future charter rates utilized in the future undiscounted net operating cash flows to 1) the Company’s historical rates, 2) the Company’s budget, 3) historical rate information of similar vessels published by third party broker and 4) other external market sources, including analysts’ reports and reports on prospective market outlook.
3.	Considering the consistency of the assumptions used in the future charter rates with evidence obtained in other areas of the audit. This included 1) internal communications by management to the board of directors, and 2) external communications by management to analysts and investors.
4.	Evaluating management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

/s/ Deloitte Certified Public Accountants S.A.

Athens, Greece

April 24, 2024

We have served as the Company's auditor since 2018.

F-3

EuroDry Ltd. and Subsidiaries
Consolidated Balance Sheets
(All amounts, except share data, expressed in U.S. Dollars)
	Notes		December 31, 2022		December 31, 2023
---	---	---	---	---	---	---
Assets	****	****	****	****	****	****
Current assets	****	****	****	****	****	****
Cash and cash equivalents				34,042,150		8,002,024
Restricted cash		7		1,195,863		2,797,569
Trade accounts receivable, net				7,147,833		6,740,606
Other receivables				346,066		2,127,266
Prepaid expenses				249,024		243,380
Inventories		3		1,057,652		4,117,663
Derivatives		13		1,437,398		196,627
Due from related companies		6		2,416,180		-
Total current assets	****	****	****	47,892,166	****	24,225,135
Long-term assets	****	****	****	****	****	****
Vessels, net		4		149,022,023		203,528,116
Derivatives		13		705,970		-
Restricted cash		7		1,885,000		3,300,000
Total assets	****	****	****	199,505,159	****	231,053,251
Liabilities and shareholders’ equity	****	****	****	****	****	****
Current liabilities	****	****	****	****	****	****
Long-term bank loans, current portion		7		22,858,087		17,804,553
Trade accounts payable				2,989,431		3,146,931
Accrued expenses		5		1,004,719		2,320,606
Derivatives		13		-		1,287,720
Deferred revenues				351,636		346,838
Due to related companies		6		-		577,542
Total current liabilities	****	****	****	27,203,873	****	25,484,190

(Consolidated balance sheets continue on the next page)

F-4

EuroDry Ltd. and Subsidiaries
Consolidated Balance Sheets
(All amounts, except share data, expressed in U.S. Dollars)

(continued)

		December 31, 2022		December 31, 2023
Long-term liabilities	****	****	****	****	****
Long-term bank loans, net of current portion	7		58,360,169		86,123,063
Derivatives	13		-		17,769
Total long-term liabilities	****	****	58,360,169	****	86,140,832
Total liabilities	****	****	85,564,042	****	111,625,022
Commitments and contingencies	9
Shareholders’ equity	****	****	****	****	****
Common stock (par value 0.01, 200,000,000 shares authorized, 2,902,620 and 2,832,417 issued and outstanding, respectively)	15		29,026		28,324
Additional paid-in capital			69,438,938		68,069,724
Retained earnings			44,473,153		41,564,249
Total EuroDry Ltd. common shareholders’ equity	****	****	113,941,117	****	109,662,297
Non-controlling interest	16	****	-		9,765,932
Total shareholders’ equity	****	****	113,941,117	****	119,428,229
Total liabilities and shareholders’ equity	****	****	199,505,159	****	231,053,251

All values are in US Dollars.

The accompanying notes are an integral part of these consolidated financial statements.

F-5

EuroDry Ltd. and Subsidiaries
Consolidated statements of operations ****
Years ended December 31, 2021, 2022 and 2023
(All amounts, except for share data, expressed in U.S. Dollars)
		2021			2022			2023
---	---	---	---	---	---	---	---	---	---	---
Revenues	****	****	****	****	****	****	****	****	****	****
Time charter revenue			68,506,729			74,569,867			47,824,857
Voyage charter revenue			-			-			2,609,775
Commissions (including 856,334, 932,123 and 630,433, respectively, to related party)	6		(4,064,903	)		(4,386,498	)		(2,842,708	)
Net revenue	****	****	64,441,826		****	70,183,369		****	47,591,924
Operating expenses	****	****	****	****	****	****	****	****	****	****
Voyage expenses, net	12		(755,998	)		(2,025,120	)		3,993,031
Vessel operating expenses (including 130,384, 207,602 and 191,655, respectively, to related party)	6, 12		13,565,092			19,333,898			20,758,708
Dry-docking expenses			97,094			4,816,558			3,404,323
Vessel depreciation	4		7,656,638			10,757,177			10,966,621
Related party management fees	6		2,350,747			2,968,073			3,281,361
General and administrative expenses (including 1,710,000, 1,460,000 and 1,350,000, respectively, to related party)	6, 10		2,638,427			3,072,583			3,459,943
Net gain on sale of vessel	4		-			(2,856,525	)		-
Other operating loss	9		-			-			500,000
Bad debt expense	2		-			-			134,294
Total operating expenses	****	****	25,552,000		****	36,066,644		****	46,498,281
Operating income	****	****	38,889,826		****	34,116,725		****	1,093,643
Other income / (expenses)	****	****	****	****	****	****	****	****	****	****
Interest and other financing costs (including 79,533, 0 and 0, respectively, to related party)	6, 7		(2,339,023	)		(3,853,047	)		(6,486,814	)
Loss on debt extinguishment			(1,647,654	)		-			-
(Loss) / gain on derivatives, net	13		(3,765,619	)		3,189,610			1,218,375
Interest income			10,484			46,298			897,618
Foreign exchange gain / (loss)			5,807			43,085			(5,794	)
Other expenses, net	****	****	(7,736,005	)	****	(574,054	)	****	(4,376,615	)
Net income / (loss)	****	****	31,153,821		****	33,542,671		****	(3,282,972	)
Net loss attributable to the non-controlling interest	16	****	-		****	-			374,068
Dividends to Series B preferred shares			(1,085,902	)		-			-
Preferred deemed dividend			(665,287	)		-			-
Net income / (loss) attributable to controlling shareholders	****	****	29,402,632		****	33,542,671		****	(2,908,904	)
Earnings / (loss) per share attributable to controlling shareholders – basic	11	****	11.63		****	11.66		****	(1.05	)
Weighted average number of shares outstanding during the year, basic	11		2,528,507			2,876,320			2,763,121
Earnings / (loss) per share attributable to controlling shareholders – diluted	11	****	11.54		****	11.61		****	(1.05	)
Weighted average number of shares outstanding during the year, diluted	11		2,548,950			2,889,991			2,763,121

All values are in US Dollars.

The accompanying notes are an integral part of these consolidated financial statements.

F-6

EuroDry Ltd. and Subsidiaries
Consolidated statements of shareholders’ equity
Years ended December 31, 2021, 2022 and 2023
(All amounts, except share data, expressed in U.S. Dollars)
	Number of Shares Outstanding	****	Common Stock Amount	****	Additional Paid - in Capital	****	(Accumulated Deficit) / Retained Earnings	****	Total EuroDry Ltd. common shareholders’ equity	****	Non-controlling interest			Total shareholders’ equity	****
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance January 1, 2021	2,348,216		23,482		53,048,060		(18,472,150	)	34,599,392		****	-		34,599,392
Net income	-		-		-		31,153,821		31,153,821			-		31,153,821
Dividends to Series B preferred shares	-		-		-		(1,085,902	)	(1,085,902	)		-		(1,085,902	)
Preferred deemed dividend	-		-		-		(665,287	)	(665,287	)		-		(665,287	)
Issuance of shares sold at the market (ATM), net of issuance costs	341,017		3,410		9,739,649		-		9,743,059			-		9,743,059
Issuance of shares in connection with related party loan converted to equity	180,308		1,803		4,945,851		-		4,947,654			-		4,947,654
Issuance of restricted shares for stock incentive award and share-based compensation	49,650		497		230,147		-		230,644			-		230,644
Balance December 31, 2021	2,919,191		29,192		67,963,707		10,930,482		78,923,381		****	-		78,923,381
Net income	-		-		-		33,542,671		33,542,671			-		33,542,671
Issuance of shares sold at the market (ATM), net of issuance costs	65,130		651		2,684,951		-		2,685,602			-		2,685,602
Repurchase and cancelation of common shares	(140,301	)	(1,403	)	(1,997,859	)	-		(1,999,262	)		-		(1,999,262	)
Issuance of restricted shares for stock incentive award and share-based compensation	58,600		586		788,139		-		788,725			-		788,725
Balance December 31, 2022	2,902,620		29,026		69,438,938		44,473,153		113,941,117		****	-		113,941,117
Net loss	-		-		-		(2,908,904	)	(2,908,904	)		(374,068	)	(3,282,972	)
Capital contributions made by non-controlling shareholders	-		-		-		-		-			10,140,000		10,140,000
Repurchase and cancelation of common shares	(129,303	)	(1,293	)	(2,029,277	)	-		(2,030,570	)		-		(2,030,570	)
Issuance of restricted shares for stock incentive award and share-based compensation	59,100		591		797,393		-		797,984			-		797,984
Offering expenses paid	-		-		(137,330	)			(137,330	)		-		(137,330	)
Balance December 31, 2023	2,832,417		28,324		68,069,724		41,564,249		109,662,297		****	9,765,932		119,428,229

The accompanying notes are an integral part of these consolidated financial statements.

F-7

EuroDry Ltd. and Subsidiaries
Consolidated statements of cash flows
Years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
	2021			2022			2023
---	---	---	---	---	---	---	---	---	---
Cash flows from operating activities:	****	****	****	****	****	****	****	****	****
Net income / (loss)		31,153,821			33,542,671			(3,282,972	)
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:
Vessel depreciation		7,656,638			10,757,177			10,966,621
Amortization and write off of deferred charges		298,329			230,589			209,110
Loss on debt extinguishment		1,647,654			-			-
Share-based compensation		230,644			788,725			797,984
Unrealized (gain) / loss on derivatives		(770,715	)		(2,222,685	)		3,252,230
Gain on sale of vessel		-			(2,856,525	)		-
Bad debt expense		-			-			134,294
Changes in operating assets and liabilities:
(Increase) / decrease in:
Trade accounts receivable		753,020			(6,372,798	)		272,933
Prepaid expenses		(88,364	)		65,373			5,644
Other receivables		(782,594	)		896,737			(1,781,200	)
Inventories		614,938			(287,310	)		(3,060,011	)
Due from related companies		-			(2,416,180	)		2,416,180
Increase / (decrease) in:
Trade accounts payable		(251,260	)		2,114,784			(13,382	)
Accrued expenses		147,934			152,277			1,315,887
Deferred revenues		1,268,418			(1,162,907	)		(4,798	)
Due to related companies		(2,740,172	)		(244,587	)		577,542
Net cash provided by operating activities	****	39,138,291		****	32,985,341		****	11,806,062
Cash flows from investing activities:	****	****	****	****	****	****	****	****	****
Cash paid for vessel acquisitions and capitalized expenses		(36,823,327	)		(37,786,324	)		(65,286,558	)
Net proceeds from sale of vessel		-			9,387,717			(15,274	)
Net cash used in investing activities	****	(36,823,327	)	****	(28,398,607	)	****	(65,301,832	)

(Consolidated statements of cash flows continue on the next page)

F-8

EuroDry Ltd. and Subsidiaries
Consolidated statements of cash flows
Years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)

(Continued)

	2021			2022			2023
Cash flows from financing activities:	****	****	****	****	****	****	****	****	****
Redemption of preferred shares		(16,606,000	)		-			-
Proceeds from issuance of common stock, net of commissions paid		9,975,312			2,685,602			-
Cash paid for share repurchase		-			(1,999,262	)		(2,030,570	)
Offering expenses paid		(219,826	)		(12,427	)		(137,330	)
Preferred dividends paid		(1,085,902	)		-			-
Loan arrangement fees paid		(760,500	)		(150,000	)		(479,750	)
Contributions made by non-controlling shareholders		-			-			10,140,000
Proceeds from related party loan		6,000,000			-			-
Proceeds from long-term bank loans		70,700,000			20,000,000			46,500,000
Repayment of related party loan		(2,700,000	)		-			-
Repayment of long-term bank loans		(42,697,000	)		(17,515,000	)		(23,520,000	)
Net cash provided by financing activities	****	22,606,084		****	3,008,913		****	30,472,350
Net increase / (decrease) in cash, cash equivalents and restricted cash		24,921,048			7,595,647			(23,023,420	)
Cash, cash equivalents and restricted cash at beginning of year		4,606,318			29,527,366			37,123,013
Cash, cash equivalents and restricted cash at end of year	****	29,527,366		****	37,123,013		****	14,099,593
Cash Breakdown	****	****	****	****	****	****	****	****	****
Cash and cash equivalents		26,847,426			34,042,150			8,002,024
Restricted cash, current		459,940			1,195,863			2,797,569
Restricted cash, long term		2,220,000			1,885,000			3,300,000
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	****	29,527,366		****	37,123,013		****	14,099,593
Supplemental cash flow information
Cash paid for interest		2,147,352			3,366,221			5,950,733
Financing and investing activities fees:	****	****	****	****	****	****	****	****	****
Offering expenses accrued		12,427			-			-
Capital expenditures included in liabilities		28,334			44,309			230,465
Vessel sale expenses included in liabilities		-			15,274			-
Shares issued in connection with related party loan converted to equity		4,947,654			-			-

The accompanying notes are an integral part of these consolidated financial statements.

F-9

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
as of December 31, 2022 and 2023 and for the
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
1.	Basis of Presentation and General Information
---	---

EuroDry Ltd. (the “Company” or “EuroDry”) was formed by Euroseas Ltd. (“Euroseas” or “former Parent Company”) on January 8, 2018 under the laws of the Republic of the Marshall Islands to serve as the holding company of seven subsidiaries (the “Subsidiaries”) contributed by Euroseas to EuroDry in connection with the spin-off of Euroseas’ drybulk vessels held for use as of *December 31, 2017 (*the “Spin-off”). On May 30, 2018, Euroseas contributed these Subsidiaries to EuroDry in exchange for 2,254,830 common shares in EuroDry, which Euroseas distributed to holders of Euroseas common stock on a pro rata basis. Further, on May 30, 2018 Euroseas distributed shares of the Company’s Series B Preferred Stock (the “EuroDry Series B Preferred Shares”) to holders of Euroseas’ Series B Preferred Shares, representing 50% of Euroseas Series B Preferred Stock. EuroDry’s common shares trade on the Nasdaq Capital Market under the ticker symbol “EDRY”.

The operations of the vessels are managed by Eurobulk Ltd. (“Eurobulk” or “Manager”) and Eurobulk (Far East) Ltd. Inc. (“Eurobulk FE”), collectively the “Managers”, corporations controlled by members of the Pittas family. Eurobulk has an office in Greece located at 4 Messogiou & Evropis Street, Maroussi, Greece; Eurobulk FE has an office at Manilla, Philippines Suite 1003, 10th Floor Ma. Natividad Building, 470 T.M. Kalaw cor. Cortada Sts., Ermita. Both provide the Company with a wide range of shipping services such as technical support and maintenance, insurance consulting, chartering, financial and accounting services, while Eurobulk also provides executive management services, in consideration for fixed and variable fees (see Note 6).

The Pittas family is the controlling shareholder of Friends Dry Investment Company Inc., Family United Navigation Co. and Ergina Shipping Ltd. which, in turn, own 47.6% of the Company’s shares as of December 31, 2023. Mr. Aristides J. Pittas is the Chairman and Chief Executive Officer of the Company and Euroseas.

As of *December 31, 2023,*the Company had a working capital deficit of $1.3 million, partly due to a balloon payment on the Company’s long-term debt. For the year ended *December 31, 2023,*the Company reported a net loss of $3.3 million, a net loss attributable to controlling shareholders of $2.9 million and generated net cash from operating activities of $11.8 million. The Company’s cash balance amounted to $8.0 million, while cash in restricted and retention accounts amounted to $6.1 million as of December 31, 2023. The Company intends to fund its working capital requirements via cash on hand and cash flows from operations. In the event that these sources are not sufficient, the Company mayalso use funds from debt refinancing, debt balloon payment refinancing, proceeds from its on-going at-the-market offering and other equity offerings and sell vessels (where equity and liquidity will be released), if required, among other options. The Company believes it will have adequate funding through the sources described above and, accordingly, it believes it has the ability to continue as a going concern and finance its obligations as they come due over the next twelve months following the date of the issuance of these financial statements. Consequently, the consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

F- 10

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
1.	Basis of Presentation and General Information - Continued
---	---

The Company is engaged in the ocean transportation of dry bulk through ownership and operation of dry bulk ship-owning companies. Details of the Company’s wholly or partly owned controlled subsidiaries for the year ended December 31, 2023 are set out below:

100% interest in subsidiaries

●	Pantelis Shipping Corp., incorporated in the Republic of Liberia on December 4, 2009, owner of the Liberian flag 74,020 DWT bulk carrier M/V “Pantelis” which was built in 2000 and acquired on July 23, 2009. The vessel was sold on October 17, 2022.
●	Eirini Shipping Ltd., incorporated in the Republic of Liberia on February 2, 2014, owner of the Liberian flag 76,466 DWT bulk carrier M/V “Eirini P” which was built in 2004 and acquired on May 26, 2014.
---	---
●	Ultra One Shipping Ltd., incorporated in the Republic of Liberia on November 21, 2013, owner of Liberian flag 63,500 DWT bulk carrier M/V “Alexandros P.”. M/V “Alexandros P”, which was a new build, was delivered on January 16, 2017.
---	---
●	Kamsarmax One Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, owner of the Marshall Islands flag 82,000 DWT bulk carrier M/V “Xenia”. M/V “Xenia”, which was a new build, was delivered on February 25, 2016.
---	---
●	Kamsarmax Two Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, owner of the Marshall Islands flag 82,000 DWT bulk carrier M/V “Ekaterini”. M/V “Ekaterini”, which was a new build, was delivered on May 7, 2018.
---	---
●	Areti Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 15, 2016, owner of the Cypriot flag 75,100 DWT bulk carrier M/V “Tasos” which was built in 2000 and acquired on January 9, 2017.
---	---
●	Light Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 6, 2018, owner of the Cypriot flag 75,845 DWT bulk carrier M/V “Starlight” which was built in 2004 and acquired on November 30, 2018.
---	---
●	Blessed Luck Shipowners Ltd., incorporated in the Republic of Liberia on May 6, 2021, owner of Liberian flag 76,704 DWT bulk carrier M/V “Blessed Luck.”, which was built in 2004, and acquired on May 28, 2021.
---	---
●	Good Heart Shipping Ltd., incorporated in the Republic of Liberia on August 13, 2021, owner of Liberian flag 62,996 DWT bulk carrier M/V “Good Heart”, which was built in 2014 and acquired on September 22, 2021.
---	---

F- 11

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
1.	Basis of Presentation and General Information - Continued
---	---
●	Molyvos Shipping Ltd., incorporated in the Republic of the Marshall Islands on January 11, 2022, owner of the Marshall Islands flag 57,924 DWT bulk carrier M/V “Molyvos Luck”, which was built in 2014 and acquired on February 11, 2022.
---	---
●	Santa Cruz Shipowners Ltd., incorporated in the Republic of Liberia on April 6, 2022, owner of the Liberian flag 76,440 DWT bulk carrier M/V “Santa Cruz”, which was built in 2005 and acquired on April 20, 2022.
---	---
●	Yannis Navigation Ltd., incorporated in the Republic of the Marshall Islands on September 12, 2023, owner of the Marshall Islands flag 63,177 DWT bulk carrier M/V “Yannis Pittas”, which was built in 2014 and acquired on October 10, 2023.
---	---
●	Ultra Limited Partner Ltd., incorporated in the Republic of the Marshall Islands on September 27, 2023, owner of 60% of the Marshall Islands companies Christos Ultra LP. and Maria Ultra LP (refer below).
---	---
●	Ultra General Partner Ltd. incorporated in the Republic of the Marshall Islands on September 27, 2023, owner of 1% of the Marshall Islands companies Christos Ultra LP. and Maria Ultra LP (refer below).
---	---

61% interest in subsidiaries

●	Christos Ultra LP., incorporated in the Republic of the Marshall Islands on September 11, 2023, owner of the Marshall Islands flag 63,197 DWT bulk carrier M/V “Christos K”, which was built in 2015 and acquired on October 25, 2023.
●	Maria Ultra LP., incorporated in the Republic of the Marshall Islands on September 11, 2023, owner of the Marshall Islands flag 63,153 DWT bulk carrier M/V “Maria”, which was built in 2015 and acquired on November 6, 2023.
---	---

F- 12

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
1.	Basis of Presentation and General Information - Continued
---	---

The following charterers individually accounted for more than 10% of the Company’s revenues as follows:

	Year ended December 31,
Charterer	2021			2022			2023
Amaggi Europe B.V.		15	%		11	%		17	%
Tongli Shipping PTE Ltd.		11	%		12	%		16	%
Quadra Commodities S.A.		27	%		13	%		-
OLAM Group		-			13	%		-
Ultrabulk A/S		19	%		11	%		-

F- 13

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies
---	---

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The following are the significant accounting policies adopted by the Company:

Principles of consolidation

The accompanying consolidated financial statements include the accounts of EuroDry Ltd. and its subsidiaries (collectively, the “Company”) referred to in Note 1. All intercompany balances and transactions have been eliminated on consolidation.

EuroDry as the holding company determines whether it has 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 make financial and operating decisions. EuroDry consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%), of the voting interest.

Following the provisions of ASC 810 “Consolidation”, 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 variable interest entity in its consolidated financial statements. The Company’s evaluation did not result in an identification of variable interest entities for the years ended December 31, 2021, 2022 and 2023.

Use of estimates

The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the stated amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other comprehensive income / (loss)

The Company has no other comprehensive income / (loss) and accordingly comprehensive income / (loss) equals net income / (loss) for all periods presented. As such, no statement of comprehensive income / (loss) has been presented.

F- 14

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Foreign currency translation

The Company’s functional currency as well as the functional currency of all its subsidiaries is the U.S. dollar. Assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the balance sheet date. Income and expenses denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the date of the transaction. The resulting exchange gains and/or losses on settlement or translation are included in the accompanying consolidated statements of operations.

Cash equivalents

Cash equivalents are cash in bank accounts, time deposits or other certificates purchased with an original maturity of three months or less.

Restricted cash

Restricted cash reflects deposits with certain banks that can only be used to pay the current loan installments or are required to be maintained as a certain minimum cash balance per mortgaged vessel and amounts that are pledged, blocked or held as cash collateral under the Company’s borrowing arrangements or derivative contracts.

Trade accounts receivable, net

The amount shown as trade accounts receivable, at each balance sheet date, includes estimated recoveries from each voyage or time charter. At each balance sheet date, the Company provides for doubtful accounts on the basis of specific identified doubtful receivables. Bad debts are written off in the period in which they are identified. As of December 31, 2023, the Company wrote-off certain trade receivables by recording a bad debt expense for the year ended December 31, 2023 of

$134,294.

Inventories

Inventories consist of lubricants and bunkers, which are stated at the lower of cost and net realizable value, which is the estimated selling price less reasonably predictable costs of disposal and transportation. Inventories are valued using the FIFO (First-In First-Out) method.

Vessels

Vessels are stated at cost, which comprises the vessel contract price, costs of major repairs and improvements upon acquisition, direct delivery and other acquisition expenses to prepare the vessel for her initial voyage, less accumulated depreciation and impairment, if any. 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; otherwise, these amounts are charged to expense as incurred.

F- 15

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Expenditures for vessel repair and maintenance are charged against income in the period incurred.

Depreciation

Depreciation is calculated on a straight line basis over the estimated useful life of the vessel with reference to the cost of the vessel, and estimated scrap value. Remaining useful lives of vessels are periodically reviewed and revised to recognize changes in conditions and such revisions, if any, are recognized over current and future periods. The Company estimates that its vessels have a useful life of 25 years from the completion of their construction. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted. The estimated salvage value of each vessel is $250 per light weight ton as of December 31, 2022 and 2023.

Insurance claims and insurance proceeds

Claims receivable are recorded on the accrual basis and represent the amounts to be received, net of deductibles incurred through each balance sheet date, for which recovery from insurance companies is probable and the claim is not subject to litigation. Any remaining costs to complete the claims are included in accrued liabilities. Insurance proceeds are recorded according to type of claim that gives rise to the proceeds in the consolidated statements of operations and the consolidated statements of cash flow.

Revenue and expense recognition

Revenues are generated mainly from time charter agreements or infrequently from voyage charter agreements. Under a time charter agreement a contract is entered into for the use of a vessel for a specific period of time and a specified daily fixed or index-linked charter hire rate. Under a voyage charter agreement, a contract is made in the spot market for the use of a vessel for a specific voyage to transport a specified agreed upon cargo at a specified freight rate per ton or occasionally a lump sum amount. Under a voyage charter agreement, the charter party generally has a minimum amount of cargo and the charterer is liable for any short loading of cargo or “dead” freight.

A minor part of the Company’s revenues may also be generated from pool arrangements. For the vessel that operated under pool arrangement during the year ended December 31, 2021 the Company does not consider itself the principal, primarily because of its lack of control over the service to be transferred to the charterer under those charter party agreements and therefore related revenues and expenses are presented net.

F- 16

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

In particular, the pool manager calculates the net pool revenues using gross revenues less voyage expenses of all the pool vessels and less the general and administrative expenses of the pool and distributes the net pool revenues as time charter hire to participants based on an agreed upon formula, which is determined by pool points awarded to each vessel in the pool (vessel attributes such as age, design, cargo carrying capacity, fuel consumption and speed are taken into consideration) as well as the number of days the vessel participated in the pool in the period. The Company recognizes net pool revenues on a monthly basis, when the vessel has participated in the pool during the period and the amount of net pool revenues for the period can be estimated reliably. Revenue generated from the pool is accounted for as revenue from operating leases, pursuant to the accounting standard on leases (ASC 842), as further described below.

A time charter is a contract for the use of a vessel for a specific period of time and a specified daily fixed or index-linked charter hire rate, which is generally payable 15 or 30 days in advance as determined in the charter party agreement. The duration of the contracts that the Company enters into depends on the market conditions, with the duration decreasing during weak market conditions. During 2021, 2022 and 2023 the duration of the Company’s time charter contracts ranged from 12 days to 3 years. Time charter 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. As of December 31, 2023, all of the Company’s time charter agreements have remaining terms ranging from less than a month to 14 months based on the minimum duration of the time charter contracts and do not include any renewal options. A time charter generally provides typical warranties and owner protective restrictions. The Company’s time charter agreements are classified as operating leases pursuant to ASC 842, because (i) the vessel is an identifiable asset, (ii) the Company does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the economic benefits from such use. In a time charter contract, the Company is responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubricants. The charterer bears the voyage related costs such as bunker expenses, port charges and canal tolls during the hire period.

F- 17

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies –Continued
---	---

The Company, making use of the practical expedient for lessors, elected not to separate the lease and non-lease components included in the time charter revenue because the pattern of revenue recognition for the lease and non-lease components (included in the daily hire rate) is the same and the lease component, if accounted for separately, would be classified as an operating lease. The nature of the lease component and non-lease component that are combined as a result of applying the respective practical expedient are the hire rate for a bareboat charter as well as the compensation for expenses incurred running the vessel such as crewing expense, repairs, insurance, maintenance and lubricants. The lease component is the predominant component and the Company accounts for the combined component as an operating lease in accordance with ASC 842.

Both the lease component and non-lease component are earned by the passage of time. Revenues under a time charter contract are recognized on a straight-line basis over the term of the respective time charter agreements, beginning when the vessel is delivered to the charterer until it is redelivered back to the Company, and are recorded in “Time charter revenue” in the consolidated statements of operations. Time charter agreements mayinclude ballast bonus payments made by the charterer which serve as compensation for the ballast trip of the vessel to the delivery port, which are deferred and also recognized on a straight line basis over the charter period.

The Company has determined that its voyage charter agreements do not contain a lease because the charterer under such contracts does not have the right to control the use of the vessel since the Company, as the ship-owner, retains control over the operations of the vessel, provided also that the terms of the voyage charter are pre-determined, and any change requires the Company’s consent and are therefore considered service contracts that fall under the provisions of ASC 606 “Revenue from contracts with customers”. The Company accounts for a voyage charter when all the following criteria are met: (i) the parties to the contract have approved the contract in the form of a written charter agreement or fixture recap and are committed to perform their respective obligations, (ii) the Company can identify each party’s rights regarding the services to be transferred, (iii) the Company can identify the payment terms for the services to be transferred, (iv) the charter agreement has commercial substance (that is, the risk, timing, or amount of the future cash flows is expected to change as a result of the contract) and (v) it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the services that will be transferred to the charterer. The majority of revenue from voyage charter agreements is usually collected in advance. The Company has determined that there is one single performance obligation for each of its voyage contracts, which is to provide the charterer with an integrated transportation service within a specified time period. In addition, the Company has concluded that a contract for a voyage charter meets the criteria to recognize revenue over time because the charterer simultaneously receives and consumes the benefits of the Company’s performance as the Company performs. Therefore, since the Company’s performance obligation under each voyage contract is met evenly as the voyage progresses, revenue is recognized on a straight line basis over the voyage days from the loading of cargo to its discharge.

F- 18

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Demurrage income, which is considered a form of variable consideration, is included in voyage revenues, and represents payments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter agreements. Demurrage income for the year ended December 31, 2023 was not material.

Charter fees received in advance are recorded as a liability (deferred revenue) until charter services are rendered.

Vessel operating expenses are comprised of all expenses relating to the operation of the vessels, including crewing, insurance, repairs and maintenance, stores, lubricants, spares and consumables, professional and legal fees and miscellaneous expenses. Vessel operating expenses are recognized as incurred; payments in advance of services or use are recorded as prepaid expenses. Under time charter agreements, voyage expenses which are also recognized as incurred by the Company include costs for draft surveys, hold cleaning, postage, extra war risk insurance and other minor miscellaneous expenses related to the voyage. The charterer is responsible for paying the cost of bunkers and other voyage expenses whilst the vessel is on time charter. Certain voyage expenses paid by the Company, such as extra war risk insurance and holds cleaning may be recovered from the charterer; such amounts recovered are recorded as other income within “Time charter revenue” in the consolidated statements of operations.

Under voyage charter agreements, all voyage costs are borne and paid by the Company. Voyage expenses consist primarily of bunker consumption, port and canal expenses and agency fees related to the voyage. All voyage costs are expensed as incurred with the exception of the contract fulfilment costs that incur from the later of the end of the previous vessel employment and the contract date and until the commencement of loading the cargo on the relevant vessel, which are capitalized to the extent the Company, in its reasonable judgement, determines that they (i) are directly related to a contract, (ii) will be recoverable and (iii) enhance the Company’s resources by putting the Company’s vessel in a location to satisfy its performance obligation under a contract pursuant to the provisions of ASC 340-40 “Other assets and deferred costs”. These capitalized contract fulfilment costs are recorded under “Other receivables” and are amortized on a straight-line basis as the related performance obligations are satisfied.

Commissions (address and brokerage), regardless of charter type, are always paid by the Company, are deferred and amortized over the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompanying consolidated statements of operations.

Dry-docking and special survey expenses

Dry-docking and special survey expenses are expensed as incurred.

Pension and retirement benefit obligations – crew

The ship-owning companies contract the crews on board the vessels under short-term contracts (usually up to 9 months). Accordingly, they are not liable for any pension or post-retirement benefits.

F- 19

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Financing costs

Fees paid to lenders or required to be paid to third parties on the lenders’ behalf for obtaining new loans or for refinancing or amending existing loans, are required to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, similar to debt discounts. These costs are amortized as interest and other financing costs over the duration of the underlying loan using the effective interest method. Any unamortized balance of costs relating to debt repaid or refinanced that meet the criteria for Debt Extinguishment pursuant to the provisions of Subtopic 470-50 “Modifications and Extinguishments”, is expensed in the period in which the repayment is made or refinancing occurs. Any unamortized balance of costs relating to debt refinanced that do not meet the criteria for Debt Extinguishment, are amortized over the term of the refinanced debt.

Offering expenses

Expenses directly attributable to an equity offering are deferred and are either presented against paid-in capital when the equity proceeds from the offering are received or are written-off and charged to “General and administrative expenses” in the consolidated statements of operations when it is probable that the offering will be aborted.

Share repurchases

The Company records the repurchase of its common shares at cost. Until their retirement these common shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury shares are included in authorized and issued shares but excluded from outstanding shares.

Stock incentive plan awards

Share-based compensation represents vested and non-vested restricted shares granted to officers and directors as well as to non-employees and are included in “General and administrative expenses” in the consolidated statements of operations. The shares to employees and directors as well as to non-employees are measured at their fair value equal to the market value of the Company’s common stock on the grant date. The shares that do not contain any future service vesting conditions are considered vested shares and the total fair value of such shares is expensed on the grant date. The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and the total fair value of such shares is recognized on a straight-line basis over the requisite service period. Further, the Company accounts for restricted share award forfeitures upon occurrence.

F- 20

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Impairment of vessels

The Company reviews its vessels held for use for impairment whenever events or changes in circumstances indicate that the carrying amount of the vessels may not be recoverable. If indicators of impairment are present, the Company performs an analysis of the future undiscounted net operating cash flows of the related vessels. When the estimate of future undiscounted net operating cash flows, excluding interest charges, expected to be generated by the use and eventual disposition of the vessel is less than its carrying amount, the Company records a charge under “Impairment loss” in the consolidated statement of operations, to reduce the vessel’s carrying value to its fair market 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.

In developing its estimates of future undiscounted net operating cash flows, the Company makes assumptions and estimates about vessels’ future performance, with the assumptions being related to charter rates, fleet utilization, vessel operating expenses, drydocking costs, vessels’ residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations.

The Company determines the rates to be used in its impairment analysis based on the prevailing market charter rates for the first two years and on inflation-unadjusted historical average rates, from the third year onwards. As of December 31, 2023, there were indicators of impairment for three of the Company’s vessels. As of December 31, 2023, the Company calculated the historical average rates over a 15-year period for 2023 and takes into account complete market cycles. These rates are used for the period a vessel is not under a charter contract; if there is a contract, the charter rate of the contract is used for the period of the contract. Vessel utilization estimates are based on the status of each vessel at the time of the assessment and the Company’s past experience in finding employment for its vessels at comparable market conditions. Cost estimates, like drydocking and operating costs, are based on the Company’s data for its own vessels. Specifically, the Company’s management uses the Company’s internal budget for operating expenses escalated by 2.0% per annum and the Company’s budgeted drydocking costs, assuming a five-year special survey cycle. The estimated salvage value of each vessel is $250 per light weight ton, in accordance with the Company’s vessel depreciation policy. The Company uses a probability weighted approach for developing estimates of future cash flows used to test its vessels for recoverability when alternative uses are under consideration (i.e. sale or continuing operation of a vessel).

F- 21

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
2.	Significant Accounting Policies - Continued
---	---

Derivative financial instruments

Derivative financial instruments are recorded in the balance sheet as either an asset or liability measured at its fair value with changes in the instruments’ fair value recognized as either a component in other comprehensive income if specific hedge accounting criteria are met in accordance with guidance relating to “Derivatives and Hedging” or in earnings if hedging criteria are not met.

Evaluation of purchase transactions

When the Company enters into an acquisition transaction, it determines whether the acquisition transaction was the purchase of an asset or a business based on the facts and circumstances of the transaction. In accordance with Business Combinations (Topic 805): Clarifying the Definition of a Business, if substantially all of the fair value of the gross assets acquired in an acquisition transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. To be considered a business, a set must include an input and a substantive process that together significantly contribute to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized.

Earnings / (loss) per common share

Basic earnings / (loss) per share is computed by dividing net income / (loss) attributable to controlling shareholders, after the deduction of dividends paid (in cash or in-kind) to preferred shareholders, if any, by the weighted-average number of common shares outstanding during the period. The weighted-average number of common shares outstanding does not include any potentially dilutive securities or any non-vested restricted shares of common stock. These non-vested restricted shares, although classified as issued and outstanding as of December 31, 2022 and 2023, are considered contingently returnable until the restrictions lapse and are not included in the basic earnings / (loss) per share attributable to controlling shareholders calculation until the shares are vested.

Diluted earnings / (loss) per share gives effect to all potentially dilutive securities to the extent that they are dilutive, using the treasury stock method. The Company uses the treasury stock method for non-vested restricted shares, while for the preferred shares issued the Company uses the if-converted method to assess the dilutive effect.

F- 22

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)

Segment reporting

The Company reports financial information and evaluates its operations by total charter revenues and not by the type of vessel, length of vessel employment, customer or type of charter. As a result, management, including 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, that of operating drybulk vessels. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable.

Recent accounting pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, and an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 also requires that all segment-related disclosures required by FASB Topic 280 (Segment Reporting) be made by entities that have a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company does not believe the adoption of ASU No. 2023-07 will have a material effect on its financial position, results of operations and cash flows.

F- 23

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
3.	Inventories
---	---

Inventories consisted of the following:

	December 31, 2022		December 31, 2023
Lubricants		1,057,652		1,370,033
Bunkers		-		2,747,630
Total	****	1,057,652	****	4,117,663

F- 24

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
4.	Vessels, net
---	---

The amounts in the accompanying consolidated balance sheets are as follows:

	Cost			Accumulated<br> <br>Depreciation			Net Book<br> <br>Value
Balance, January 1, 2022	****	175,645,852		****	(47,153,033	)	****	128,492,819
- Depreciation for the year		-			(10,757,177	)		(10,757,177	)
- Vessel acquisitions and improvements		37,802,299			-			37,802,299
- Sale of vessel		(28,079,236	)		21,563,318			(6,515,918	)
Balance, December 31, 2022	****	185,368,915		****	(36,346,892	)	****	149,022,023
- Depreciation for the year		-			(10,966,621	)		(10,966,621	)
- Vessel acquisitions and improvements		65,472,714			-			65,472,714
Balance, December 31, 2023	****	250,841,629		****	(47,313,513	)	****	203,528,116

During the year ended *December 31, 2022,*M/V “Tasos” completed the installation of its Water Ballast Treatment system onboard for a total cost of $0.61 million. For the year ended December 31, 2022, certain of the Company’s vessels were equipped with a number of smart monitoring systems for a total cost of $0.22 million. The Company continued the installation of smart monitoring systems within 2023 as well for total cost of $0.13 million. All these installations were qualified as vessel improvements and were therefore capitalized.

Vessels acquired / delivered

On January 12, 2022, Molyvos Shipping Ltd. signed a memorandum of agreement to purchase M/V “Molyvos Luck”, a 57,924 DWT 2014-built drybulk carrier, for a purchase price plus costs to make the vessel available for use of $21,214,125. M/V “Molyvos Luck” was delivered to the Company on February 11, 2022.

On April 18, 2022, Santa Cruz Shipowners Ltd. signed a memorandum of agreement to purchase M/V “Santa Cruz”, a 76,440 DWT 2005-built drybulk carrier, for a purchase price plus costs to make the vessel available for use of $15,754,264. M/V “Santa Cruz” was delivered to the Company on April 20, 2022.

On September 8, 2023, Yannis Navigation Ltd. signed a memorandum of agreement to purchase M/V “Yannis Pittas”, a 63,177 DWT 2014-built drybulk carrier, for a purchase price plus costs to make the vessel available for use of $21,144,816. M/V “Yannis Pittas” was delivered to the Company on October 10, 2023.

On September 8, 2023, Christos Ultra LP., signed a memorandum of agreement to purchase M/V “Christos K”, a 63,197 DWT 2015-built drybulk carrier, for a purchase price plus costs to make the vessel available for use of $22,095,232. M/V “Christos K” was delivered to the Company on October 25, 2023.

F- 25

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
4.	Vessels, net - Continued
---	---

On September 8, 2023, Maria Ultra LP., signed a memorandum of agreement to purchase M/V “Maria”, a 63,153 DWT 2015-built drybulk carrier, for a purchase price plus costs to make the vessel available for use of $22,103,421. M/V “Maria” was delivered to the Company on November 6, 2023.

Sale of vessels

On September 8, 2022, Pantelis Shipping Corp. signed a memorandum of agreement to sell M/V “Pantelis” a 74,020 DWT 2000-built drybulk carrier, for an amount, net of expenses paid, of $9,372,443. M/V “Pantelis” was delivered to her new owners on October 17, 2022. The Company decided to sell this vessel to concentrate its drybulk fleet on more modern, eco-built, fuel-efficient vessels, in alignment with its overall Environmental, Social and Governance (“ESG”) strategy. The Company recorded a gain on sale of $2,856,525, presented in the “Net gain on sale of vessel” line in the “Operating Expenses” section of the consolidated statement of operations for the year ended December 31, 2022.

Impairment analysis

In light of the prevailing conditions in the shipping industry, as of December 31, 2022 and 2023, the Company performed the undiscounted cash flow test for those operating vessels whose carrying values were above their respective market values and determined that the net book value of its vessels held for use was recoverable.

As of December 31, 2023, all vessels are mortgaged as collateral under the Company’s loan agreements (see Note 7).

F- 26

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
5.	Accrued Expenses
---	---

The accrued expenses consist of:

	December 31, 2022		December 31, 2023
Accrued payroll expenses		61,714		342,056
Accrued interest expense		500,664		877,635
Accrued general and administrative expenses		107,755		107,197
Accrued commissions		71,139		91,277
Other accrued expenses		263,447		902,441
Total	****	1,004,719	****	2,320,606

F- 27

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
6.	Related Party Transactions
---	---

Each of the Company’s vessel owning companies is party to a management agreement with one of the Managers (see Note 1), both of which are controlled by members of the Pittas family, whereby the Managers provide technical and commercial vessel management for a fixed daily management fee (see below), under the Company’s Master Management Agreements (“MMAs”). An additional fixed management fee (see below) is paid to the Managers for the provision of management executive services.

The Company’s MMAs with the Managers provide for an annual adjustment of the daily vessel management fee due to inflation to take effect January 1of each year. The vessel management fee for laid-up vessels is half of the daily fee for the period they are laid-up. The MMA is terminable by Eurobulk only for cause or under other limited circumstances, such as sale of the Company or Eurobulk or the bankruptcy of either party. The MMAs, as periodically amended and restated, will automatically be extended after the initial five-year period for an additional five-year period unless terminated on or before the 90th day preceding the initial termination date. Pursuant to the MMAs, each ship owning company has signed – and each future ship owning company when a vessel is acquired will sign - with one of the Managers, a management agreement with the rate and term of these agreements set in the MMA effective at such time.

EuroDry signed new MMAs with the Managers which took effect after the completion of the Spin-off for an additional five-year term until May 30, 2023on substantially the same terms as the MMA between Euroseas and Eurobulk relating to the vessels that were previously owned by Euroseas. For the year ended December 31, 2021, the daily management fee amounted to Euro 685 per vessel in operation and Euro 342.5 per day per vessel in lay-up for the year ended December 31, 2021, to be adjusted annually for inflation in Eurozone. From *January 1, 2022,*the vessel fixed management fee was adjusted for inflation at Euro 720 per day per vessel in operation and Euro 360 per day per vessel in lay-up and the MMA was extended for a further five-year term until January 1, 2028. From *January 1, 2023,*the vessel fixed management fee was adjusted for inflation at Euro 775 (approximately $853, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in operation and Euro 387.5 (approximately $426, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in lay-up. From *January 1, 2024,*the vessel fixed management fee was adjusted for inflation at Euro 810 (approximately $891, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in operation and Euro 405 (approximately $446, using the exchange rate as of December 31, 2023, which was $1.10 per euro) per day per vessel in lay-up.

Vessel management fees paid to the Managers amounted to $2,350,747, $2,968,073 and $3,281,361 in 2021, 2022 and 2023, respectively, and are recorded under “Related party management fees” in the consolidated statements of operations.

F- 28

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
6.	Related Party Transactions - Continued
---	---

The vessels M/V “Xenia”, M/V “Alexandros P.”, M/V “Tasos”, M/V “Ekaterini”, M/V “Maria” and M/V “Christos K” are managed by Eurobulk FE, which provides technical, commercial and accounting services for the same daily vessel management fee as noted above. The remaining fleet of the Company (M/V “Eirini P.”, M/V “Good Heart”, M/V “Blessed Luck”, M/V “Starlight”, M/V “Molyvos Luck”, M/V “Santa Cruz” and M/V “Yannis Pittas”) is managed by Eurobulk.

In addition to the vessel management services, the Manager provides executive services to the Company. The amount of executive compensation was $1,250,000 for the years ended December 31, 2021 and 2022. The executive management fee is adjusted annually for Eurozone inflation every January 1. For the year ended December 31, 2023 the amount for the executive compensation, before bonuses, was increased to $1,350,000 to account for inflation. For the year 2024 the amount for the executive compensation, before bonuses, was increased to $1,400,000 to account for inflation. For the years ended December 31, 2021, 2022 and 2023, the Company paid an additional special bonus to the Manager’s employees, affiliated subcontractors and consultants of $460,000, $210,000 and nil, respectively, for a total amount of executive management fees of $1,710,000, $1,460,000 and $1,350,000, respectively These amounts are recorded in “General and administrative expenses” in the consolidated statements of operations.

Amounts due to or from related companies represent net disbursements and collections made on behalf of the ship-owning companies by the Managers during the normal course of operations for which a right of off-set exists. As of December 31, 2022, the amount due from related companies was $2,416,180. As of December 31, 2023 the amount due to related companies was $577,542. Based on the MMAs, an estimate of the quarter’s operating expenses, expected dry-dock expenses, vessel management fee and fee for management executive services are to be advanced by the Company’s ship-owning subsidiaries in the beginning of the quarter or at the end of the previous quarter to the respective Manager.

The Company uses brokers for various services, as is industry practice. Eurochart S.A. (“Eurochart”), a company controlled by certain members of the Pittas family, provides vessel sale and purchase services, and chartering services to the Company whereby the Company pays commission of 1% of the vessel sales price and 1.25% of charter revenues. A commission of 1% of the purchase price is also paid to Eurochart by the seller of the vessel for acquisitions the Company makes using Eurochart’s services. During 2021, the Company paid to Eurochart commissions of $365,000 for the acquisitions of M/V “Blessed Luck” and M/V “Good Heart”, which were agreed to be paid by the buyers, as per the relevant memoranda of agreement entered into with the sellers, and are capitalized as part of the vessel cost. During 2022, the Company paid to Eurochart commissions of $210,000 for the acquisition of M/V “Molyvos Luck” which is capitalized as part of the vessel cost. In *April 2022,*the Company withheld the amount of $157,500 from the sellers of M/V “Santa Cruz”, on behalf of Eurochart, as a 1% commission in connection with the acquisition of the vessel. Commission paid by the Company to Eurochart for the sale of M/V Pantelis amounted to $96,750 in 2022, recorded in “Net gain on sale of vessel” in the consolidated statement of operations. In October and *November 2023,*the Company withheld the amount of $650,000 from the sellers of M/V “Maria”, M/V “Christos K” and M/V “Yannis Pittas”, on behalf of Eurochart, as a 1% commission in connection with the acquisition of the vessels. Commissions to Eurochart for chartering services totaled $856,334, $932,123 and $630,433 in 2021, 2022 and 2023, respectively, recorded in “Commissions” in the consolidated statements of operations.

F- 29

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
6.	Related Party Transactions - Continued
---	---

Certain members of the Pittas family, together with another unrelated ship management company, have formed a joint venture with the insurance broker Sentinel Maritime Services Inc. (“Sentinel”). Technomar Crew Management Services Corp (“Technomar”) is a company owned by certain members of the Pittas family, together with another unrelated ship management company, which provides crewing services. Sentinel is paid a commission on insurance premiums not exceeding 5%; Technomar is paid a fee of about $50 per crew member per month. Total fees charged by Sentinel and Technomar were $43,478 and $86,906 in 2021, $69,205 and $138,397 in 2022, and $63,237 and $128,418 in 2023, respectively. These amounts are recorded in “Vessel operating expenses” in the consolidated statements of operations.

On October 13, 2023 Christos Ultra LP and Maria Ultra LP, owners of M/V “Christos K” and M/V “Maria”, signed with Eurobulk Ltd. an administration contract under which Eurobulk Ltd. will receive an amount of $15,000 per business year in order to provide various accounting and business transactions. The amount of $4,600 calculated pro rata for the year 2023 was paid to Eurobulk Ltd. in April 2024. Additionally Christos Ultra LP and Maria Ultra LP, paid a lump sum fee of $110,000 to Eurobulk Ltd. for its assistance to secure the financing of the two vessels. The specific amount was recorded as a loan arrangement fee paid for the year ended December 31, 2023.

On *May 10, 2021,*the Company reached an agreement with a related party, Ergina Shipping Ltd. (“Ergina”), a company controlled by the Pittas family and affiliated with the Company’s Chief Executive Officer, to draw a loan of $6,000,000, which was used by the Company to partly finance the acquisition of M/V “Blessed Luck”. The loan was set to mature on *May 31, 2022.*The interest rate applied was 8% per annum. Interest on the loan was payable quarterly. Within 2021 the Company paid $79,533 for interest. On *June 4, 2021,*Ergina exercised its right to convert part of the outstanding balance of the loan, amounting to $3,300,000, into the Company’s common shares as per the terms of the loan agreement. As a result, on *June 4, 2021,*the Company issued 180,308 shares to Ergina. The conversion price was the lowest closing price over the fifteen business days prior to the conversion notice as per the terms of the loan, amounting to approximately $18.30 per share. The Company incurred a loss on the extinguishment of the above debt of $1,647,654, deriving from the difference between the conversion price and the closing price of the Company’s common shares on the Nasdaq Capital Market on the date of issuance of approximately $27.44 per share. This amount is recorded under “Loss on debt extinguishment” in the consolidated statement of operations for the year ended *December 31, 2021.*The remaining amount of $2,700,000 was repaid earlier than scheduled on September 29, 2021.

F- 30

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans
---	---

These consist of bank loans of the ship-owning companies and are as follows:

Borrower		December 31, 2022			December 31, 2023
Kamsarmax Two Shipping Ltd.	(a)		11,950,000			13,520,000
Kamsarmax One Shipping Ltd. / Ultra One Shipping Ltd.	(b)		23,200,000			21,200,000
Eirini Shipping Ltd.	(c)		3,530,000			2,690,000
Light Shipping Ltd. / Good Heart Shipping Ltd.	(d)		17,000,000			14,600,000
Blessed Luck Shipowners Ltd.	(e)		4,750,000			3,750,000
Areti Shipping Ltd.	(f)		2,400,000			1,000,000
Molyvos Shipping Ltd. / Santa Cruz Shipowners Ltd.	(g)		19,025,000			15,575,000
Yannis Navigation Ltd.	(h)		-			10,500,000
Christos Ultra LP. / Maria Ultra LP.	(i)		-			22,000,000
			81,855,000			104,835,000
Less: Current portion			(23,040,000	)		(18,050,000	)
Long-term portion		****	58,815,000		****	86,785,000
Deferred charges, current portion			181,913			245,447
Deferred charges, long-term portion			454,831			661,937
Long-term bank loans, current portion net of deferred charges		****	22,858,087		****	17,804,553
Long-term bank loans, long-term portion net of deferred charges		****	58,360,169		****	86,123,063

The future annual loan repayments are as follows:

To December 31:
2024	18,050,000
2025	9,650,000
2026	9,670,000
2027	46,965,000
2028	3,000,000
Thereafter	17,500,000
Total	104,835,000

F- 31

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans - Continued
---	---
(a)	On April 27, 2018, the Company signed a term loan facility with HSBC Bank Plc. and a loan of $18.4 million was drawn by Kamsarmax Two Shipping Ltd. on April 30, 2018 to finance 70% of the construction cost but no more than 70% of the market value of M/V “Ekaterini”, subject to the existence of a time charter at the time of drawdown for a minimum period of 24 months approved by the lender. The loan was payable in twenty consecutive quarterly installments commencing from July 2018, eight in the amount of $400,000 and twelve in the amount of $325,000, with a $11,300,000 balloon payment to be paid together with the last installment in April 2023.The loan bore interest at LIBOR plus a margin of 2.80%. The loan was secured with (i) first priority mortgage over M/V “Ekaterini”, (ii) first assignment of earnings and insurance of M/V "Ekaterini" and (iii) other covenants and guarantees similar to the remaining loans of the Company. On March 3, 2023, the Company repaid the full amount of outstanding indebtedness amounting to $11,625,000 by using own funds. M/V “Ekaterini” was released from its mortgage.
---	---
On June 20, 2023, the Company signed a term loan facility with Hamburg Commercial Bank AG. and a loan of $14,000,000 was drawn by Kamsarmax Two Shipping Ltd. on June 23, 2023 to finance up to 52.5% of the market value of M/V “Ekaterini”. The loan is payable in sixteen consecutive quarterly installments of $240,000 each commencing from June 2023, with a $10,160,000 balloon payment to be paid together with the last installment in June 2027. The loan bears interest at term Secured Overnight Financing Rate (“term SOFR”) plus a margin of 2.50%. The loan is secured with (i) first priority mortgage over M/V “Ekaterini”, (ii) first assignment of earnings and insurance of M/V "Ekaterini" and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 125%. The Company paid loan arrangement fees of $126,000 for this loan.
---
(b)	On January 27, 2021, the Company signed a term loan facility with Eurobank S.A. for an amount of up to $26,700,000, in order to refinance the existing indebtedness of M/V “Xenia” and M/V “Alexandros P.”, amounting to $22,482,000 as of the date of refinancing, and for working capital purposes, including the partial redemption of the Company’s Series B Preferred Shares. The facility was available in two tranches. The first tranche of $13,815,000 was drawn on January 27, 2021 and the second tranche of $12,885,000 was drawn on January 29, 2021 by Kamsarmax One Shipping Ltd. and Ultra One Shipping Ltd. as the borrowers. The loan is payable in twenty-four consecutive quarterly instalments of $500,000 each, followed by a balloon payment of $14,700,000 to be paid together with the last installment in January 2027. The loan bears interest at SOFR plus credit adjustment spread plus a margin of 2.75%. The loan is secured with the following: (i) first priority mortgages over M/V “Xenia” and M/V “Alexandros P.”, (ii) first assignment of earnings and insurance of the abovementioned vessels and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 120%. The Company paid loan arrangement fees of $300,000 for this loan.
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F- 32

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans - Continued
---	---
(c)	On February 22, 2021, the Company signed a term loan facility with Sinopac Capital International (HK) Limited for an amount of up to $5,000,000, in order to refinance the existing indebtedness of M/V “Eirini P”, amounting to $3,300,000 as of the date of the refinancing, and for working capital purposes. An aggregate amount of $5,000,000 was drawn on February 24, 2021 by Eirini Shipping Ltd. as the borrower. The loan is payable in twenty consecutive quarterly instalments of $210,000 each, followed by a balloon payment of $800,000 to be paid together with the last installment in February 2026. The loan bears interest at SOFR plus credit adjustment spread plus a margin of 3.60%. The loan is secured with the following: (i) first priority mortgage over M/V “Eirini P”, (ii) first assignment of earnings and insurance of the abovementioned vessel and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 120%. The Company paid loan arrangement fees of $100,000 for this loan.
---	---
(d)	On September 30, 2021, the Company signed a term loan facility with the National Bank of Greece S.A. (“NBG”) and a loan of $22,000,000 was drawn by Light Shipping Ltd. and Good Heart Shipping Ltd. in order to refinance the existing indebtedness of M/V “Starlight”, amounting to $8,700,000 as of the date of the refinancing, and to post-delivery finance part of the acquisition cost of M/V “Good Heart”. The loan is payable in twenty four consecutive quarterly instalments, comprising four installments of $1,100,000 and eight installments of $600,000, followed by an interim balloon payment of $2,400,000 payable together with the 12th installment, then four installments of $200,000, six installments of $150,000 and two last installments of $100,000, followed by a balloon payment of $8,500,000 to be paid together with the last installment in September 2027. The loan bears interest at SOFR plus credit adjustment spread plus a margin of 2.75%. The loan is secured with the following: (i) first priority mortgages over M/V “Starlight” and M/V “Good Heart”, (ii) first assignment of earnings and insurance of the abovementioned vessels and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 125%. The Company paid loan arrangement fees of $176,000 for this loan.
---	---
(e)	On August 12, 2021, the Company signed a term loan facility with Piraeus Bank S.A. and drew a loan of $8,000,000 for Blessed Luck Shipowners Ltd., in order to post-delivery finance part of the acquisition cost of M/V “Blessed Luck”. The loan is payable in twelve consecutive quarterly instalments, the first four in the amount of $750,000 each and the next eight in the amount of $250,000 each, followed by a balloon payment of $3,000,000 to be paid together with the last installment in August 2024. The loan bears interest at SOFR plus credit adjustment spread plus a margin of 2.70%. The loan is secured with the following: (i) first priority mortgage over M/V “Blessed Luck”, (ii) first assignment of earnings and insurance of the abovementioned vessel and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 125%. The Company paid loan arrangement fees of $72,000 for this loan.
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F- 33

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans - Continued
---	---
(f)	On October 6, 2021, the Company signed a term loan facility with Chailease International Financial Services (Singapore) PTE. LTD. and on October 14, 2021 a loan of $9,000,000 was drawn by Areti Shipping Ltd. and Pantelis Shipping Ltd. in order to refinance the existing indebtedness of M/V “Tasos” and M/V “Pantelis”. The loan is payable in thirty-six consecutive monthly instalments, the first eighteen in the amount of $300,000 and the next eighteen in the amount of $200,000 each. The loan bears interest at SOFR plus a margin of 3.50%. In October 2022, the Company sold M/V “Pantelis” used as a collateral to the loan. The amount of $2,850,000 was prepaid and the vessel was released from its mortgage. Following the above prepayment, the monthly principal installments were reduced to $150,000 until April 2023, followed by eighteen monthly instalments of $100,000 each. The loan is secured with the following: (i) first priority mortgage over M/V “Tasos”, (ii) first assignment of earnings and insurance of M/V “Tasos” and (iii) other covenants and guarantees similar to the remaining loans of the Company. The Company paid loan arrangement fees of $112,500 for this loan.
---	---
(g)	On September 30, 2022, the Company signed a term loan facility with Piraeus Bank S.A. and a loan of $20,000,000 was drawn by Molyvos Shipping Ltd. and Santa Cruz Shipowners Ltd. in order to post-delivery finance part of the acquisition cost of M/V “Molyvos Luck and M/V “Santa Cruz”. The loan is payable in twenty consecutive quarterly installments, the first four instalments in the amount of $975,000 each and the next sixteen in the amount of $525,000 each, followed by a balloon instalment of $7,700,000, payable together with the last instalment. The loan bears interest at term SOFR plus credit adjustment spread plus a margin of 2.25%. The loan is secured with the following: (i) first priority mortgages over M/V “Molyvos Luck” and M/V “Santa Cruz”, (ii) first assignment of earnings and insurance of the abovementioned vessels and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 125%. The Company paid loan arrangement fees of $150,000 for this loan.
---	---
(h)	On October 12, 2023, the Company signed a term loan facility with Eurobank S.A. and a loan of $10,500,000 was drawn by Yannis Navigation Ltd. in order to finance part of the acquisition cost of M/V “Yannis Pittas”. The loan is payable in twenty four consecutive quarterly installments, of $250,000, followed by a balloon instalment of $4,500,000, payable together with the last instalment. The loan bears interest at term SOFR plus a margin of 2.0%. The loan is secured with the following: (i) first priority mortgage over M/V “Yannis Pittas”, (ii) first assignment of earnings and insurance of the abovementioned vessel and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 120%. The Company paid loan arrangement fees of $78,750 for this loan.
---	---

F- 34

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans - Continued
---	---
(i)	On October 23, 2023, the Company signed a term loan facility with Eurobank S.A. and a loan of $22,000,000 was drawn by Christos Ultra LP. and Maria Ultra LP. in order to finance part of the acquisition cost of M/V “Christos K” and M/V “Maria”. The loan is payable in twenty four consecutive quarterly installments, of $500,000, followed by a balloon instalment of $10,000,000, payable together with the last instalment. The loan bears interest at term Secured Overnight Financing Rate (“term SOFR”) plus a margin of 2.1%. The loan is secured with the following: (i) first priority mortgages over M/V “Christos K” and M/V “Maria”, (ii) first assignment of earnings and insurance of the abovementioned vessels and (iii) other covenants and guarantees similar to the remaining loans of the Company. The security cover ratio covenant for this facility stands at 120%. The Company paid loan arrangement fees of $165,000 for this loan.
---	---

In addition to the terms specific to each loan described above, all the above loans are secured with a pledge of all the issued shares of each borrower.

The loan agreements also contain covenants such as minimum requirements regarding the security cover ratio covenant (the ratio of fair value of vessel to outstanding loan less cash in retention accounts), restrictions as to changes in management and ownership of the ship-owning companies, distribution of profits or assets (i.e. not permitting dividend payment or other distributions in cases that an event of default has occurred), additional indebtedness and mortgage of vessels without the lender’s prior consent, sale of vessels, maximum fleet-wide leverage, sale of capital stock of the Company’s subsidiaries, ability to make investments and other capital expenditures, entering in mergers or acquisitions, minimum cash balance requirements and minimum cash retention accounts (restricted cash). The loan agreements also require the Company to make deposits in retention accounts with certain banks that can only be used to pay the current loan installments. Minimum cash balance requirements are in addition to cash held in retention accounts. These cash deposits (including the cash collateral required under certain of the Company’s FFAs, as described in Note 13) amounted to $3,080,863 and $6,097,569 as of December 31, 2022 and 2023, respectively, and are included in “Restricted cash” under “Current assets” and “Long-term assets” in the consolidated balance sheets. As of December 31, 2023, all the debt covenants are satisfied.

The publication of U.S. Dollar LIBOR for the one-week and two-month U.S. Dollar LIBOR tenors ceased on December 31, 2021, and the ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, ceased all other U.S. Dollar LIBOR tenors on June 30, 2023. The United States Federal Reserve concurrently issued a statement advising banks to cease issuing U.S. Dollar LIBOR instruments after 2021. As such, any new debt agreements the Company entered into did not use LIBOR as an interest rate, and the Company transitioned its existing loan agreements and interest rate swap agreements from U.S. Dollar LIBOR to an alternative reference rate prior to June 2023.

F- 35

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
7.	Long-Term Bank Loans - Continued
---	---

In response to the anticipated discontinuation of LIBOR, the Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, selected an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.” SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. treasury repo market. SOFR is now the predominant interest rate being used across cash and derivatives markets and the one used following the transition away from LIBOR. The impact of such a transition from LIBOR to SOFR was not significant for the Company. In light of the transition the Company added fallback language to existing debt tied to LIBOR and in some cases agreed to pricing adjustments in its credit agreements. In particular, in certain cases the fallback language provides for the implementation of the so called “hardwire approach” where even the pricing adjustment (the Credit Adjustment Spread or “CAS”) is agreed to in advance, and in other cases the fallback language provides for a negotiation framework and timing in advance of the expected transition. As of December 31, 2023, the Company’s obligations under its credit facilities which accrue interest are based on SOFR.

Interest expense for the years ended December 31, 2021, 2022 and 2023 amounted to $2,040,694, $3,622,458 and $6,277,704, respectively.

8.	Income Taxes

Under the laws of the countries of the companies’ incorporation and/or vessels’ registration, the companies are not subject to tax on international shipping income, however, they are subject to registration and tonnage taxes, which have been included in “Vessel operating expenses” in the consolidated statements of operations.

Under the United States Internal Revenue Code of 1986, as amended (the "Code"), the U.S. source gross transportation income of a ship-owning or chartering corporation, such as the Company, is subject to a 4% U.S. Federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder. U.S. source gross transportation income consists of 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States.

Under the Code, a corporation will be exempt from U.S. federal income tax if its stock is primarily and regularly traded on an established securities market in its country of organization, in another country that grants an “equivalent exemption” to United States corporations, or in the United States, which is referred to as the “Publicly Traded Test”. Under IRS regulations, a Company’s shares will be considered to be regularly traded on an established securities market if (i) one or more classes of its shares representing 50% or more of its outstanding shares, by voting power of all classes of shares of the corporation entitled to vote and of the total value of the shares of the corporation, are listed on the market and (ii) (A) such class of shares is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or one sixth of the days in a short taxable year; and (B) the aggregate number of shares of such class of shares traded on such market during the taxable year must be at least 10% of the average number of shares of such class of shares outstanding during such year or as appropriately adjusted

F- 36

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
8.	Income Taxes - Continued
---	---

in the case of a short taxable year. Notwithstanding the foregoing, the treasury regulations provide, in pertinent part, that a class of the Company’s shares will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified share attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of such class of the Company’s outstanding shares (“5% Override Rule”).

For the taxable years 2021 the Company believes that it was exempt from U.S. federal income tax of 4% on U.S. source shipping income. For the taxable year 2022 and 2023, the Company believes that it was subject to the Five Percent Override Rule, but nonetheless satisfied the Publicly-Traded Test for the 2022 and 2023 taxable year because the nonqualified 5% Shareholders did not own more than 50% of our common stock for more than half of the days during the taxable year.

9.	Commitments and Contingencies

There are no material legal proceedings to which the Company is a party or to which any of its properties are subject, other than routine litigation incidental to the Company’s business. In the opinion of the management, the disposition of these lawsuits should not have a material impact on the consolidated results of operations, financial position and cash flows.

On April 29, 2023, M/V “Good Heart” was detained at Corpus Christi by the United States Coast Guard for certain deficiencies. The deficiencies were rectified, and the vessel was able to sail in early June 2023 after EuroDry provided two corporate guarantees for $ 2 million each on behalf of the owner and the manager of the vessel for alleged MARPOL violations. Due to the detention the vessel was off hire for about 48 days which resulted in the loss of the vessel’s laycan period and the cancelation of her charter fixture; additionally, a provision of $0.5 million was taken for anticipated costs relating to the incident presented as “Other operating loss” in the consolidated statement of operations for the year ended December 31, 2023, which further affected operating results. The Company and the Manager with the assistance of their US counsel are in active negotiations with the US Department of Justice in an effort to settle this matter out of court. As of the date of the issuance of these financial statements there is no pending litigation for the aforementioned incident.

As of December 31, 2023, future gross minimum revenues under non-cancellable time charter agreements total $9.7 million. The amount of $8.8 million is due in the year ending December 31, 2024 and another $0.9 million due in the year ending December 31, 2025. Future gross minimum revenues also include revenues deriving from an index linked charter agreement using the index rate at the commencement date of the agreement, in compliance with ASC 842. In arriving at the future gross minimum revenues, the Company has deducted an estimated one off-hire day per quarter plus estimated off-hire time required for scheduled intermediate and special surveys of the vessels, if applicable. Such off-hire estimate may not be reflective of the actual off-hire in the future. In addition, the actual revenues could be affected by early delivery of the vessel by the charterers or any exercise of the charterers’ options to extend the terms of the charters, which however cannot be estimated and hence not reflected above.

F- 37

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
10.	Stock Incentive Plan
---	---

In May 2018, the Company’s Board of Directors approved an equity incentive plan (the “May 2018 Plan”). The May 2018 Plan was administered by the Company’s Board of Directors which could make awards totaling in aggregate up to 150,000 shares over five years after the May 2018 Plan’s adoption date. In November 2022, the Company’s Board of Directors approved a subsequent equity incentive plan (the “November 2022 Plan”) after the shares of the May 2018 Plan were awarded. The November 2022 Plan will be also administered by the Company’s Board of Directors which can make awards totaling in aggregate up to 200,000 shares over five years after the November 2022 Plan’s adoption date. Officers, directors and employees (including any prospective officer or employee) of the Company and its subsidiaries and affiliates and consultants and service providers (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”) will be eligible to receive awards under the equity incentive plan. Awards may be made under the November 2022 Plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, unrestricted stock, restricted stock units and performance shares. Details of awards granted under the May 2018 Plan and November 2022 Plan are noted below.

F- 38

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
10.	Stock Incentive Plan - Continued
---	---

On November 4, 2019 an award of 24,710 non-vested restricted shares, was made to 17 key persons of which 50% vested on July 1, 2020 and 50% vested on July 1, 2021; awards to officers and directors amounted to 13,940 shares and the remaining 10,770 shares were awarded to employees of Eurobulk.

On November 5, 2020 an award of 44,900 non-vested restricted shares, was made to 15 key persons of which 50% vested on November 16, 2021 and the remaining 50% vested on November 16, 2022; awards to officers and directors amounted to 27,100 shares and the remaining 17,800 shares were awarded to employees of Eurobulk.

On November 19, 2021 an award of 49,650 non-vested restricted shares, was made to 21 key persons of which 50% vested on July 1, 2022 and the remaining 50% will vest on July 1, 2023; awards to officers and directors amounted to 27,700 shares and the remaining 21,950 shares were awarded to employees of Eurobulk.

On November 3, 2022 an award of 58,600 non-vested restricted shares, was made to 30 key persons of which 50% vested on November 16, 2023 and the remaining 50% will vest on November 15, 2024; awards to officers and directors amounted to 29,600 shares and the remaining 29,000 shares were awarded to employees of Eurobulk.

On November 10, 2023 an award of 59,100 non-vested restricted shares, was made to 31 key persons of which 50% will vest on July 1, 2024 and the remaining 50% will vest on July 1, 2025; awards to officers and directors amounted to 29,600 shares and the remaining 29,500 shares were awarded to employees of Eurobulk.

All non-vested restricted shares are conditional upon the grantee’s continued service as an employee of the Company or Eurobulk or as a director of the Company until the applicable vesting date. The grantee does not have the right to vote on such non-vested restricted shares until they vest or exercise any right as a shareholder of these shares, however, the non-vested shares will accrue dividends as declared and paid which will be retained by the Company until the shares vest, at which time they are payable to the grantee. As non-vested restricted share grantees accrue dividends on awards that are expected to vest, such dividends are charged to retained earnings.

F- 39

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
10.	Stock Incentive Plan - Continued
---	---

The compensation cost that has been charged against income for awards was $230,644, $788,725 and $797,984, for the years ended December 31, 2021, 2022 and 2023, respectively, and is included within “General and administrative expenses” in the consolidated statements of operations. The Company has used the straight-line method to recognize the cost of the awards. There were no forfeitures of non-vested shares during the years ended December 31, 2021, 2022 and 2023.

A summary of the status of the Company’s non-vested shares as of December 31, 2021, 2022 and 2023, and the movement during the years ended December 31, 2021, 2022 and 2023, are presented below:

Non-vested Shares
Non-vested on January 1, 2021	56,745		5.10
Granted	49,650		20.81
Vested	(34,295	)	5.62
Non-vested on December 31, 2021	72,100		15.67
Non-vested on January 1, 2022	72,100		15.67
Granted	58,600		13.95
Vested	(47,750	)	14.48
Non-vested on December 31, 2022	82,950		15.14
Non-vested on January 1, 2023	82,950		15.14
Granted	59,100		14.97
Vested	(53,650	)	15.79
Non-vested on December 31, 2023	88,400		14.63

As of December 31, 2023, there was $1,159,662 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the November 2022 Plan and is expected to be recognized over a weighted-average period of 0.784 years. The total fair value at grant-date of shares granted during the years ended December 31, 2021, 2022 and 2023 was $1,033,217, $817,470 and $884,727, respectively. The total fair value of shares vested based on the share price as of the date of vesting was $803,188, $919,772 and $791,881 during the years ended December 31, 2021, 2022 and 2023, respectively.

F- 40

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
11.	Earnings / (Loss) per Share
---	---

Basic and diluted earnings / (loss) per common share are computed as follows:

	2021			2022		2023
Income:	****	****	****	****	****	****	****	****
Net income / (loss)		31,153,821			33,542,671		(3,282,972	)
Dividends to Series B preferred shares		(1,085,902	)		-		-
Preferred deemed dividend		(665,287	)		-		-
Net loss attributable to the non-controlling interest		-			-		374,068
Net income / (loss) attributable to controlling shareholders		29,402,632			33,542,671		(2,908,904	)
Weighted average common shares – outstanding, basic		2,528,507			2,876,320		2,763,121
Basic earnings / (loss) per share		11.63			11.66		(1.05	)
Effect of dilutive securities:	****	****	****	****	****	****	****	****
Dilutive effect of non-vested shares		20,443			13,671		-
Weighted average common shares – outstanding, diluted		2,548,950			2,889,991		2,763,121
Diluted earnings / (loss) per share		11.54			11.61		(1.05	)

For the year ended December 31, 2023, during which the Company incurred losses, the effect of 88,400 non-vested stock awards was anti-dilutive. Hence for the year ended December 31, 2023, “Basic loss per share” equals “Diluted loss per share.”

F- 41

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
12.	Voyage Expenses, net and Vessel Operating Expenses
---	---

These consist of:

	Year ended December 31,
	2021			2022			2023
Voyage expenses, net	****	****	****	****	****	****	****	****
Port charges and canal dues		209,405			478,205			1,261,245
Bunkers consumption (including gain on bunkers)		(965,403	)		(2,503,325	)		2,731,786
Total	****	(755,998	)	****	(2,025,120	)	****	3,993,031
Vessel operating expenses	****	****	****	****	****	****	****	****
Crew wages and related costs		8,046,730			10,906,231			11,032,888
Insurance		1,300,050			1,895,004			2,060,324
Repairs and maintenance		397,551			640,672			1,149,488
Lubricants		866,772			1,195,526			1,286,046
Spares and consumable stores		2,055,920			3,367,528			3,496,958
Professional and legal fees		369,758			498,687			794,269
Other		528,311			830,250			938,735
Total	****	13,565,092		****	19,333,898		****	20,758,708

F- 42

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
13.	Derivative Financial Instruments
---	---

Interest rate swaps

Effective August 8, 2017, Euroseas Ltd. entered into a five year interest rate swap with HSBC Bank Plc. (“HSBC”) for a notional amount of $5.0 million, in order to manage interest costs and the risk associated with changing interest rates of the loans associated with M/V “Eirini P.”, M/V “Tasos” and M/V “Pantelis”, which therefore was allocated to the Company. Under the terms of the swap, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid an adjustable rate averaging 1.93% (more specifically, the Company paid the fixed rate of 1.40% until August 8, 2018, then 1.75% until August 8, 2019, then 1.85% until August 8, 2020 and then 2.32% until August 8, 2022) based on the notional amount. The swap agreement was novated to the Company on May 30, 2018.

On July 24, 2018, the Company entered into an interest rate swap with HSBC for a notional amount of $5.0 million, with inception date on July 24, 2018 and maturity date on July 24, 2023. Under this contract, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid a fixed rate of 2.93% based on the notional amount.

On April 9, 2020, the Company entered into an interest rate swap with HSBC for a notional amount of $10.0 million, with inception date on April 15, 2020 and maturity date on April 15, 2025. Under this contract, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid a fixed rate of 0.737% based on the notional amount.

On October 12, 2021, the Company entered into an interest rate swap with HSBC for a notional amount of $10.0 million, with inception date on October 14, 2021 and maturity date on October 14, 2025. Under this contract, HSBC made a quarterly payment to the Company equal to the 3-month LIBOR while the Company paid a fixed rate of 1.032% based on the notional amount.

In March 2023, the Company decided to liquidate its position into the three aforementioned SWAP agreements realizing a gain of $1.6 million.

On June 17, 2022, the Company entered into an interest rate swap with NBG for a notional amount of $10.0 million, with inception date on January 3, 2023 and maturity date on January 3, 2028. Under this contract, NBG makes a quarterly payment to the Company equal to the 3-month SOFR while the Company pays a fixed rate of 3.189% based on the notional amount.

F- 43

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
13.	Derivative Financial Instruments - Continued
---	---

The interest rate swaps did not qualify for hedge accounting as of December 31, 2022 and 2023.

Freight Forward Agreements (“FFA”)

In the first quarter of 2021 the Company entered into four FFA contracts on the Baltic Panamax Index (“BPI”) (a contract for the first three calendar months of 2021, totaling 30 days at an average TCE rate of $10,650, a contract for the first three calendar months of 2021, totaling 30 days at an average TCE rate of $11,050, a contract for the first three calendar months of 2021, totaling 30 days at an average TCE rate of $12,500 and a contract for the last three quarters of 2021, totaling 270 days at an average rate of $12,550). In the fourth quarter of 2021 the Company entered into an additional FFA contract on the BPI for the first three calendar months of 2022, totaling 90 days at an average rate of $31,350, which was closed in December 2021.

In the second quarter of 2022 the Company entered into an FFA contract on the BPI (a contract for July, August and September of 2022, totaling 90 days at an average TCE rate of $28,175). In the fourth quarter of 2022 the Company entered into an FFA contract on the BPI for the first three calendar months of 2023, totaling 90 days at an average rate of $12,000.

In the first quarter of 2023 the Company entered into four FFA contracts on the BPI (a contract for April, May and June of 2023, totaling 90 days at an average TCE rate of $16,500, a contract for April, May and June of 2023, totaling 90 days at an average TCE rate of $17,750, a contract for July, August and September of 2023, totaling 90 days at an average TCE rate of $16,250 and a contract for July, August and September of 2023, totaling 90 days at an average TCE rate of $17,500). In the fourth quarter of 2023 the Company entered into three additional contracts on the BPI (a contract for the first three calendar months of 2024, totaling 90 days at an average TCE rate of $10,100, a contract for the first three calendar months of 2024, totaling 90 days at an average TCE rate of $10,000 and a contract for the first three calendar months of 2024, totaling 90 days at an average TCE rate of $10,675).

The contracts are settled on a monthly basis using the average of the BPI for the days of the month the BPI is published. The Company receives a payment if the average BPI for the month is below the contract rate equal to the difference of the contract rate less the average BPI for the month multiplied by the number of contract days sold; if the average BPI for the month is greater than the contract rate the Company makes a payment equal to the difference of the average BPI for the month less the contract rate multiplied by the number of contract days sold. If the Company buys contracts previously sold (or the opposite) the Company receives or pays the difference of the two rates for the period covered by the contracts.

The FFA contracts did not qualify for hedge accounting. The Company follows guidance relating to “Fair value measurements” to calculate the fair value of the FFA contracts (see Note 14).

F- 44

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
13.	Derivative Financial Instruments – Continued
---	---
Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2022		December 31, 2023
---	---	---	---	---	---
Interest rate swap contracts	Current assets - Derivatives		1,396,568		196,627
FFA contract	Current assets - Derivatives		40,830		-
Interest rate swap contracts	Long-term assets – Derivatives		705,970		-
Total derivative assets		****	2,143,368	****	196,627
FFA contracts	Current liabilities – Derivatives		-		1,287,720
Interest rate swap contracts	Long-term liabilities – Derivatives		-		17,769
Total derivative liabilities		****	-	****	1,305,489
Derivatives not designated as hedging instruments	Location of gain (loss) recognized	Year Ended December 31, 2021			Year Ended December 31, 2022			Year Ended December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
Interest rate swap contracts– Unrealized gain / (loss)	(Loss) / gain on derivatives, net		636,705			2,181,855			(1,923,681	)
Interest rate swap contracts - Realized (loss) / gain	(Loss) / gain on derivatives, net		(301,905	)		(137,915	)		1,941,446
FFA contracts – Unrealized gain / (loss)	(Loss) / gain on derivatives, net		134,010			40,830			(1,328,550	)
FFA contracts– Realized (loss) / gain	(Loss) / gain on derivatives, net		(4,234,429	)		1,104,840			2,529,160
Total (loss) / gain on derivatives, net		****	(3,765,619	)	****	3,189,610		****	1,218,375

The Company’s FFA contracts discussed above require the Company to periodically post additional collateral depending on the level of any open position under such financial instruments, which as of December 31, 2022 and 2023 amounted to $283,800 and $928,658, respectively, and are included within “Restricted cash” under "Current assets" in the consolidated balance sheets.

F- 45

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
14.	Financial Instruments
---	---

The principal financial assets of the Company consist of cash and cash equivalents, restricted cash, trade accounts receivable, other receivables and derivatives. The principal financial liabilities of the Company consist of long-term bank loans, trade accounts payable, accrued expenses and amount due to related companies.

Interest rate risk

The Company enters into interest rate swap contracts as economic hedges to manage some of its exposure to variability in its floating rate long-term bank loans. Under the terms of the interest rate swaps the Company and the bank agreed to exchange, at specified intervals, the difference between a paying fixed rate and receiving floating rate interest amount calculated by reference to the agreed principal amounts and maturities. Interest rate swaps allow the Company to convert long-term bank loans issued at floating rates into equivalent fixed rates. Even though the interest rate swaps were entered into for economic hedging purposes, as noted in Note 13 they do not qualify for hedge accounting, under the guidance relating to Derivatives and Hedging, as the Company does not have currently written contemporaneous documentation identifying the risk being hedged and, both on a prospective and retrospective basis, performing an effectiveness test to support that the hedging relationship is highly effective. Consequently, the Company recognizes the change in fair value of the derivative under "(Loss) / gain on derivatives, net" in the consolidated statements of operations. As of December 31, 2023, the Company had one open interest rate swap contracts for a notional amount of $10.0 million and hence, the Company is exposed to increases in interest rates on the remaining amount of its interest-bearing debt.

F- 46

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
14.	Financial Instruments - Continued
---	---

Concentration of credit risk

Financial instruments, which potentially subject the Company to significant concentration of credit risk consist primarily of cash and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluation of the relative credit standing of these financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with trade accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable as the Company in most cases gets paid in advance. The Company maybe exposed to credit risk in the event of non-performance by its counterparties to derivative instruments; however, the Company limits its exposure by transacting with counterparties with high credit ratings.

Fair value of financial instruments

The Company follows guidance relating to “Fair value measurements”, which establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;

Level 3: Unobservable inputs that are not corroborated by market data.

The estimated fair values of the Company’s financial instruments such as cash and cash equivalents and restricted cash, trade accounts payable, accrued expenses and amount due from /to related companies approximate their individual carrying amounts as of December 31, 2022 and 2023, due to their short-term maturity. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of the Company’s long-term bank loans, bearing interest at variable interest rates approximates their recorded values as of December 31, 2023, due to the variable interest rate nature thereof. SOFR rates are observable at commonly quoted intervals for the full terms of the loans and hence fair values of the long-term bank loans are considered Level 2 items in accordance with the fair value hierarchy due to their variable interest rate, being the SOFR.

F- 47

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
14.	Financial Instruments - Continued
---	---

The fair value of the Company’s in FFA contracts is determined based on quoted prices from the applicable exchanges and therefore are considered Level 1 of the fair value hierarchy as defined in guidance relating to "Fair value measurements".

The fair value of the Company’s interest rate swap agreement is determined using a discounted cash flow approach based on market-based SOFR swap rates. SOFR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items. The fair value of the interest rate swap determined through Level 2 of the fair value hierarchy as defined in guidance relating to "Fair value measurements" is derived principally from or corroborated by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined.

Recurring Fair Value Measurements

	Fair Value Measurement as of December 31, 2023
	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Interest rate swap contracts, current portion	$	196,627		-	$	196,627		-
Liabilities
FFA contract, current portion	$	1,287,720	$	1,287,720
Interest rate swap contracts, long term portion	$	17,769		-	$	17,769		-
	Fair Value Measurement as of December 31, 2022
---	---	---	---	---	---	---	---	---
	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Interest rate swap contracts, current portion	$	1,396,568		-	$	1,396,568		-
Interest rate swap contracts, long term portion	$	705,970		-	$	705,970		-
FFA contract, current portion	$	40,830	$	40,830

F- 48

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
15.	Common stock
---	---

As per the Company’s Amended and Restated Articles of Incorporation, the Company is authorized to issue 200,000,000 shares of common stock, par value $0.01 per share.

Each outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that maybe voted upon by their holders at meetings of the shareholders. Subject to preferences that maybe applicable to any outstanding preferred shares, holders of the Company’s common stock (i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Board of Directors; (ii) are entitled to share ratably in all of the Company’s assets available for distribution upon liquidation, dissolution or winding up; and (iii) do not have preemptive, subscription or conversion rights or redemption or sinking fund provisions. All issued shares of the Company’s common stock when issued will be fully paid for and non-assessable. The rights, preferences and privileges of holders of common shares are subject to the rights of the holders of any preferred shares which the Company has issued or mayissue in the future.

During the year ended *December 31, 2021,*following the Company’s prospectus supplement filed with the SEC on *June 10, 2021,*as further supplemented by the prospectus dated *October 12, 2021,*the Company issued and sold at-the-market (ATM) 341,017 shares of common stock for gross proceeds net of commissions of $9.98 million.

On *June 4, 2021,*the Company received notice from Ergina Shipping Ltd., which had provided EuroDry with a loan of $6.0 million in *May 2021,*whereby Ergina Shipping Ltd. exercised its right to convert part of the outstanding balance of the loan of $3.3 million into common shares of the Company as per the terms of the loan. As a result, the Company issued 180,308 common shares to Ergina Shipping Ltd. The conversion price was the lowest closing price over the fifteen business days prior to the conversion notice as per the terms of the loan (see Note 6).

During the year ended *December 31, 2021,*the Company issued 49,650 common shares to the Company’s directors and officers and employees of the Manager in connection with its equity incentive plan (Note 10).

During the year ended *December 31, 2022,*following the Company’s prospectus supplement filed with the SEC on *June 10, 2021,*as further supplemented by the prospectus dated *October 12, 2021,*the Company issued and sold at-the-market (ATM) 65,130 shares of common stock for gross proceeds net of commissions of $2.69 million.

F- 49

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
15.	Common stock - Continued
---	---

On August 8, 2022, the Company announced that its Board of Directors has approved a share repurchase program for up to a total of $10 million of the Company's common stock. The original repurchase program approved in August 2022 had an initial duration of 12 months and was extended in August 2023 for an additional 12-month period. Share repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program will be determined by management based upon market conditions and other factors. The program does not require the Company to purchase any specific number or amount of shares and maybe suspended or reinstated at any time at the Company's discretion and without notice. During the year ended *December 31, 2022,*the Company under its share repurchase program repurchased and cancelled 140,301 common shares, in open market transactions, for an aggregate consideration of approximately $2.0 million. During the year ended *December 31, 2023,*the Company under its share repurchase program repurchased and cancelled 129,303 common shares, in open market transactions, for an aggregate consideration of approximately $2.0 million.

On October 10, 2023, the Company filed a prospectus supplement with the SEC and Company signed an equity distribution agreement with Alliance Global Partners (A.G.P.) in connection with the Company’s at-the-market offering program. Under this agreement the Company proposes to issue and sell through A.G.P. (as a sales agent) common shares, par value $0.01 per share, of the Company having an aggregate offering price up to $6,680,000. The shares consist entirely of authorized but unissued common shares to be issued and sold by the Company. During the year ended December 31, 2023 no transaction has been completed under this agreement.

During the year ended *December 31, 2022,*the Company issued 58,600 common shares to the Company’s directors and officers and employees of the Manager in connection with its equity incentive plan (Note 10).

During the year ended *December 31, 2023,*the Company issued 59,100 common shares to the Company’s directors and officers and employees of the Manager in connection with its equity incentive plan (Note 10).

F- 50

EuroDry Ltd. and Subsidiaries
Notes to the consolidated financial statements
*as of December 31, 2022* and 2023 and for the**
years ended December 31, 2021, 2022 and 2023
(All amounts expressed in U.S. Dollars)
16.	Non-controlling interests in Subsidiaries
---	---

In October 2023, the Company agreed with a number of investors represented by NRP Project Finance AS (“NRP Investors”) to acquire M/V “Maria” and M/V “Christos K” from unrelated third parties, and NRP investors would acquire a non-controlling interest of 39% for a capital contribution of $10,140,000 in the respective vessel-owning companies, with the Company holding the remaining 61% controlling interest. Net loss attributable to the non-controlling interest for the year ended December 31, 2023 was $374,068, which was in full allocated to and reduced the “Non-controlling interest” presented in the consolidated balance sheet.

17.	Subsequent events

Share repurchase program: During January, February and March 2024, the Company under its share repurchase program, repurchased 30,042 shares of common stock for an amount, including expenses, of $0.67 million.

F-51

HTML Editor

EXHIBIT 4.3

EURODRY LTD.

2022 EQUITY INCENTIVE PLAN

ARTICLE 1

General

1.1.	Purpose

The EuroDry Ltd. 2022 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 EuroDry Ltd. (the "Company"), with incentives to (a) acquire a proprietary interest in the success of the Company, (b) maximize their performance in respect of the provision of their services to the Company, a Subsidiary (as defined below) and/or an Affiliate (as defined below) and (c) enhance the long-term performance of the Company.

1.2.

Administration

(a)

Administration. The Plan shall be administered by the Company's Board of Directors (referred to herein as the "Board") or such committee of the Board as may be designated by the Board to administer the Plan (the Board or such committee, as applicable, being referred to herein as 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).

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(b)	General Right of Delegation. 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 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 any Subsidiary or any 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, on behalf of the Company 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 may amended and/or restated from time to time. 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 may be amended and/or restated from time to time, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.
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(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 who are employees of the Company or any Subsidiary (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 or any Subsidiary.
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(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.
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1.3.	Persons Eligible for Awards
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The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company or a Subsidiary or an Affiliate 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 or a Subsidiary or an Affiliate (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) non-qualified stock options (i.e., stock options that are not “incentive stock options” for purposes of Sections 421 and 422 of the Code (as defined below)), (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) phantom stock units, (f) unrestricted stock, (g) dividend equivalents, (h) other equity-based or equity-related awards and (i) cash 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):
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(i)	the maximum aggregate number of shares of common stock of the Company, par value $0.01 ("Common Stock"), that may be delivered pursuant to Awards granted under the Plan shall be 200,000. The following shares of Common Stock shall again become available for Awards under the Plan: (A) 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; (B) 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 (C) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee. Any shares used to pay the exercise price or tax withholding obligation related to an Award shall again become available to be delivered pursuant to Awards under the Plan. Awards that are payable solely in cash shall not be counted against the aggregate number of shares of Common Stock available for Awards under the Plan; and
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(ii)	no non-employee director of the Company may be granted options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units, dividend equivalents, unrestricted stock or other equity-based or equity-related Awards for more than 5,000 shares of Common Stock during any calendar year or cash Awards under the Plan in excess of $200,000 during any calendar year, inclusive of Board, committee or other service fees.
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(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 or book entry interest evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
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(c)	Adjustments.
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(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, 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, subject to the provisions of Section 1.5(c)(iv) below, 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.
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(ii)	The Administrator shall make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or infrequently occurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), subject to the provisions of Section 1.5(c)(iv) below) affecting the Company, a Subsidiary or an Affiliate, or the financial statements of the Company, a Subsidiary or an 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.
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(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 a Subsidiary, the Administrator shall have the power to:
(1)	provide that outstanding options, stock appreciation rights, phantom stock units and/or 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;
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(2)	cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, phantom stock units and/or 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, (x) 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 and (y) any phantom stock unit that by its terms may be cancelled without payment therefor may be cancelled and terminated without any payment or consideration therefor to the extent so provided in the applicable Award Agreement); or
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(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).
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(iv)	In connection with the occurrence of any Equity Restructuring (as defined below), and notwithstanding anything to the contrary in this Section 1.5(c):
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(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
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(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.
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1.6.	Definitions of Certain Terms
(a)	"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 each case as determined by the Administrator.
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(b)	Unless otherwise specifically set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship, for purposes of the Plan, the term "for Cause" shall be defined as follows:
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(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 a Subsidiary or an Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase or phrase of similar meaning), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" (or similar phrase or phrase of similar meaning) under such agreement; or
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(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:
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(A)	any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties;
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(B)	any excessive unauthorized absenteeism by the grantee;
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(C)	any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
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(D)	any act or omission by the grantee that is or may be injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;
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(E)	any act by the grantee that is inconsistent with the best interests of the Company, any Subsidiary or any Affiliate;
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(F)	the grantee's gross negligence that is injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;
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(G)	the grantee's material violation of any of the policies of the Company, any Subsidiary or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;
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(H)	the grantee's material breach of his or her employment or service contract with the Company, any Subsidiary or any Affiliate;
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(I)	the grantee's unauthorized (1) removal from the premises of the Company, any Subsidiary or any Affiliate of any document (in any medium or form) relating to the Company, any Subsidiary or any Affiliate or the customers or clients of the Company, any Subsidiary or any Affiliate or (2) disclosure to any Person of any of the Company's, any Subsidiary's or any Affiliate's, confidential or proprietary information;
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(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
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(K)	the grantee's commission of any act involving dishonesty or fraud.
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Any rights the Company, any Subsidiary or any Affiliate may have under the Plan in respect of the events giving rise to a termination "for Cause" shall be in addition to any other rights the Company, any Subsidiary 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)	"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended.
(d)	Unless otherwise specifically 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.
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(e)	"Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its shareholders, 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.
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(f)	"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.
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(g)	The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the Nasdaq Capital Market (or the Over-the-Counter Bulletin Board or such other market on which the Common Stock is trading, if not trading on the Nasdaq Capital Market), 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 and 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 and procedures as shall be established from time to time by the Administrator.
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(h)	Unless otherwise specifically set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship, for purposes of the Plan, the term “Good Reason” shall be defined as follows:
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(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 a Subsidiary or an Affiliate, on the other hand, that contains a definition of “good reason” (or similar phrase or phrase of similar meaning, including “constructive termination” by the Company, Subsidiary or Affiliate, as applicable), for purposes of the Plan, the term “Good Reason” shall mean those acts or omissions that would constitute “good reason” (or similar phrase or phrase of similar meaning) under such agreement; or
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(ii)	if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "Good Reason" shall mean any of the following subsequent to a Change in Control:
(A)	a material diminution in the grantee's base compensation;
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(B)	a material diminution in the grantee's authority, duties, or responsibilities;
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(C)	a relocation of the grantee’s primary office location beyond a fifty (50) mile radius of the grantee’s primary office prior to such relocation; or
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(D)	any other action or inaction that constitutes a material breach by the Company, a Subsidiary or an Affiliate (or the acquiror or successor thereof, as applicable) of the employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or a Subsidiary or an Affiliate (or the acquiror or successor thereof, as applicable), on the other hand;
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provided that, for purposes of this clause (ii), in order for the grantee’s termination of employment or consultancy/service relationship to be deemed to be for “Good Reason”, (x) such termination must occur within six months of the initial existence of the applicable condition arising without the consent of the grantee, (y) the grantee must provide notice to the Company (or its acquiror or successor, as applicable) of the existence of the applicable condition no later than 90 days following the initial existence of the condition, and (z) the Company (or its acquiror or successor, as applicable) must have failed to remedy the condition within 30 days of its receipt of the notice from the grantee of the existence of such condition.

(i)	"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.
(j)	"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.
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(k)	"Subsidiary" shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.
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ARTICLE II

Awards Under The Plan

2.1.	Agreements Evidencing Awards

Each Award granted under the Plan shall be evidenced by a written agreement or 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 non-qualified 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 Sections 409A and/or 457A of the Code, to structure such options so as to comply with the requirements of Sections 409A and/or 457A of the Code, to the extent applicable.
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(b)	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 Section 409A or 457A of the Code, to the extent applicable, 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.
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(c)	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 Sections 409A and/or 457A of the Code, to structure such stock appreciation rights so as to comply with the requirements of Sections 409A and/or 457A of the Code, to the extent applicable.
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(d)	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 Section 409A or 457A of the Code, to the extent applicable, 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.
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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 specifically 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"), if any, on such form and in such manner as the Administrator shall prescribe.
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(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 withholding 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.
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(d)	Delivery of Shares 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 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. 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.
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(e)	No Shareholder 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 shareholder 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.
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(f)	Nonexempt Employees. If an option or stock appreciation right is granted to an employee who is a nonexempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, such option or stock appreciation right shall not be scheduled to be first exercisable for any share of Common Stock until at least six months following the date of grant of the option or stock appreciation right. Notwithstanding the foregoing, in the event an option or stock appreciation right granted to such an employee becomes first exercisable during such six-month period pursuant to the terms of the Plan or the applicable Award Agreement as a result of the grantee’s death, Disability or retirement, or as a result of a change in corporate ownership, then the restriction set forth in the foregoing sentence shall not apply. The foregoing provisions in this Section 2.3(f) are intended to operate so that any income derived by a nonexempt employee in connection with the exercise or vesting of an option or stock appreciation right will be exempt from his or her regular rate of pay.
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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) or (e) 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 is itself a consultant or service provider to), the Company or any Subsidiary or any Affiliate.
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(b)	Termination "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 (whether vested or unvested) shall immediately terminate upon such termination of employment or consultancy/service relationship.
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(c)	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.
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(d)	Death.
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(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.
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(ii)	Restrictions on Exercise Following Death. Any 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.
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(e)	Administrator Discretion. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4, subject to Section 3.1(c).
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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.
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(b)	Issuance of Stock. 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 shareholder 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.
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(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.
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(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.
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(e)	Consequence of Termination of Employment/Service. Unless otherwise specifically 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 is itself a consultant or service provider to), the Company or any Subsidiary or any Affiliate. 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), subject to Section 3.1(c).
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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 with respect to Awards granted 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 with respect to Awards granted 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 with respect to Awards granted to the grantee, at such time as determined by the Administrator.
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(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.
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(c)	No Shareholder Rights. No grantee of a restricted stock unit shall have any of the rights of a shareholder 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.
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(d)	Nontransferability. No restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of, except as otherwise specifically provided in this Plan or the applicable Award Agreement.
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(e)	Consequence of Termination of Employment/Service. Unless otherwise specifically 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 is itself a consultant or service provider to), the Company or any Subsidiary or any Affiliate. All dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(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 2.7(e), subject to Section 3.1(c).
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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 terms, conditions and forfeiture provisions as the Administrator shall determine and subject to the terms, conditions and restrictions in this Plan. Shares may be granted or sold in respect of past services or other valid consideration.

2.9.	Grant of Phantom Stock Units
(a)	Phantom Stock Unit Grants. The Administrator may grant phantom stock units 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. Each phantom stock unit shall represent a notional share of Common Stock. No grantee of a phantom stock unit shall have any rights of shareholder of the Company with respect to such Award unless and until the Award is cancelled in exchange for shares of Common Stock, which issuance of shares shall be subject to Sections 3.2, 3.4 and 3.13. Holders of phantom stock units shall not (i) be entitled to any voting rights with respect to any phantom stock units and (ii) be entitled, by reason of holding any phantom stock unit, to any distributions payable to shareholders of Common Stock; provided, however, that the Administrator may provide that the phantom stock unit shall be entitled to receive dividend equivalent rights, on such terms and conditions as the Administrator shall determine. The Administrator may determine that the phantom stock unit may be cancelled on such terms and conditions as set forth in the applicable Award Agreement, including (1) for no payment, (2) in exchange for a cash payment or (3) in exchange for shares of Common Stock.
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(b)	Other Provisions. Phantom stock units may be made independently of or in connection with any other Award under the Plan. A grantee of a phantom stock unit 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 phantom stock unit Award Agreement in such form as the Administrator shall determine.
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(c)	Nontransferability. Phantom stock units may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as otherwise specifically provided in this Plan or the applicable Award Agreement.
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(d)	Grants to U.S. Taxpayers. No grant of a phantom stock unit Award to an individual who is then subject to the requirements of Sections 409A and/or 457A of the Code shall be made under the Plan unless the Award, by its terms, is exempt from Sections 409A and/or 457A of the Code, as applicable, or otherwise complies with such sections of the Code.
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2.10.	Other Equity-Based or Equity-Related Awards
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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, conditions, restrictions and forfeiture provisions 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.

2.11.	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.

2.12.	Grant of Cash Awards

The Administrator may grant Awards that are payable solely in cash to such Key Persons and in such amounts and subject to such terms, conditions, restrictions and forfeiture provisions as the Administrator shall determine and subject to the terms, conditions and restrictions in this Plan. Cash Awards may be thus granted in respect of past services or other valid consideration.

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 suspension, discontinuation, revision or 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.
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(b)	Shareholder Approval Requirement. If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain shareholder 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.
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(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 Section 2.4, 2.6(e) or 2.7(e) with respect to the termination of the Award upon termination of employment or consultancy/service relationship; 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 rights 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(e), 2.6(e) or 2.7(e)), the Administrator may consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code in respect of Awards granted under the Plan to individuals subject to such provisions of the Code.
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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.
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(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.
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3.3.	Nonassignability; Successors
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Except as provided in Section 2.4(d), 2.5, 2.6(d), 2.7(d) or 2.9(c), (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). The rights, duties and obligations under the Plan and any applicable Award Agreement shall be assignable by the Company to any successor entity, including any entity acquiring all, or substantially all, of the assets of the Company. 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, its Subsidiaries and Affiliates shall have the right and are hereby authorized to withhold from any Award, from any cash or other 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, up to the maximum statutory rates in the applicable jurisdiction with respect to the Award, as determined by the Company, 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 the applicable withholding taxes as determined in accordance with this Section 3.4(a). 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.
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(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 Section 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, all in such a way so as to retain, to the maximum extent feasible, the originally intended economic and tax benefits under the Award. 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.
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3.5.	Change in Control
(a)	Change in Control Defined. Unless otherwise specifically set forth in the applicable Award Agreement, for purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:
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(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 any Subsidiary or 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) Aristides J. Pittas or the Pittas family or any entity which Aristides J. Pittas or the Pittas family directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act);
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(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 (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 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 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 or (C) to Aristides J. Pittas or the Pittas family or an entity which Aristides J. Pittas or the Pittas family directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act);
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(iii)	any merger, consolidation, reorganization or similar event of the Company; 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 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;
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(iv)	the approval by the Company's shareholders of a plan of complete liquidation or dissolution of the Company; or
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(v)	during any period of 12 consecutive calendar months, individuals:
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(A)	who were directors of the Company on the first day of such period, or
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(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.

A Change of Control shall not be deemed to have occurred for purpose of the Plan as a result of an Exempted Transaction (as such term is defined in that certain Shareholders Rights Agreement, dated as of May 30, 2018, between EURODRY Ltd., a Marshall Islands corporation, and American Stock Transfer and Trust Company, LLC, as rights agent, as amended from time to time).

Notwithstanding the foregoing, unless otherwise specifically 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 specifically provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:
(i)	any Award outstanding as of immediately prior to the time of such Change in Control 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;
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(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; and
---	---
(iii)	a grantee who incurs a termination of employment or consultancy/service relationship for any reason, other than a voluntary termination or resignation by the grantee without Good Reason or a termination "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 his or her 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, any Subsidiary or any Affiliate from taking any action with respect to the operation and conduct of its business that it deems appropriate or in its best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company, any Subsidiary or any Affiliate, any merger or consolidation of the Company, any Subsidiary 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, any Subsidiary or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company, any Subsidiary 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; Service Relationship
(a)	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, any Subsidiary or any Affiliate, his or her consultancy/service relationship with the Company, any Subsidiary or any Affiliate, or his or her position as an officer or director of the Company, any Subsidiary or any Affiliate, or affect any right that the Company, any Subsidiary or any Affiliate may have to terminate such employment or consultancy/service relationship.
---	---
(b)	Service Relationship. For the avoidance of doubt, for purposes of the Plan, reference to (i) a service relationship shall include service as a director or officer and (ii) a termination of a service relationship shall include a removal or resignation as a director or officer.
---	---
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 or any Subsidiary 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; Shareholder Approval. The Plan was approved and adopted by the Board on November 3, 2022. The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's shareholders.
---	---
(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 shares shall 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 U.S. 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 U.S. Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code, all in such a way so as to retain, to the maximum extent feasible, the originally intended economic and tax benefits under the Award.

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 Subsidiary or any Affiliate, (b) a grantee's breach of any employment or consulting agreement with the Company or any Subsidiary or any Affiliate, (c) a grantee's termination of employment or consultancy/service relationship 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. Notwithstanding anything to the contrary in this Plan or any Award Agreement, all Awards granted under the Plan shall be subject to clawback to the extent required to comply with applicable law, the applicable rules of any stock exchange on which the Company’s shares are traded, and/or any clawback policy adopted by the Company in connection with any such applicable law or any such applicable stock exchange rules, including, without limitation, in connection with an accounting restatement and/or Rule 10D-1 of the 1934 Act.

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, any Subsidiary 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, any Subsidiary or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company, Subsidiary or 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_656778.htm

EXHIBIT 4.16

From: CHAILEASE INTERNATIONAL FINANCIAL

SERVICES (SINGAPORE) PTE. LTD.

18 Robinson Road

#15-01, 18 Robinson

Singapore 048547

To: ARETI SHIPPING LTD

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

Marshall Islands

MH96960

21 October 2022

Dear Sirs

Facility agreement dated 6 October 2021 (as amended and/or supplemented by a deed of release and reassignment dated 4 October 2022 and as may be further amended and/or supplemented from time to time, the “Facility Agreement”) made between (i) Areti Shipping Ltd of the Marshall Islands as borrower (the “Borrower”), (ii) Eurodry Ltd as guarantor, and (iii) Chailease International Financial Services (Singapore) Pte. Ltd. as lender (the “Lender”), in respect of a term loan facility of a term loan facility of up to $9,000,000

We refer to the Facility Agreement.

Words and expressions defined in the Facility Agreement have the same meaning when used in this letter unless the content otherwise requires.

The Borrower requested to the Lender to consent to the change of registry and flag of m/v “TASOS” with IMO Number 9180906 (the “Ship”), which was registered in the ownership of the Borrower **** under the Cyprus flag, to the Marshall Islands registry and flag.

We hereby further agree and confirm that, with effect on and from the 21^st^ of October 2022:

1.	the definition of "Deed of Covenants" in clause 1.1 of the Facility Agreement shall be deleted;
2.	the words "Deed of Covenants" in the definition of "Finance Documents" in clause 1.1 of the Facility Agreement shall be deleted;
---	---
3.	the words “first priority Cyprus ship mortgage” in the definition of “Mortgage A” in clause 1.1 of the Facility Agreement shall be deleted and replaced with the words “first preferred Marshall Islands ship mortgage”;
---	---
4.	the words “first priority Cyprus ship mortgage” in clause 21.5.1 of the Facility Agreement shall be deleted and replaced with the words “first preferred Marshall Islands ship mortgage”;
---	---
5.	the words “The Republic of Cyprus” in Schedule 2 of the Facility Agreement in respect of Ship A shall be deleted and replaced with the words “The Republic of the Marshall Islands”;
---	---

6.	references to “the Mortgage” in respect of Ship A or the Ship (as the case may be) in the Finance Documents shall be construed as references to the first preferred Marshall Islands ship mortgage dated 21 October 2022; and
7.	all references to “Cyprus” in the Finance Documents in so far as they refer to Ship A or the Ship (as the case may be) shall be construed as references to “Marshall Islands”.
---	---

We hereby further agree that all the provisions of the Facility Agreement and other Finance Documents shall be and are hereby re-affirmed (as amended hereby) and remain in full force and effect.

This letter may be executed in any number of counterparts.

This letter and any non-contractual obligations arising out of or in connection to it shall be governed by and construed in accordance with English law.

Please confirm your agreement by signing the acknowledgement below.

___/s/ AnnaMaria Matsa_____________________

SIGNED

by Anna-Maria Matsa

for and on behalf of

CHAILEASE INTERNATIONAL FINANCIAL

SERVICES (SINGAPORE) PTE. LTD.

We hereby confirm our acceptance of, and our agreement to, the terms and conditions of the above letter.

Dated 21 October 2022

By ………/s/ Stefania Karmiri……………..

SIGNED

By STEFANIA KARMIRI

for and on behalf of

ARETI SHIPPING LTD

COUNTERSIGNED this 21^st^ day of October 2022 by the following parties who, by executing the same, confirm and acknowledge that they have read and understood the terms and conditions of the above letter agreement, that they agree in all respects to the same and that the Finance Documents to which they 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 Facility Agreement, as amended by the above letter agreement, and each of them hereby reaffirms the Finance Documents to which it is a party.

___/s/ Stefania Karmiri______________ _________________________

STEFANIA KARMIRI

on behalf of on behalf of

EURODRY LTD. EUROBULK (FAR EAST) LTD. INC.

HTML Editor

EXHIBIT 4.17

Dated __20__ June 2023

KAMSARMAX TWO SHIPPING LTD

as Borrower

and

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

and

HAMBURG COMMERCIAL BANK AG

as Agent, Mandated Lead Arranger

and Security Trustee

LOAN AGREEMENT

relating to

a senior secured term loan facility of up to $14,000,000

to provide finance secured on m.v. "EKATERINI"

PIRAEUS

Index

Clause	Page
1. INTERPRETATION	1
2. FACILITY	24
3. POSITION OF THE LENDERS	24
4. DRAWDOWN	25
5. INTEREST	26
6. INTEREST PERIODS	29
7. DEFAULT INTEREST	30
8. REPAYMENT AND PREPAYMENT	31
9. CONDITIONS PRECEDENT	34
10. REPRESENTATIONS AND WARRANTIES	35
11. GENERAL UNDERTAKINGS	41
12. CORPORATE UNDERTAKINGS	50
13. INSURANCE	52
14. SHIP COVENANTS	59
15. SECURITY COVER	67
16. PAYMENTS AND CALCULATIONS	69
17. APPLICATION OF RECEIPTS	72

18. APPLICATION OF EARNINGS	74
19. EVENTS OF DEFAULT	76
20. FEES AND EXPENSES	82
21. INDEMNITIES	84
22. NO SET-OFF OR TAX DEDUCTION	87
23. ILLEGALITY, ETC	90
24. INCREASED COSTS	91
25. SET-OFF	93
26. TRANSFERS AND CHANGES IN LENDING OFFICES	94
27. VARIATIONS AND WAIVERS	101
28. NOTICES	104
29. SUPPLEMENTAL	107
30. BAIL-IN	108
31. LAW AND JURISDICTION	108

Schedules
SCHEDULE 1 LENDERS AND COMMITMENTS		110
SCHEDULE 2 FORM OF DRAWDOWN NOTICE		111
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS		112
Part A	112
Part B	114
SCHEDULE 4 TRANSFER CERTIFICATE		116
SCHEDULE 5 POWER OF ATTORNEY		120
SCHEDULE 6 FORM OF COMPLIANCE CERTIFICATE		121
SCHEDULE 7 BENCHMARK TERMS		123
SCHEDULE 8 DAILY NON-CUMULATIVE COMPOUNDED RFR RATE		126
SCHEDULE 9 CUMULATIVE COMPOUNDED RFR RATE		128
Execution
EXECUTION PAGES		129

THIS AGREEMENT is made on __20__ June 2023

BETWEEN
(1)	KAMSARMAX TWO SHIPPING LTD, a corporation incorporated in the Republic of the Marshall Islands and having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands, as Borrower;
---	---
(2)	THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;
---	---
(3)	HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Agent;
---	---
(4)	HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Mandated Lead Arranger; and
---	---
(5)	HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Security Trustee.
---	---
BACKGROUND
---

The Lenders have agreed to make available to the Borrower a secured term loan facility in a single advance, in an amount of up to the lesser of:

(a)	$14,000,000; and
(b)	52.5 per cent. of the Initial Market Value of the Ship,
---	---

for the purpose of partly financing the Ship.

IT IS AGREED as follows:

1.	INTERPRETATION
1.1	Definitions
---	---

Subject to Clause 1.5 (General Interpretation), in this Agreement:

"Account" means each of the Earnings Account, the Minimum Liquidity Account, the Dry Docking Reserve Account and the Retention Account and, in the plural, means all of them.
"Account Pledge" means, in relation to each Account, a pledge agreement creating security in respect of that Account in the Agreed Form and, in the plural, means all of them.
---
"Additional Business Day" means any day specified as such in the Benchmark Terms.
---
"Additional Minimum Liquidity" has the meaning given in Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity).
---

"Agency and Trust Agreement" means the agency and trust agreement executed or to be executed between the Borrower and the Creditor Parties in the Agreed Form.
"Agent" means Hamburg Commercial Bank 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 (Appointment of a new Servicing Bank) 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.
---
"Annex VI" means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.
---
"Approved Broker" means each of Arrow Valuations Ltd, Barry Rogliano Salles, H. Clarkson & Co. Ltd., Howe Robinson & Co Ltd., Fearnleys A/S, Maersk Brokers K/S and SSY Valuations Services Ltd (or any affiliate of such person through which valuations are commonly issued) and, in the plural, means all of them.
---
"Approved Flag" means the Marshall Islands flag or such other flag as the Agent may approve as the flag on which the Ship is or, as the case may be, shall be registered.
---
"Approved Flag State" means the Republic of the Marshall Islands or any other country in which the Agent may approve that the Ship is or, as the case may be, shall be registered.
---
"Approved Manager" **** means:
---
(a)	Eurobulk (Far East) Inc. Ltd. ("Eurobulk"), a corporation incorporated in the Republic of Philippines with its registered address at 12/F MA Natividad Bldg., 470 TM Kalaw Cor. Cortada STS., Ermita, Manila, having been appointed as at the date of this Agreement as the commercial and technical manager of the Ship; or
---	---
(b)	any other company which the Agent (acting on the instructions of the Majority Lenders) may approve in writing from time to time as the commercial and/or technical manager of the Ship.
---	---
"Approved Manager's Undertaking" means a letter of undertaking including (inter alia) an assignment of the Approved Manager's rights, title and interest in the Insurances of the Ship executed or 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 the commercial and/or technical manager of the Ship and subordinating its rights against the Ship and the Borrower to the rights of the Creditor Parties under the Finance Documents and, in the plural, means all of them.
---
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
---

"Assignable Charter" means any time charterparty, consecutive voyage charter or contract of affreightment in respect of the Ship having a duration (or capable of exceeding a duration) of more than 12 months and any guarantee of the obligations of the charterer under such charter or any bareboat charter in respect of the Ship and any guarantee of the obligations of the charterer under such bareboat charter, entered or to be entered into by the Borrower and a charterer or, as the context may require, bareboat charterer and, in the plural, means all of them.
"Availability Period" **** means the period commencing on the date of this Agreement and ending on:
---
(a)	30 June 2023 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower) or
---	---
(b)	if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated.
---	---
"Bail-In Action" means the exercise of any Write-down and Conversion Powers.
---
"Bail-In Legislation" means:
---
(a)	in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
---	---
(b)	in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
---	---
(c)	in relation to the United Kingdom, the UK Bail-In Legislation.
---	---
"Balloon Instalment" has the meaning given in Clause 8.1 (Amount of Instalments).
---
"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".
---	---

"Benchmark Terms" means the terms set out in Schedule 7 (Benchmark Terms) or in any Benchmark Terms Supplement.
"Benchmark Terms Supplement" means a document which:
---
(a)	is agreed in writing by the Borrower and the Agent (in its own capacity) and the Agent (acting on the instructions of the Lenders);
---	---
(b)	specifies the relevant terms which are expressed in this Agreement to be determined by reference to the Benchmark Terms; and
---	---
(c)	has been made available to the Borrower and each Creditor Party.
---	---
"Borrower" means Kamsarmax Two Shipping Ltd, a corporation incorporated and existing in the Republic of the Marshall Islands and having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands.
---
"Break Costs" has the meaning given in Clause 21.2 (Break Costs).
---
"Business Day" means:
---
(a)	a day (other than a Saturday or Sunday) on which banks are open for general business:
---	---
(i)	in New York regarding the fixing of any interest rate which is required to be determined under this Agreement or any Finance Document;
---	---
(ii)	in Hamburg and New York in respect of any payment which is required to be made under a Finance Document; and
---	---
(iii)	in Hamburg and in Athens (being the place in which the Borrower has its principal place of business) regarding any other action to be taken under this Agreement or any other Finance Document; and
---	---
(b)	in relation to:
---	---
(i)	any date for payment or purchase of dollars; or
---	---
(ii)	the determination of the first day or the last day of an Interest Period or otherwise in relation to the determination of the length of or rate for an Interest Period,
---	---

an Additional Business Day.

"Cancellation Notice" has the meaning given in Clause 8.6 (Optional facility cancellation).
"Central Bank Rate" has the meaning given to that term in the Benchmark Terms.
---
"Central Bank Rate Adjustment" has the meaning given to that term in the Benchmark Terms.
---
"Central Bank Rate Spread" has the meaning given to that term in the Benchmark Terms.
---

"Change of Control” means:
(a)	any change in the immediate and/or ultimate beneficial ownership or control of any of the shares of the Borrower from that existing on the date of this Agreement (and for the avoidance of doubt any change in the ownership of the shares in the Corporate Guarantor which is a US NASDAQ publicly listed company occurring in the normal course of business shall not constitute a breach of this clause); or
---	---
(b)	any change to the legal ownership of any of the shares in the Borrower; and/or
---	---
(c)	Mr. Aristeidis J. Pittas ceasing to be the Chief Executive Officer of the Corporate Guarantor.
---	---
"Charterparty Assignment" means an assignment of the rights of the Borrower under any Assignable Charter and any guarantee of such Assignable Charter executed or to be executed by the 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 6 (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 11.21 (Compliance Certificate).
---
"Compounded Reference Rate" means in relation to any RFR Banking Day during the Interest Period of the Loan or any part of the Loan, the percentage rate per annum which is the Daily Non-Cumulative Compounded RFR Rate for that RFR Banking Day.
---
"Compounding Methodology Supplement" means, in relation to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate, a document which:
---
(a)	is agreed in writing by the Borrower and the Agent (in its own capacity) and the Agent (acting on the instructions of the Lenders);
---	---
(b)	specifies a calculation methodology for that rate; and
---	---
(c)	has been made available to the Borrower and each Creditor Party.
---	---
"Contractual Currency" has the meaning given in Clause 21.6 (Currency indemnity).
---
"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender.
---
"Corporate Guarantee" means a guarantee of the obligations of the Borrower under this Agreement and the other Finance Documents, in the Agreed Form.
---
"Corporate Guarantor" means Eurodry Ltd., a corporation incorporated in the Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960.
---

"Creditor Party" means the Agent, the Security Trustee, the Mandated Lead Arranger or any Lender, whether as at the date of this Agreement or at any later time and, in the plural, means all of them.
"Cumulative Compounded RFR Rate" means, in relation to an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Agent (or by any other Creditor Party which agrees to determine that rate in place of the Agent) in accordance with the methodology set out in Schedule 9 (Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
---
"Daily Non-Cumulative Compounded RFR Rate" means, in relation to any RFR Banking Day during an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Agent (or by any other Creditor Party which agrees to determine that rate in place of the Agent) in accordance with the methodology set out in Schedule 8 (Daily Non-Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
---
"Daily Rate" means the rate specified as such in the Benchmark Terms.
---
"Deed of Covenant" means, if required by the laws of the Approved Flag State, a deed of covenant collateral to the Mortgage on the Ship and creating charges over (inter alia) the Ship, the Earnings, the Insurances and any Requisition Compensation in the Agreed Form.
---
"Default" means an Event of Default or any event or circumstance specified in Clause 19 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
---
"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, any of the Parties or, if applicable, any Security 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 or, if applicable, any Security Party preventing that, or any other, Party or, if applicable, any Security Party:
---	---
(i)	from performing its payment obligations under the Finance Documents; or
---	---
(ii)	from communicating with other Parties or, if applicable, any Security Party in accordance with the terms of the Finance Documents,
---	---

and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Security Party whose operations are disrupted.

"Dollars" and "$" means the lawful currency for the time being of the United States of America.
"Drawdown Date" means the date requested by the Borrower for the Loan to be borrowed, or (as the context requires) the date on which the Loan 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).
---
"Dry Docking Reserve Amount" has the meaning given in Clause 11.20 (Dry Docking Reserve Amount).
---
"Dry Docking Reserve Account" means an account in the name of the Borrower with the Agent in Hamburg designated "Kamsarmax Two Shipping Ltd – Dry Docking Reserve Account", or any other account (with that or another office of the Agent) which replaces such account and is designated by the Agent as the Dry Docking Reserve Account for the purposes of this Agreement.
---
"Earnings" means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower 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 Borrower 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 Hamburg designated "Kamsarmax Two Shipping Ltd - Earnings Account", or any other account (with that or another office of the Agent) which replaces such account and is designated by the Agent as the Earnings Account for the purposes of this Agreement.
---
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
---
"Environmental Claim" means:
---

(a)	any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
(b)	any claim by any other person which relates to an Environmental Incident,
---	---
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:
---
(a)	any release of Environmentally Sensitive Material from the Ship; or
---	---
(b)	any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is 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 the Ship and in connection with which the Ship is liable to be arrested and/or where the Borrower and/or any operator or manager of the Ship is at fault or otherwise liable to any legal or administrative action.
---	---
"Environmental Law" means any law, regulation, convention and agreement 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.
---
"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time.
---
"Event of Default" means any of the events or circumstances described in Clause 19.1 (Events of Default).
---
"FATCA" means:
---
(a)	sections 1471 to 1474 of the Code or any associated regulations;
---	---
(b)	any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
---	---

(c)	any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.
---
"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.
---
"Fee Letter" means any letter or letters dated on or about the date of this Agreement between the Mandated Lead Arranger and the Borrower (or the Agent, the Security Trustee and the Borrower, as the case may be) setting out any of the fees referred to in Clause 20 (Fees and Expenses).
---
"Final Repayment Date" means the date falling on the earlier of (i) the date falling on the fourth anniversary of the Drawdown Date and (ii) 30 June 2027.
---
"Finance Documents" means together:
---
(a)	this Agreement;
---	---
(b)	the Agency and Trust Agreement;
---	---
(c)	any Fee Letter;
---	---
(d)	the Drawdown Notice;
---	---
(e)	the Accounts Pledges;
---	---
(f)	the Corporate Guarantee;
---	---
(g)	the Mortgage;
---	---
(h)	the General Assignment;
---	---
(i)	any Deed of Covenant;
---	---
(j)	any Charterparty Assignment;
---	---
(k)	the Approved Manager's Undertaking;
---	---
(l)	any Benchmark Terms Supplement;
---	---
(m)	any Compounding Methodology Supplement; and
---	---
(n)	any other document (whether creating a Security Interest or not) which is executed at any time by the 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 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 foreign exchange transaction, any interest or currency swap, exchange 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 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 (f) if the references to the debtor referred to the other person.
---	---
"Financial Year" means, in relation to the Borrower and the Corporate Guarantor, each period of one year commencing on 1 January in respect of which their individual accounts are or ought to be prepared.
---
"GAAP" means generally accepted accounting principles in US.
---
"General Assignment" means a general assignment of (inter alia) the Earnings, the Insurances and any Requisition Compensation relative to the Ship in the Agreed Form.
---
"Group" ** means the Borrower, the Corporate Guarantor and any entity directly or indirectly owned by the Corporate Guarantor and "member of the Group**" shall be construed accordingly.
---
"IACS" means the International Association of Classification Societies.
---
"Initial Market Value" means the Market Value of the Ship calculated in accordance with the valuations relative thereto referred to in paragraph 7 of Schedule 3, Part A.
---
"Instalment" has the meaning given in Clause 8.1 (Amount of Instalments).
---
"Insurances" means:
---
(a)	all policies and contracts of insurance (including without limitation, any loss of hire insurance) and reinsurance, policies or contracts, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, its Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and
---	---

(b)	all rights (including, without limitation, any and all rights or claims which the Borrower 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 and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
"Interest Payment" means the aggregate amount of interest that is, or is scheduled to become, payable under any Finance Document.
---
"Interest Period" means each period determined in accordance with Clause 6 (Interest Periods) or selected in accordance with Clause 7.3(b) (Calculation of default rate of interest).
---
"Inventory of Hazardous Material" means the inventory of any material or substance which is liable to create hazards to human health and/or the environment issued by the Ship’s Approved Classification Society which includes a list of any and all materials known to be potentially hazardous utilised in the construction of the Ship along with their respective location and approximate quantities, also referred to as List of Hazardous Materials.
---
"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 (Lender re-organisation), 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 26.14 (Change of lending office) or its transferee, successor or assign.
---
"LMA" means the Loan Market Association or any successor organisation.
---
"Loan" means the principal amount for the time being outstanding under this Agreement.
---
"Lookback Period" means the number of days specified as such in the Benchmark Terms.
---

"Major Casualty" means 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 $650,000 or the equivalent in any other currency.
"Majority Lenders" means:
---
(a)	before the Loan is made, Lenders whose Commitments total 66 ^2/3^ per cent. of the Total Commitments; and
---	---
(b)	after the Loan is made, Lenders whose Contributions total 66 ^2/3^ per cent. of the Loan.
---	---
"Management Agreement" means the agreement between the Borrower and the Approved Manager in relation to the commercial and technical management of the Ship, in a form approved by the Agent.
---
"Mandated Lead Arranger" means Hamburg Commercial Bank AG, acting in such capacity through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, or any successor.
---
"Margin" means 2.50 per cent. per annum.
---
"Market Disruption Credit Adjustment Spread" means any rate which is specified as such in the Benchmark Terms.
---
"Market Disruption Rate" means the rate specified as such in the Benchmark Terms.
---
"Market Value" means the market value of the Ship determined in accordance with Clause 15.3 (Valuation of Ship).
---
"Material Adverse Change" means any event or series of events 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 the Borrower and/or any Security Party taken as a whole;
---	---
(b)	the ability of the 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.
---	---
"Maximum Loan Amount" means an amount of up to the lesser of:
---
(a)	$14,000,000; and
---	---
(b)	52.5 per cent. of the Initial Market Value of the Ship.
---	---
"Minimum Liquidity" has the meaning given in Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity).
---

"Minimum Liquidity Account" means an account in the name of the Borrower with the Agent in Hamburg designated "Kamsarmax Two Shipping Ltd - Minimum Liquidity Account", or any other account (with that or another office of the Agent) which replaces such account and is designated by the Agent as the Minimum Liquidity Account for the purposes of this Agreement.
"Mortgage" means the first preferred or, as the case may be, priority ship mortgage on the Ship in the Agreed Form.
---
"Notifying Lender" has the meaning given in Clause 21.2 (Break Costs), Clause 23.1 (Illegality) or Clause 24.1 (Increased costs) as the context requires.
---
"Participating Member State" means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
---
"Party" means a party to this Agreement.
---
"Payment Currency" has the meaning given in Clause 21.6 (Currency indemnity).
---
"Permitted Liens" means:
---
(a)	liens for unpaid master's and crew's wages in accordance with usual maritime practice;
---	---
(b)	liens for salvage;
---	---
(c)	liens arising by operation of law for not more than one month’s prepaid hire under any charter in relation to the Ship not prohibited by this Agreement;
---	---
(d)	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 the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(d) (Restrictions on chartering, appointment of managers etc.); and
---	---
(e)	liens 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 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 (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 (a) 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; provision of additional security).
---
"Prepayment Notice" has the meaning given in Clause 8.5(b) (Conditions for voluntary prepayment).
---
"Relevant Market" means the market specified as such in the Benchmark Terms.
---

"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
"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).
---
"Replacement Reference Rate" means a reference rate which is:
---
(a)	formally designated, nominated or recommended as the replacement for the RFR by:
---	---
(i)	the administrator of the RFR (provided that the market or economic reality that such reference rate measures is the same as that measured by the RFR); or
---	---
(ii)	any Relevant Nominating Body,
---	---
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under paragraph (ii) above;
---
(b)	in the opinion of the Lenders, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to the RFR; or
---	---
(c)	in the reasonable opinion of the Lenders, an appropriate successor or alternative to the RFR.
---	---
"Reporting Day" means the day specified as such in the Benchmark Terms.
---
"Reporting Time" means the relevant time (if any) specified as such in the Benchmark Terms.
---
"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".
---
"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.
---
"Restricted Party" **** means a person that is:
---
(a)	listed on, or owned or controlled by a person listed on any Sanctions List;
---	---
(b)	located in, organised under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory which is a subject of country-wide or territory-wide Sanctions (any such country or territory, a "Sanctioned Country"); or
---	---
(c)	otherwise a subject of Sanctions.
---	---

"Retention Account" means an account in the name of the Borrower with the Agent in Hamburg designated "Kamsarmax Two Shipping Ltd – 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.
"RFR" means the rate specified as such in the Benchmark Terms.
---
"RFR Banking Day" means any day specified as such in the Benchmark Terms.
---
"RFR Replacement Event" means:
---
(a)	the methodology, formula or other means of determining the RFR has, in the reasonable opinion of the Lenders, materially changed;
---	---
(b)
---
(i)	the administrator of the RFR or its supervisor publicly announces that such administrator is insolvent; or
---	---
(ii)	information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of the RFR is insolvent,
---	---

provided that, in each case, at that time, there is no successor administrator to continue to provide the RFR;

(c)	the administrator of the RFR publicly announces that it has ceased or will cease, to provide the RFR permanently or indefinitely and, at that time, there is no successor administrator to continue to provide the RFR;
(d)	the supervisor of the administrator of the RFR publicly announces that the RFR has been or will be permanently or indefinitely discontinued; or
---	---
(e)	the administrator of the RFR or its supervisor publicly announces that the RFR may no longer be used; or
---	---
(f)	the administrator of the RFR (or the administrator of an interest rate which is a constituent element of the RFR) determines that the RFR should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
---	---
(i)	the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lenders) temporary; or
---	---
(ii)	the RFR is calculated in accordance with any such policy or arrangement for a period which is no less than 10 Additional Business Days.
---	---
"Sanctions" means any trade, economic or financial sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by:
---

(a)	the Security Council of the United Nations;
(b)	the United States;
---	---
(c)	the United Kingdom;
---	---
(d)	the European Union;
---	---
(e)	any member state of the European Union;
---	---
(f)	any country to which any Security Party or the Borrower or any affiliate of any of them is bound; or
---	---
(g)	the governments and official institutions or agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury ("OFAC"), the United States Department of State, and Her Majesty’s Treasury ("HMT")
---	---

((a) to (g) together "Sanctions Authorities" and each a “Sanctions Authority").

"Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, the "Consolidated List of Financial Sanctions Targets and Investment Ban List" maintained by HMT, or any similar list maintained by, or public announcement of a Sanctions designation made by, a Sanctions Authority, each as amended, supplemented or substituted from time to time.
"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 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:
---
(a)	the Market Value of the Ship; and
---	---
(b)	the net realisable value of any additional security provided at that time under Clause 15 (Security Cover),
---	---

at that time 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; 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, any 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".
---
"Security Period" means the period commencing on the date of this Agreement and ending on the date on which:
---
(a)	all amounts which have become due for payment by the 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 the Borrower nor any Security Party has any future or contingent liability under Clauses 20 (Fees and Expenses), 21 (Indemnities) or 22 (No Set-off or Tax Deduction) or any other provision of this Agreement or another Finance Document; and
---	---
(d)	the Agent confirms (acting reasonably and without inordinate delay) there is no 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.
---	---
"Security Trustee" means Hamburg Commercial Bank 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 (Appointment of a New Servicing Bank) of the Agency and Trust Agreement.
---
"Servicing Bank" means the Agent or the Security Trustee.
---
"Ship" means the 2018-built kamsarmax bulk carrier vessel built by Juangsu New YZJ of China registered in the ownership of the Borrower under the Marshall Islands flag with IMO Number 9739563 and with the name "EKATERINI".
---
"Total Loss" means:
---
(a)	actual, constructive, compromised, agreed or arranged total loss of the Ship;
---	---
(b)	any expropriation, confiscation, requisition or acquisition of the 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 one month from the date of such occurrence redelivered to the full control of the Borrower;
---	---
(c)	any condemnation of the Ship by any tribunal or by any person or person claiming to be a tribunal; and
---	---
(d)	any arrest, capture, seizure, confiscation or detention of the Ship (including any hijacking or theft) unless it is within 60 calendar days redelivered to the full control of the Borrower.
---	---
"Total Loss Date" means:
---
(a)	in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;
---	---
(b)	in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earlier of:
---	---
(i)	the date on which a notice of abandonment is given to the insurers; and
---	---
(ii)	the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the 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.
---	---
"Transfer Certificate" has the meaning given in Clause 26.2 (Transfer by a Lender).
---
"Trust Property" has the meaning given in clause 3.1 (Definition of Trust Property) of the Agency and Trust Agreement.
---
"UK Bail-In Legislation" means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
---
"Underlying Documents" means any Assignable Charter and the Management Agreement.
---
"US" means the United States of America.
---
"US Tax Obligor" means:
---
(a)	a person which is resident for tax purposes in the US; or
---	---
(b)	a person some or all whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
---	---
"Write-down and Conversion Powers" means:
---
(a)	in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
---	---

(b)	in relation to any other applicable Bail-In Legislation other than the UK Bail In Legislation:
(i)	any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---
(ii)	any similar or analogous powers under that Bail-In Legislation; and
---	---
(c)	in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers.
---	---
1.2.	Construction of certain terms
---	---

In this Agreement:

(a)	a reference to:
"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 at its discretion (acting reasonably);
---
"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 or fax;
"excess risks" means, in relation to the 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 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 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, in relation to the Ship, all insurances effected, or which the Borrower 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”);
---
"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 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 1 of the Institute Time Clauses (Hulls) (1/10/82) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
---
"regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency (monetary or otherwise), department, central bank, regulatory, self-regulatory or other authority or organisation;
---

"subsidiary" has the meaning given in Clause 1.4 (Meaning of “subsidiary”);
"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;
---
"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);
---
(b)	a Lender's "cost of funds" in relation to its participation in the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan or the relevant part of the Loan for a period equal in length to the Interest Period of the Loan or the relevant part of the Loan;
---	---
(c)	a reference to a page or screen of an information service displaying a rate shall include:
---	---
(i)	any replacement page of that information service which displays that rate; and
---	---
(ii)	the appropriate page of such other information service which displays that rate from time to time in place of that information service,
---	---

and if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Agent after consultation with the Borrower;

(d)	a reference to a "Central Bank Rate" shall include any successor rate to, or replacement rate for, that rate;
(e)	any Benchmark Terms Supplement overrides anything in:
---	---

(i)	Schedule 7 (Benchmark Terms); or
(ii)	any earlier Benchmark Terms Supplement; and
---	---
(f)	a Compounding Methodology Supplement relating to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate overrides anything relating to that rate in:
---	---
(i)	Schedule 8 (Daily Non-Cumulative Compounded RFR Rate) or Schedule 9 (Cumulative Compounded RFR Rate), as the case may be; or
---	---
(ii)	any earlier Compounding Methodology Supplement.
---	---
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)	other than where paragraph (b) below applies:
(i)	(subject to sub-paragraph (a)(ii) and (iii) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
---	---
(ii)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
---	---
(iii)	if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end; and
---	---
(b)	in relation to an Interest Period for the Loan or any part of the Loan (or any other period for the accrual of commission or fees) for which there are rules specified as "Business Day Conventions" in the Benchmark Terms, those rules shall apply.
---	---

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;
---	---
(d)	in relation to each Creditor Party that is incorporated in Germany or otherwise notifies the Agent that it has become subject to the regulation below (each a "Restricted Lender"), each Clause referring to Sanctions and/or Restricted Party shall only apply for the benefit of that Restricted Lender to the extent that the relevant sanctions provisions would not result in (i) any violation of, conflict with or liability under EU Regulation (EC) 2271/96 or (ii) a violation or conflict with section 7 foreign trade rules (AWV) (Auβenwirtschaftsverordnung) (in connection with section 2 paragraph 15 trade law (AWG) Auβenwirtschaftsgesetz)) or a similar anti-boycott statute (the "Mandatory Restrictions"). In connection with any determination or direction relating to any part of a Clause of which a Restricted Lender does not have the benefit due to a Mandatory Restriction, and any consequential determinations to be made or actions to be taken as a result of the initial determination or action relating to any part of that Clause, for so long as they remain subject to a Mandatory Restriction, the commitments of that Restricted Lender will be excluded for the purpose of determining whether the consent of the Lenders has been obtained or whether the determination or direction by the Lenders has been made; and
---	---
(e)	Clauses 1.1 (Definitions) to 1.5 (General Interpretation) apply unless the contrary intention appears.
---	---
(f)	a Default or an Event of Default is “continuing” if it has not been remedied or waived and if enforcement proceedings have commended by any of the Creditor Parties in respect of any rights or Security Interest created by a Finance Document then a Default or an Event of Default is “continuing” if it has not been waived.
---	---

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 available to the Borrower a senior secured term loan facility of up to $14,000,000 in a single advance, for the purpose stated in the preamble to this Agreement.

2.2	Lenders' participations in the Loan

Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

2.3.	Purpose of Loan

The Borrower undertakes with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.

3.	POSITION OF THE LENDERS
3.1.	Interests several
---	---

The rights of the Lenders under this Agreement are several.

3.2.	Individual right of action

Each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining the Agent, the Security Trustee or any other Lender as additional parties in the proceedings.

3.3	Proceedings requiring Majority Lender consent

Except as provided in Clause 3.2 (Individual right of action), no Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.

3.4	Obligations several

The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:

(a)	the obligations of the other Lenders being increased; nor
(b)	the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;
---	---

and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.

4.	DRAWDOWN
4.1	Request for the Loan
---	---

Subject to the following conditions, the Borrower may request the Loan to be borrowed by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Hamburg time) three (3) Business Days prior to the Drawdown Date.

4.2	Availability

The conditions referred to in Clause 4.1 (Request for the Loan) are that:

(a)	the Drawdown Date has to be a Business Day during the Availability Period;
(b)	the amount of the Loan shall not exceed the Maximum Loan Amount;
---	---
(c)	any undrawn portion of the Total Commitments in respect of the Loan, upon the determination of the Initial Market Value of the Ship, shall be automatically cancelled as at the Drawdown Date; and
---	---
(d)	the amount of the Loan 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 the Drawdown Notice and shall inform each Lender of:

(a)	the amount of the Loan and the Drawdown Date;
(b)	the amount of that Lender's participation in the Loan; and
---	---
(c)	the duration of the first Interest Period.
---	---

4.4	Drawdown Notice irrevocable

The Drawdown Notice must be signed by a duly authorised signatory of the Borrower; and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Lenders.

4.5	Lenders to make available Contributions

Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on the Drawdown Date under Clause 2.2 (Lenders’ participations in the Loan).

4.6	Disbursement of the Loan

Subject to the provisions of this Agreement, the Agent shall on the 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:

(a)	to the account which the Borrower specifies in the Drawdown Notice; and
(b)	in like funds as the Agent received the payments from the Lenders.
---	---

The payment by the Agent under this Clause 4.6 (Disbursement of the Loan) shall constitute the making of the Loan and the Borrower shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's participation in the Loan.

5.	INTEREST
5.1	Payment of normal interest
---	---

Subject to the provisions of this Agreement, interest on the Loan in respect of an Interest Period shall be paid by the Borrower on the last day of that Interest Period.

5.2	Normal rate of interest

The rate of interest on the Loan or any part of the Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of:

(a)	the Margin; and
(b)	the Compounded Reference Rate for that day.
---	---

If any day during an Interest Period for the Loan or any part of the Loan is not a RFR Banking Day, the rate of interest on the Loan or any part of the Loan for that day will be the rate applicable to the immediately preceding RFR Banking Day.

5.3	Payment of accrued interest

In the case of an Interest Period longer than three months (subject to the prior agreement of the Agent in accordance with Clause 6.2(b) (Duration of normal Interest Periods)), accrued interest shall be paid every three months during that Interest Period and on the last day of that Interest Period.

5.4	Notifications
(a)	The Agent shall promptly upon an Interest Payment being determinable notify:
---	---
(i)	the Borrower of that Interest Payment;
---	---
(ii)	each Lender of the proportion of that Interest Payment which relates to that Lender's participation in the relevant part of the Loan; and
---	---
(iii)	each Lender and the Borrower of, to the extent it is then determinable, the Market Disruption Rate (if any) relating to the Loan or the relevant part of the Loan.
---	---

This paragraph (a) shall not apply to any Interest Payment determined pursuant to Clause 5.7 (Cost of funds).

(b)	The Agent shall promptly notify the Borrower of each rate of interest notified pursuant to sub- (a)(ii) of Clause 5.7 (Cost of funds) relating to the Loan or any part of the Loan.
(c)	The Agent shall promptly notify each Lender and the Borrower of the determination of a rate of interest relating to the Loan or any part of the Loan to which Clause 5.7 (Costof funds) applies.
---	---
(d)	This Clause 5.4 (Notifications) shall not require the Agent to make any notification to any Party on a day which is not a Business Day.
---	---
(e)	No Interest Period for the Loan or any part of the Loan shall be longer than three Months.
---	---
5.5	Interest calculation if no RFR or Central Bank Rate
---	---

If:

(a)	there is no RFR or Central Bank Rate for the purposes of calculating the Daily Non-Cumulative Compounded RFR Rate for an RFR Banking Day during an Interest Period for the Loan or any part of the Loan; and
(b)	"Cost of funds will apply as a fallback" is specified in the Benchmark Terms,
---	---

Clause 5.7 (Cost of funds) shall apply to the Loan or the relevant part of the Loan for that Interest Period.

5.6	Market disruption

If:

(a)	a Market Disruption Rate is specified in the Benchmark Terms; and
(b)	before the Reporting Time for the Loan, the Agent receives notifications from a Lender or Lenders (whose Contributions exceed 10 per cent. of the Loan) that its cost of funds relating to its participation in the Loan would be in excess of that Market Disruption Rate,
---	---

then Clause 5.7 (Cost of funds) shall apply to the Loan or the relevant part of the Loan.

5.7	Cost of funds
(a)	If this Clause 5.7 (Cost of funds) applies to the Loan or any part of the Loan for an Interest Period, Clause 5.2 (Normal rate of interest) shall not apply to the Loan or the relevant part of the Loan for that Interest Period and the rate of interest on the Loan or the relevant part of the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:
---	---
(i)	the Margin; and
---	---
(ii)	the rate notified to the Agent by each Lender as soon as practicable and in any event by the Reporting Time,
---	---

to be that which expresses as a percentage rate per annum its cost of funds relating to its participation in the Loan or the relevant part of the Loan.

(b)	If this Clause 5.7 (Cost of funds) applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
(c)	Subject to Clause 27.4 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
---	---
(d)	If paragraph (e) below does not apply and any rate notified to the Agent under sub‑paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
---	---
(e)	If this Clause 5.7 (Cost of funds) applies pursuant to Clause 5.6 (Market disruption) and:
---	---
(i)	a Lender's rate notified pursuant to sub-paragraph (ii) of paragraph (a) above is less than the relevant Cumulative Compounded RFR Rate; or
---	---
(ii)	a Lender does not notify a rate to the Agent by the time specified in sub-paragraph (ii) of paragraph (a) above,
---	---

that Lender's cost of funds relating to its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of sub-paragraph (ii) of paragraph (a) above, to be the Cumulative Compounded RFR Rate for the Loan or the relevant part of the Loan.

(f)	If this Clause 5.7 (Cost of funds) applies, the Agent shall, as soon as practicable, notify the Borrower.
5.8	Notice of prepayment
---	---

If the Borrower does not agree with an interest rate set by the Agent under Clause 5.7 (Cost of funds), the Borrower may give the Agent not less than five (5) Business Days' notice of their intention to prepay the Loan at the end of the interest period set by the Agent.

5.9	Prepayment; termination of Commitments

A notice under Clause 5.8 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrower’s 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 relevant Lender shall be cancelled; and
(b)	on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the relevant Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin.
---	---
5.10	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 the Loan shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the last day of the preceding Interest Period.

6.2	Duration of normal Interest Periods

Subject to Clauses 6.3 (Duration of Interest Periods for Instalments) and 6.4 (Non-availability of matching deposits for Interest Period selected), each Interest Period shall be:

a.	3 months; or
b.	such other period (as proposed by the Borrower to the Agent not later than 11:00 a.m. (Hamburg time)) five (5) Business Days before the commencement of the relevant Interest Period as the Agent may, in its sole discretion, agree with the Borrower (failing which the Interest Period shall be three months).
---	---

6.3	Duration of Interest Periods for Instalments

In respect of an amount due to be repaid under Clause 8 (Repayment and Prepayment) on a particular Repayment Date, an Interest Period in respect of the Loan 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 Borrower has proposed and the Lenders have agreed an Interest Period longer than three months, any Lender notifies the Agent by 11.00 a.m. (Hamburg time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the Relevant Market when the Interest Period commences, the Interest Period shall be of three 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 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
---	---

unless:

(i)	its failure to pay is caused by administrative or technical error or a Disruption Event; and
(ii)	payment is made within three calendar days.
---	---
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 2.00 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) (Calculation of default rate of interest) and 7.3(b) (Calculation of default rate of interest); or
(b)	in the case of any other overdue amount, the rate set out at Clause 7.3(b) (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 applicable to it);
(b)	the aggregate of the Margin plus, in respect of successive Interest Periods of any duration up to three months which the Agent may select from time to time, a rate from time to time determined by the Agent by reference to each Lender’s “cost of funds” (as such term is referred to in paragraph (b) of Clause 1.2 (Construction of certain terms)).
---	---
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 Interest Period selected by the Agent for the purposes of paragraph 7.3(b) (Calculation of default rate of interest) of that Clause; but this 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 Interest 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 Interest Period by reference to which it was determined shall thereupon be compounded.

8.	REPAYMENT AND PREPAYMENT
8.1	Amount of Instalments
---	---

The Borrower shall repay the Loan by:

(a)	16 equal consecutive quarterly instalments, each in the amount of $240,000 (each an "Instalment" and, together, the "Instalments"); and

(b)	a balloon instalment in an amount equal to $10,160,000 (the "Balloon Instalment");

Provided that if the amount of the Loan advanced is less than $14,000,000, the aggregate amount of the Instalments and the Balloon Instalment shall be reduced by an amount equal to the undrawn amount on a pro rata basis.

8.2	Repayment Dates

The first Instalment shall be repaid on the date falling three months after the Drawdown Date, each subsequent Instalment shall be repaid at three-monthly intervals thereafter and the last Instalment together with the Balloon Instalment 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 on the last day of an Interest Period.

8.5	Conditions for voluntary prepayment

The conditions referred to in Clause 8.4 (Voluntary prepayment) are that:

(a)	a partial prepayment shall be $250,000 or a higher integral multiple thereof or such other amount acceptable to the Agent in its reasonable discretion;
(b)	the Agent has received from the Borrower at least five (5) Business Days' prior irrevocable written notice (each, a "Prepayment Notice") specifying the amount to be prepaid and the date on which the prepayment is to be made;
---	---
(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 regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with; and
---	---
(d)	the Borrower is in compliance with Clause 8.10 (Amounts payable on prepayment) on or prior to the date of prepayment.
---	---
8.6	Optional facility cancellation
---	---

The Borrower shall be entitled, upon giving to the Agent not less than five (5) Business Days' prior written notice, to cancel, in whole or in part, and, if in part, by an aggregate amount not less than $250,000 or a higher multiple thereof (or such other amount acceptable to the Agent in its reasonable discretion), the undrawn balance of the Total Commitments (the "Cancellation Notice") which notice shall be irrevocable. 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 Borrower under Clause 8.5(c) (Conditions for voluntary prepayment).

8.8	Mandatory prepayment

The Borrower shall be obliged to prepay the Loan if the Ship:

(a)	is sold, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or
(b)	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	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 Borrower 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)	A prepayment shall be made, subject to paragraph (b) below, 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 Clause 21.2 (Break Costs)) but without premium or penalty.
---	---
(b)	Any accrued interest on the amount prepaid shall be paid:
---	---
(i)	in case of partial prepayment of the Loan, on the last day of the then current Interest Period; and
---	---
(ii)	in case of full prepayment of the Loan, on the date of such prepayment.
---	---

8.11	Application of partial prepayment or cancellation

Each partial prepayment shall be applied against the Instalments which are at the time being outstanding and the Balloon Instalment on a pro-rata basis.

8.12	No reborrowing

No amount prepaid or cancelled may be (re)borrowed.

9.	CONDITIONS PRECEDENT
9.1	Documents, fees and no default
---	---

Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:

(a)	that, on or before the service of the Drawdown Notice, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
(b)	that, on the Drawdown Date but prior to the making of the Loan, the Agent receives;
---	---
(i)	the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers save for any documents that the Agent agrees at the Borrower’s request to receive after any prepositioning of the Loan but before its disbursement to the Borrower; and
---	---
(ii)	payment in full of the fees payable by the Borrower pursuant to Clause 20.1 (Structuring and commitment fees), which are due and payable on the Drawdown Date;
---	---
(c)	that both at the date of the Drawdown Notice and at the Drawdown Date and, if applicable, the date on which the Loan is disbursed:
---	---
(i)	no Event of Default or Potential Event of 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;
---	---
(iii)	none of the circumstances contemplated by Clause 5.6 (Market disruption) has occurred and is continuing; and
---	---
(iv)	there has been no Material Adverse Change; and
---	---
(d)	that if the Security Cover Ratio were applied immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
---	---

(e)	that the Agent has received, and found to be reasonably 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, reasonably 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 the Loan 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 five (5) Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).

9.3	Conditions subsequent

The Borrower undertakes to pay within 30 calendar days after receipt of the relevant invoices any documented expenses payable pursuant to Clause 20.2 (Costs of negotiation, preparation etc.).

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, validly existing and in good standing under the laws of the Republic of the Marshall Islands and neither the Borrower nor any Security Party (except for the Corporate Guarantor which is a US NASDAQ listed entity) is a US Tax Obligor.

10.3	Share capital and ownership

The Borrower is authorised to issue 500 registered shares of no par value, all of which shares have been issued fully paid in registered form, and the legal title of all of those shares is held, free of any Security Interest or other claim, by the Corporate Guarantor.

10.4	Corporate power

The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a)	to execute the Underlying Documents which it is a party and to maintain its Ship registered in its ownership under the applicable Approved Flag;
(b)	to execute the Finance Documents to which it is a party; and
---	---

(c)	to borrow under this 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
---	---

All the consents referred to in Clause 10.4 (Corporate power) 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 the 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 the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
(b)	create legal, valid and binding Security Interests (having the priority specified in the relevant Finance Document) 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 (Legal validity; effective Security Interests), at the time of the execution and delivery of each Finance Document to which the Borrower is a party:

(a)	the 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 Liens) 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 the Borrower and each other Security Party of each Finance Document and each Underlying Document to which it is a party, and the borrowing by the Borrower of the Loan (or any part thereof), and its compliance with each Finance Document and each Underlying Document to which it is a party:

(a)	will not involve or lead to a contravention of:
(i)	any law or regulation; or
---	---

(ii)	the constitutional documents of the Borrower or any Security Party; or
(iii)	any contractual or other obligation or restriction which is binding on the Borrower or any Security Party or any of its assets, and
---	---
(b)	will not have a Material Adverse Effect; and
---	---
(c)	is for the corporate benefit of the Borrower or the relevant Security Party.
---	---
10.9	No withholding taxes
---	---

All payments which the 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 and is continuing.

10.11	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 and financial statements which have been so provided satisfied the requirements of Clause 11.7 (Form of financial statements) and are true, correct and not misleading and present fairly and accurately the financial position of the Borrower the Corporate Guarantor or the Group (as the case may be); and there has been no change in the financial position or state of affairs of the 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 the Borrower or any Security Party (including action relating to any 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 would, in either case, be likely to have a Material Adverse Effect.

10.13	Validity and completeness of the Underlying Documents

Each of the Underlying Documents constitutes or, as the case may be, shall constitute upon its execution, valid, binding and enforceable obligations of the parties thereto in accordance with its terms and:

(a)	each of the copies of the Underlying Documents delivered to the Agent before the date of this Agreement is a true and complete copy; and
(b)	no amendments or additions to an Underlying Document have been agreed nor has any party which is the party to an Underlying Document waived any of its respective rights thereunder.
---	---
10.14	Compliance with certain undertakings
---	---

At the date of this Agreement, the Borrower is in compliance with Clauses 11.2 (Title and negative pledge), 11.4 (No other liabilities or obligations to be incurred), 11.9 (Consents), 11.13 (Principal place of business), 13 (Insurance), 14.3 (Repair and classification) and 14.10 (Compliance with laws etc.).

10.15	Taxes paid

The Borrower has paid all taxes applicable to, or imposed on or in relation to it, its business or the Ship.

10.16	ISM Code and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Corporate Guarantor, the Approved Manager and the Ship have been complied with.

10.17	No Money laundering
(a)	The Borrower has not and, to the extent applicable, no Security Party has, in connection with this Agreement or any of the other Finance Documents, contravened, or permitted 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 2015/849/EC of the European Parliament and of the Council of the European Union of 20 May 2015) and any comparable US federal and state laws.
---	---
(b)	The Borrower confirms to the Agent 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).
---	---
10.18	No immunity
---	---

Neither the Borrower nor any of its assets is entitled to immunity on grounds of sovereignty or otherwise from any legal action or proceeding (including, without limitation, suit, attachment prior to judgement, execution or other enforcement).

10.19	Choice of law

The choice of the laws of England to govern this 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 Mortgage, constitutes a valid choice of law and the submission by the Borrower or, as the case may be, the relevant Security Parties thereunder to the exclusive jurisdiction of the Courts of England and, in the case of the Account Pledges, Germany or, in the case of the Mortgage, the applicable Approved Flag State is a valid submission and does not contravene the laws of England or, in the case of the Account Pledges, Germany or, in the case of the Mortgage, the applicable Approved Flag State or the laws of any other Pertinent Jurisdiction, will be applied by the courts of any Pertinent Jurisdiction if this 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 Mortgage, the applicable Approved Flag State.

10.20	Pari passu ranking

The obligations of the Borrower and each Security Party under the Finance Documents to which it is a party are direct, general and unconditional obligations and 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.

10.21	Sanctions
(a)	Neither the Borrower, nor any Security Party, nor any member of the Group or any of their respective directors or officers or, to the Borrower’s or the relevant Security Party’s or the relevant member of the Group’s best knowledge (after due and careful inquiry and, in the case of agents, after reasonable due diligence), any of the Borrower’s or such Security Party’s or such member of the Group’s employees, affiliates, agents or representatives:
---	---
(i)	is a Restricted Party;
---	---
(ii)	has been engaged in any transaction, activity or conduct that could reasonably be expected to result in its becoming a Restricted Party;
---	---
(iii)	has or intends to have any business operations or other dealings:
---	---
(A)	in any Sanctioned Country which may result in a violation of any Sanctions applicable to it; or
---	---

(B)	with any Specially Designated National (SDN) on OFAC’s SDN list or with a designated person targeted by asset freeze sanctions imposed by the UN, EU or HMT or owned or controlled by any such SDN or designated person;
(iv)	has received notice of, or is otherwise aware of, any claim, action, suit, proceedings or investigation involving it with respect to Sanctions; and/or
---	---
(v)	is acting on behalf of or at the direction of any Restricted Party.
---	---
(b)	Each Security Paty and each member of the Group, has taken, to the extent applicable to it, reasonable measures to ensure compliance with any Sanctions and will not use any part of the proceeds from the Loan or any part of the Loan in a manner which may result in a violation of any Sanctions by any person.
---	---
(c)	The representations and warranties provided for in this Clause 10.21 (Sanctions) are only given by, and/or (as applicable) shall only apply to any Security Party and any member of the Group which is a German Relevant Person (as defined in Clause 19.9 (Relevant Persons)) or any other Security Party or member of the Group bound by any applicable statutory anti-boycott law or regulation insofar as the giving of and compliance with such representations and warranties do not and will not result in a violation of or conflict with or liability under section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung, AWV) (in conjunction with section 4 and section 19 paragraph 3 no. 1 a) of the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG)), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation.
---	---
(d)	In relation to a Restricted Lender, the representations and warranties provided for in this Clause 10.21 (Sanctions) shall only apply for the benefit of that Restricted Lender to the extent that such benefit and the exercise of any rights based on such representations and warranties will not result in a violation of or conflict with or liability under section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung, AWV) (in conjunction with section 4 and section 19 paragraph 3 no. 1 a) of the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG)), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation. In connection with any amendment, waiver, determination or direction relating to any part of this Clause 10.21 (Sanctions) of which a Restricted Lender does not have the benefit, the commitments of that Restricted Lender will be disregarded for all purposes when determining whether the consent of the Majority Lenders or such other applicable quorum has been obtained or whether the determination or direction by the Majority Lenders or such other applicable quorum has been made.
---	---

10.22	Repetition

The representations and warranties in this Clause 10 (Representations and Warranties) shall be deemed to be repeated by the Borrower:

a.	on the date of service of the Drawdown Notice;
b.	on the Drawdown Date; and
---	---
c.	with the exception of Clauses 10.9 (No withholding taxes) and 10.14 (Compliance with certain undertakings), on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to Clause 11.21 (Compliance Certificate), as if made with reference to the facts and circumstances existing on each such day.
---	---
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 except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.

11.2	Title and negative pledge

The Borrower will:

(a)	hold the legal title to the Ship, 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 Liens; and
(b)	not create or permit to arise any Security Interest (except for Permitted Liens) over any other asset, present or future.
---	---
11.3	No disposal of assets
---	---

The Borrower will not transfer, lease or otherwise dispose of:

(a)	all or a substantial part of its assets (except of cash), 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:

(i)	any charter of the Ship; and
(ii)	any sale of the Ship, subject to (A) the net sale proceeds of such sale being in an amount sufficient to make the mandatory prepayment of the Loan pursuant to Clause 8.8 (Mandatory Prepayment) and (B) no Event of Default having occurred and is continuing at the relevant time.
---	---
11.4	No other liabilities or obligations to be incurred
---	---

The Borrower will not enter into any investments, any sale or leaseback agreements, participation in speculative transactions or any off-balance sheet transactions and will not 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 the Underlying Documents to which it is or, as the case may be, will be a party; and
(b)	liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Ship (including, without limitation, any Financial Indebtedness owing to its shareholder(s) subject to the Borrower ensuring on or prior to the Drawdown Date or, as the case may be, prior to the incurrence of any such Financial Indebtedness, that the rights of each creditor thereunder are fully subordinated in writing to the satisfaction of the Agent.
---	---
11.5	Information provided to be accurate
---	---

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 the Borrower under or in connection with any Finance Document will be true, correct and not misleading and will not omit any material fact or consideration.

11.6	Provision of financial statements

The 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 the Financial Year of the Corporate Guarantor, the consolidated audited annual financial statements of the Corporate Guarantor and its subsidiaries (including the Borrower) for that Financial Year, commencing with the financial statements for the Financial Year ending on 31 December 2023; and

(b)	as soon as possible, but in no event later than 90 days after the end of the 6-month period ending on 30 June in each Financial Year of the Corporate Guarantor, the semi-annual consolidated unaudited financial statements in respect of the Corporate Guarantor and its subsidiaries (including the Borrower), for that 6-month period (commencing with the 6-month period ending on 30 June 2023), duly certified as to their correctness by an officer of the Corporate Guarantor; and
(c)	promptly after each request by the Agent, such further financial or other information in respect of the Borrower, the 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, charter agreements and operational expenditure for the Ship) as may be reasonably requested by the Agent.
---	---
11.7	Form of financial statements
---	---

All accounts delivered under Clause 11.6 (Provision of financial statements) will:

(a)	be prepared in accordance with all applicable laws and GAAP and, in the case of any consolidated audited financial statements, be certified by an independent and reputable auditor having requisite experience selected and appointed by the Borrower and the Corporate Guarantor;
(b)	fairly represent the financial condition of the Corporate Guarantor 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 Corporate Guarantor and any of their subsidiaries.
---	---
11.8	Shareholder and creditor notices
---	---

The Borrower will send the Agent promptly upon its request copies of all communications which are despatched to the Borrower's shareholders or creditors or any class of them and any press releases with respect to the Corporate Guarantor.

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 required:

(a)	for the Borrower to perform its obligations under any Finance Document or any Underlying Document to which it is a party;

(b)	for the validity or enforceability of any Finance Document or any Underlying Document to which it is a party;
(c)	for the Borrower to continue to own and operate the Ship,
---	---

and the Borrower will comply with the terms of all such consents.

11.10	Maintenance of Security Interests

The Borrower will:

(a)	at its own cost, do 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 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
---	---

The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, the Ship, the Earnings or the Insurances in respect of the Ship, any Security Party or any Approved Manager, 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 have any Material Adverse Effect on the financial position of the Borrower and/or its ability to perform its payment or other obligations under any Finance Document as they fall due, and the Borrower shall procure that all reasonable measures are taken to defend any such legal or administrative action.

11.12	No amendment to Underlying Documents

The Borrower will not agree to any material amendment or supplement to, or waive or fail to enforce, the Underlying Documents to which it is a party or any of its provisions and promptly notify the Agent of any amendment or supplement to any Underlying Document Provided that for the purposes of this clause a material amendment, variation or supplement will include (without limitation):

(a)	in respect of an Assignable Charter, a decrease in the charter hire, a reduction of the tenor and any amendment limiting the Security Trustee’s termination rights or expanding the relevant charterer’s termination rights;
(b)	in respect of the Management Agreement, an amendment to the terms relating to the termination of the Management Agreement, the outsourcing of services to a sub-manager, the reduction of the scope of the services provided by the relevant Approved Manager under the relevant Management Agreement or the governing law of the Management Agreement, provided that no consent will be required if any services so outsourced or reduced are assumed by a substitute Approved Manager and such substitute Approved Manager provides a Manager's Undertaking and such other documents described in paragraphs 2 to 5 and 10 of Part A of Schedule 3 (Condition Precedent Documents) and paragraphs 3(a)and 3(b) of Part B of Schedule 3 (Condition Precedent Documents).
---	---
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 in Clause 28.2(a) (Addresses for communications); and the Borrower will not establish, nor do anything as a result of which it would be deemed to have, a place of business in any country other than Greece.

11.14	Confirmation of no default

The Borrower will, within three Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an officer of the Borrower and which:

(a)	states that no Event of Default or Potential Event of Default has occurred and is continuing; or
(b)	states that no Event of Default or Potential Event of 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 11.14 (Confirmation of no default) 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 11.14 (Confirmation of no default) 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 Potential Event of Default and is continuing; or
(b)	any matter which indicates that an Event of Default or a Potential Event of Default may have occurred and is continuing,
---	---

and will keep the Agent fully up-to-date with all developments.

11.16	Provision of further information

The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:

(a)	to the Borrower, the Ship, the Earnings or the Insurances; or
(b)	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.

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 one copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrower will provide an official English translation thereof.

11.18	"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 or change in the internal policy of any Creditor Party made after the date of this Agreement;
(b)	any change in the composition of the shareholders of the Borrower or any Security Party (other than the Corporate Guarantor for as long as it remains a US NASDAQ publicly listed company) 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 Borrower 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.

11.19	Minimum Liquidity and Additional Minimum Liquidity

The Borrower shall maintain in the Minimum Liquidity Account credit balances (which may be fixed on a time deposit basis on commercial terms and interest rates to be mutually agreed between the Borrower and the Agent (acting on the instructions of the Lenders)) in an aggregate amount of:

(a)	not less than $200,000 (the "Minimum Liquidity"), commencing from the Drawdown Date and at all times thereafter throughout the remainder of the Security Period; and
(b)	in addition to the amount required to be maintained under paragraph (a)(i) of this Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity), an additional amount equal to $200,000 (the "Additional Minimum Liquidity") commencing from the Drawdown Date and at all times thereafter Provided that:
---	---
(i)	50 per cent. of the Additional Minimum Liquidity may be released at the request and to the order of the Borrower, subject to the satisfaction of the following conditions:
---	---
(A)	the Borrower has repaid in full the first four Instalments; and
---	---
(B)	no Event of Default or Potential Event of Default having occurred and is continuing at the time or will occur as a result of such release; and
---	---

(ii)	the remaining 50 per cent. of the Additional Minimum Liquidity may be released at the request and to the order of the Borrower, subject to the satisfaction of the following conditions:
(A)	the Borrower has repaid in full the first eight Instalments; and
---	---
(B)	no Event of Default or Potential Event of Default having occurred and is continuing at the time or will occur as a result of such release.
---	---
11.20	Dry Docking Reserve Amount
---	---
(a)	The Borrower shall accumulate in the Dry Docking Reserve Account credit balances to meet the anticipated dry docking, special survey fees, expenses and costs for the Ship (the "Dry Docking Reserve Amount") by paying in the Dry Docking Reserve Account equal consecutive quarterly instalments, each in an amount of $20,000, the first of which shall be paid on the date of payment of the fourth Instalment and each subsequent instalment shall be paid at three-monthly intervals thereafter until the end of the Security Period.
---	---
(b)	The Dry Docking Reserve Amount (or any relevant part thereof) may only be withdrawn from the Dry Docking Reserve Account with the prior written consent of the Agent (such consent not to be unreasonably withheld) for the purpose of covering the incurred and documented (in the form of copies of invoices and/or pro-forma invoices in form and substance satisfactory to the Agent) costs and expenses for the next and any subsequent special survey/intermediate survey and dry-docking of the ShipProvided that no Event of Default or Potential Event of Default has occurred or is continuing at that time or will occur as a result of any such withdrawal.
---	---
11.21	Compliance Certificate
---	---
(a)	The Borrower shall supply to the Agent, together with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11.6 (Provision of financial statements), a Compliance Certificate (commencing with the financial statements for the period ending on 30 June 2023).
---	---
(b)	Each Compliance Certificate shall be duly signed by one officer of the Borrower and the Corporate Guarantor, evidencing (inter alia) the Borrower's compliance (or not, as the case may be) with the provisions of Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity), Clause 11.20 (Dry Docking Reserve Amount) and Clause 15.1 (Minimum required security cover).
---	---

11.22	No Money laundering
(a)	The Borrower:
---	---
(i)	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 2015/849/EC of the European Parliament and of the Council of the European Union of 20 May 2015) and any comparable US federal and state laws; and
---	---
(ii)	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.
---	---
(b)	The Borrower:
---	---
(i)	shall confirm to the Agent 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); and
---	---
(ii)	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.
---	---
(c)	The Agent shall promptly notify the Lenders of any written notice it receives under sub-paragraph (b)(ii) above.
---	---
11.23	Sanctions
---	---
(a)	The Borrower undertakes that it will not, directly or indirectly,
---	---
(i)	engage in any activities in conflict with or in violation of any Sanctions and, in particular,
---	---
(ii)	use the proceeds of the Loan or any part of the Loan to lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person that is a Restricted Party;
---	---
(iii)	directly or indirectly fund all or part of any repayment or prepayment of the Loan with funds that are the property of, are beneficially owned directly or indirectly by, or are derived from any transaction with or action involving a Restricted Party; or
---	---

(iv)	otherwise act in any manner with respect to such proceeds which would result in a violation by any person (including any Finance Party or any person participating in the transaction, whether as initial purchaser, advisor, investor or otherwise) of Sanctions.
(b)	The undertakings provided for in this Clause 11.23 (Sanctions) are only given by, and/or (as applicable) shall only apply to, any member of the Group which is a German Relevant Person or any other member of the Group bound by any applicable statutory anti-boycott law or regulation insofar as the giving of and compliance with such undertakings do not and will not result in a violation of or conflict with or liability under section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung, AWV) (in conjunction with section 4 and section 19 paragraph 3 no. 1 a) of the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG)), any provision of Council Regulation (EC) 2271/96 or any other applicable anti-boycott or similar applicable laws or regulation.
---	---
(c)	In relation to a Restricted Lender, the undertakings provided for in this Clause 11.23 (Sanctions) shall only apply for the benefit of that Restricted Lender to the extent that such benefit and the exercise of any rights based on such undertakings will not result in a violation of or conflict with or liability under section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung, AWV) (in conjunction with section 4 and section 19 paragraph 3 no. 1 a) of the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG)), any provision of Council Regulation (EC) 2271/96 or any similar applicable anti-boycott law or regulation. In connection with any amendment, waiver, determination or direction relating to any part of this Clause 11.23 (Sanctions) of which a Restricted Lender does not have the benefit, the Commitments of that Restricted Lender will be disregarded for all purposes when determining whether the consent of the Majority Lenders (or such other applicable quorum) has been obtained or whether the determination or direction by the Majority Lenders (or such other applicable quorum) has been made.
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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, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.

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	Negative undertakings

The Borrower will not:

(a)	change the nature of its business or carry on any type of business other than the ownership, chartering and operation of the Ship;
(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 and is continuing 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 any redemption, purchase or return of share capital;
---	---
(c)	provide any form of credit or financial assistance to:
---	---
(i)	a person who is directly or indirectly interested in the Borrower'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 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 other than in compliance with Clauses 19.1(k) (Events of Default) and 11.18 (“Know your customer”checks);
---	---
(f)	acquire any shares or other securities other than short term debt obligations or Treasury bills issued by the US, the UK or a Participating Member State and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative;
---	---
(g)	enter into any form of amalgamation, merger or de-merger, acquisition, divestiture, split-up or any form of reconstruction or reorganisation; or
---	---
(h)	change, or allow the Corporate Guarantor to change, its auditors without the Agent's prior written consent (such consent not to be unreasonably withheld or delayed) or its Financial Year.
---	---

12.4	Subsidiaries

The Borrower will provide the Agent on or before the date of this Agreement with a list of each member of the Group at the date of this Agreement and will promptly advise the Agent in writing of any amendment to such a list.

13.	INSURANCE
13.1	General
---	---

The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 (Insurance) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing.

13.2	Maintenance of obligatory insurances

The Borrower shall keep the Ship insured at its expense 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 of the Ship, piracy and terrorism);
---	---
(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 the Borrower.
---	---
13.3	Terms of obligatory insurances
---	---

The Borrower shall effect such insurances in such amounts in such currency and upon such terms and conditions as shall from time to time be reasonably 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 is equal to 120 per cent. of the aggregate of:
---	---
(A)	the Loan; and
---	---

(B)	the principal amount secured by prior ranking mortgages over the Ship which have an equal or prior ranking to the Security Interests created by the Finance Documents on the Ship; and
(ii)	the Market Value of the 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 the 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; and
---	---
(g)	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 Clubs.
---	---
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 use its best endeavours 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 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 the 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 the 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.
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13.5	Renewal of obligatory insurances
---	---

The 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 the 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
---	---

The Borrower shall use its best endeavours to 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 (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 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 under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the 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 the Ship forthwith upon being so requested by the Security Trustee.
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13.7	Copies of certificates of entry; letters of undertaking
---	---

The Borrower shall use its best endeavours to ensure that any protection and indemnity and/or war risks associations in which the Ship is entered provides the Security Trustee with:

(a)	a certified copy of the certificate of entry for the Ship;
(b)	a letter or letters of undertaking in such form as may be required by the Security Trustee; and
---	---
(c)	a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority or, as the case may be, protection and indemnity associations in relation to the Ship (if applicable).
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13.8	Deposit of original policies
---	---

The 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

The 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

The 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	Compliance with terms of insurances

The Borrower shall not do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular 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) (Copies of polices; 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)	not make any changes relating to the classification or classification society or manager or operator of the Ship that has been approved by the underwriters of the obligatory insurances; and
---	---
(c)	not employ the 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.
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13.12	Alteration to terms of insurances
---	---

The Borrower shall neither make nor agree to any material alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.

13.13	Settlement of claims

The Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances and shall do all things necessary to ensure such collection or recovery is made.

13.14	Provision of copies of communications

The Borrower shall provide the Security Trustee, at the time of each such communication, copies of all written communications between the 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)	the Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls;
---	---
(ii)	any credit arrangements made between the Borrower 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; or
---	---
(iii)	any claim under any Insurances.
---	---
13.15	Provision of information and further undertakings
---	---

In addition, the 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) reasonably 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 and additional perils insurances) or dealing with or considering any matters relating to any such insurances,
---	---

and the 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 has become or may become a Total Loss and agree to any settlement of such casualty or other accident or damage to the Ship only with the Agent's prior written consent,
---	---

and the 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).
13.16	Mortgagee's interest and additional perils insurances
---	---
(a)	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:
---	---
(i)	a mortgagee's interest insurance in respect of the Ship:
---	---
(A)	providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to the Ship or a liability of the Ship or of the Borrower, such loss or damage being 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:
---	---
(1)	any act or omission on the part of the Borrower, of any operator, charterer, manager or sub-manager of the Ship or of any officer, employee or agent of the Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;
---	---
(2)	any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of the Borrower, any other person referred to in paragraph (1) above, or of any officer, employee or agent of the Borrower or of such a person, including the casting away or damaging of the Ship and/or the Ship being unseaworthy; and/or
---	---
(3)	any other matter capable of being insured against under a mortgagee's interest marine insurance policy, whether or not similar to the foregoing; and
---	---
(B)	in an amount of up to 120 per cent. of the Aggregate Insurable Amount in respect of the Ship; and
---	---
(ii)	a mortgagee's interest additional perils insurance in respect of the Ship providing for the indemnification of the Creditor Parties against, amongst other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of the Ship, the imposition of any Security Interest over the 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 Aggregate Insurable Amount in respect of the Ship,
---	---

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.
(b)	For the purposes of paragraph (a) above "Aggregate Insurable Amount" means the aggregate of:
---	---
(i)	the Loan; and
---	---
(ii)	the aggregate principal amount secured by prior ranking mortgages over the Ship which have an equal or prior ranking to the Security Interests created by the Finance Documents.
---	---
(c)	The Agent shall (without notification to, or the consent of, the Borrower) provide the insurers with whom a mortgagee’s interest insurance and an additional perils insurance is placed with all documents and information which any such insurers may, at any time, request.
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13.17	Review of insurance requirements
---	---

The Security Trustee shall be entitled to review the requirements of this Clause 13 (Insurance) from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Agent (acting on the instructions of the Majority Lenders), significant and capable of affecting the Borrower, the Ship and its Insurances (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrower may be subject). For the avoidance of doubt, neither the Borrower nor any of the Security Parties will be responsible for any costs/expenses incurred by the Agent pursuant to this Clause 13.17 (Review of insurance requirements).

13.18	Modification of insurance requirements

The Security Trustee shall notify the Borrower of any proposed modification under Clause 13.17 (Review of insurance requirements) to the requirements of this Clause 13 (Insurance) which the Security Trustee reasonably considers appropriate in the circumstances and the parties to consider the same in good faith.

14.	SHIP COVENANTS
14.1	General
---	---

The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 (Ship Covenants) at all times during the Security Period except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing (such permission not to be unreasonably withheld with respect to Clause 14.2 (Ship’s name and registration)).

14.2	Ship's name and registration

The Borrower shall keep the Ship 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 the Ship.

14.3	Repair and classification

The Borrower shall, and shall procure that any Approved Manager shall, keep the Ship in a good and safe condition and state of repair and operationally seaworthy:

(a)	consistent with first-class ship ownership and management practice;
(b)	so as to maintain the highest class free of overdue recommendations and conditions affecting class, with a classification society which is a member of IACS (other than the China Classification Society, the Russian Maritime Registry of Shipping, the Polish Register of Shipping and the Indian Register of Shipping) and acceptable to the Agent (provided that the Borrower shall not change the classification society of the Ship except as the Agent, acting with the authorisation of the Majority Lenders, may otherwise permit in writing (such permission not to be unreasonably withheld)); 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 and the ISPS Code,
---	---

and the Agent shall be given power of attorney in the form attached as Schedule 5 to, following the occurrence of an Event of Default which is continuing, act on behalf of the 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

The Borrower 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) in relation to the 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;

(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 the 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 the Borrower or any person that the 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 (other than the imposition of recommendations or conditions that do not affect Class), suspension, discontinuance, withdrawal or expiry of the Ship's class under the rules or terms and conditions of the Borrower's or the Ship's membership of the classification society;
---	---
(d)	following receipt of a written request from the Security Trustee:
---	---
(i)	to confirm that the 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 the 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
---	---

The Borrower shall not make any modification or repairs to, or replacement of, the Ship or equipment installed on it which would or might materially and adversely alter the structure, type or performance characteristics of the Ship or materially reduce its value, other than in order to comply with prevailing laws and regulations.

14.6	Removal of parts

The Borrower shall not remove any material part of the Ship, or any item of equipment installed on the 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 the Ship the property of the Borrower and subject to the security constituted by the Mortgage and any Deed of Covenant Provided that the Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.

14.7	Surveys

The Borrower shall submit the Ship 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

The Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times without material interference to the trading of the Ship to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections at the Borrower's expense (provided that the Borrower shall bear such expenses no more than once every calendar year, unless an Event of Default has occurred and is continuing, in which case all such expenses shall be borne by the Borrower), and if the inspector or surveyor appointed by the Security Trustee under this Clause is of the reasonable opinion that there are any technical, commercial or operational actions being undertaken or omitted to be undertaken by the Borrower or any Approved Manager in order to comply with their obligations under this Agreement and the other Finance Documents, the Borrower shall forthwith (at its expense) on the Security Trustee's demand remedy such action or inaction and provide the Security Trustee with evidence that it has taken such remedial action.

14.9	Prevention of and release from arrest

The 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, the Earnings or the Insurances;
(b)	all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and
---	---
(c)	all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances,
---	---
and, forthwith upon receiving notice of the arrest of the Ship, or of its detention in exercise or purported exercise of any lien or claim, the Borrower shall procure its release by providing bail or otherwise as the circumstances may require as soon as possible and no later than 5 Business Days following such occurrence.
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14.10	Compliance with laws etc.
---	---

The 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, its ownership, operation and management or to the business of the Borrower;
(b)	not employ the 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 the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the Borrower has notified the Agent and has (at its expense) first effected any special, additional or modified insurance cover or confirmation required by the Ship’s insurers.
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14.11	Provision of information
---	---

The Borrower shall promptly provide the Security Trustee with any information which it reasonably requests regarding:

(a)	the Ship, its employment, position and engagements;
(b)	the Earnings and payments and amounts due to the master and crew of the Ship;
---	---
(c)	any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;
---	---
(d)	any towages and salvages; and
---	---
(e)	its compliance, the Approved Manager's compliance and the compliance of the Ship 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, of any current charter guarantee and copies of the Borrower's or the Approved Manager's Document of Compliance, Safety Management Certificate and the ISSC.
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14.12	Notification of certain events
---	---

The Borrower shall:

(a)	before entering into:
(i)	any demise charter for any period in respect of the Ship; or
---	---
(ii)	any other Assignable Charter,
---	---
notify the Agent and provide copies of any such draft charter relating to the Ship and, if applicable, any draft charter guarantee and the Borrower shall be entitled to enter into such charter Provided that:
---

(A)	the Borrower executes in favour of the Security Trustee a specific assignment of all its rights, title and interest in and to such charter and any charter guarantee in the form of a Charterparty Assignment;
(B)	the Borrower uses its reasonable endeavours to procure that any charterer and any charter guarantor agree to acknowledge to the Security Trustee (1) the specific assignment of such charter and charter guarantee by executing an acknowledgement substantially in the form included in the Charterparty Assignment and (2) that the Mortgage over the Ship has been registered prior to the entry into such charter or the charterer provides to the Security Trustee a letter of undertaking pursuant to which the charterer subordinates all its claims against the Borrower and the Ship to the claims of the Creditor Parties under or in connection with the Finance Documents in the Agreed Form;
---	---
(C)	in the case where such charter is a demise charter the charterer undertakes to the Security Trustee (1) to comply with all of the Borrower's undertakings with regard to the employment, insurances, operation, repairs and maintenance of the Ship contained in this Agreement, the Mortgage and any Deed of Covenant and the General Assignment in relation to the Ship and (2) to provide an assignment of its interest in the insurances of the Ship in the Agreed Form;
---	---
(D)	the Borrower provides certified true and complete copies of such charter relating to the Ship and of any current charter guarantee, if any, immediately after its execution;
---	---
(E)	the Agent's receipt of a copy of such charter and its failure or neglect to act, delay or acquiescence in connection with the Borrower's entering into such charter shall not in any way constitute an acceptance by the Agent of whether or not the Earnings under the charter are sufficient to meet the debt service requirements under this Agreement nor shall it in any way affect the Agent's or the Security Trustee's entitlement to exercise its rights under the Finance Documents pursuant to Clause 19 (Events of Default) upon the occurrence of an Event of Default which is continuing arising as a result of an act or omission of the charterer; and
---	---
(F)	the Borrower delivers to the Agent such other documents equivalent to those referred to at paragraphs 2, 3, 4, 5, 8, 9, 10 and 10 of Schedule 3, Part A as the Agent may require; and
---	---
(b)	immediately notify the Security Trustee, of:
---	---
(i)	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 the Borrower to any Earnings;
---	---
(ii)	its entry into any time or consecutive voyage charter in respect of the Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, twelve months;
---	---
(iii)	any casualty which is or is likely to be or to become a Major Casualty;
---	---

(iv)	any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(v)	any requirement, condition or recommendation made by any insurer or classification society or by any competent authority which is not complied with in accordance with its terms;
---	---
(vi)	any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of the Ship for hire which is not lifted in three (3) calendar days;
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(vii)	any intended dry docking of the Ship;
---	---
(viii)	any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident;
---	---
(ix)	any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the Approved Manager or otherwise in connection with the Ship;
---	---
(x)	its intention to de-activate or lay up the Ship; or
---	---
(xi)	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,
---	---

and the Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of the 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.

The Borrower shall not:

(a)	enter into any charter in relation to the Ship under which more than two months' hire (or the equivalent) is payable in advance;
(b)	charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed;
---	---
(c)	appoint a manager of the Ship other than an Approved Manager or agree to any alteration to the terms of that Approved Manager's appointment; or
---	---
(d)	put the 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 the Ship or its Earnings for the cost of such work or for any other reason.
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14.14	Notice of Mortgage

The Borrower shall keep the Mortgage relative the Ship registered against the Ship as a valid first preferred or, as the case may be, priority mortgage, carry on board the 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 the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Security Trustee.

14.15	Sharing of Earnings

The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings (other than (i) any profit sharing agreement with a charterer and (ii) any pool agreement, in either case, on bona fide arm's length terms).

14.16	ISPS Code

The Borrower shall comply with the ISPS Code and in particular, without limitation, shall:

(a)	procure that the Ship and the company responsible for the Ship's compliance with the ISPS Code comply with the ISPS Code; and
(b)	maintain for the Ship an ISSC; and
---	---
(c)	notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
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14.17	Green Passport and green scrapping
---	---

The Borrower shall:

(a)	maintain a safe, sustainable and socially responsible policy with respect to the dismantling of the Ship and the Ship being taken out of service and ensure that the Ship shall not be dismantled, scrapped or recycled unless an Inventory of Hazardous Materials has been established for the Ship;
(b)	procure that the Ship carries, at all times during the Security Period, a statement of compliance in respect of the Inventory of Hazardous Materials prepared for the Ship in accordance with the requirement of:
---	---
(i)	the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009 in relation to non-EU flagged vessels; and
---	---
(ii)	Article 12 of the Regulation (EU) No. 1257/2013 adopted by the EU Parliament and the Council of the European Union on 20 November 2013 in relation to non-EU flagged vessels;
---	---

(c)	ensure that, if during the Security Period, the Ship is taken out of service for dismantling, scrapping or recycling, or sold to an intermediary with the intention of being dismantled, scrapped or recycled, the Ship is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of:
(i)	the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009 in relation to non-EU flagged vessels;
---	---
(ii)	Regulation (EU) No. 127/2013 adopted by the EU Parliament and the Council of the European Union on 20 November 2013 in relation to EU flagged vessels; and
---	---
(d)	comply with Annex VI or any replacement of Annex VI and shall in particular, without limitation:
---	---
(i)	procure that the Ship’s master and crew are familiar with, and that the Ship complied with, Annex VI;
---	---
(ii)	maintain for the Ship throughout the Security Period a valid and current IAPPC and provide a copy to the Agent; and
---	---
(iii)	provide the SEEMP Part II (Data Collection Plan) by no later than 30 June in each year following the year to which the data collection applies, which shall include, inter alia, a ship-specific method to collect, aggregate and report ship data with regard to annual fuel oil consumption, distance travelled, hours underway and other data required to be reported by regulation 22A of MARPOL Annex VI.
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15.	SECURITY COVER
---	---
15.1	Minimum required security cover
---	---

Clause 15.2 (Prepayment; provision of additional security) applies if the Agent notifies the Borrower that the Security Cover Ratio is below 125 per cent.

15.2	Prepayment; provision of additional security

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 30 calendar days 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 three calendar days before the Prepayment Date the Borrower 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 is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

15.3	Valuation of Ship
(a)	The Market Value of the Ship or any other vessel at any date is that shown by a valuation issued by an Approved Broker selected and appointed by the Agent, Provided that:
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(i)	if the Borrower does not agree with the amount of such valuation, it may request, within 14 days after the date on which the Agent notifies the Borrower of such valuation (the “Request Period”), a second valuation of the Ship or other vessel to be commissioned from any Approved Broker selected by the Borrower and appointed by the Agent and the Market Value of the Ship or other vessel in such circumstances shall be the arithmetic mean of both valuations; and
---	---
(ii)	if the Borrower fails to request a second valuation of the Ship or other vessel within the Request Period, the Market Value of the Ship or other vessel shall be that shown in the sole valuation taken by the Agent.
---	---
(b)	Each valuation referred to in paragraph (a) above shall be addressed to the Agent and prepared:
---	---
(i)	as at a date not more than 30 days previously;
---	---
(ii)	with or without physical inspection of the Ship (as the Agent may reasonably require); and
---	---
(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.
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15.4	Value of additional vessel security
---	---

The net realisable value of any additional security which is provided under Clause 15.2 (Prepayment; provision of additional security) 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) and additional security in the form of cash in Dollars will be valued on a Dollar for Dollar basis.

15.5	Valuations binding

Any valuation under Clause 15.2 (Prepayment; provision of additional security), 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) shall (absent manifest error) 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 Clause 15.3 (Valuation of Ship) or 15.4 (Value of additional vessel security) with any information which the Agent or that Approved Broker or expert may request for the purposes of the 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 that 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 (Other breakage costs), 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 expense (provided that the Borrower shall bear such fees and expenses no more than once every calendar year, unless an Event of Default has occurred and is continuing, in which case all such fees and expenses shall be borne by the Borrower) and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause 15 (Security Cover).

15.8	Frequency of valuations

The Borrower acknowledges and agrees that the Agent may commission valuation(s) of the Ship at such times as the Agent (acting on the instructions of the Lenders) shall deem necessary and, in any event, not less than once during each 6-month period of the Security Period.

15.9	Release of Security

If, at any time, the Security Cover Ratio exceeds 125% of the Loan for at least 45 consecutive days and the Borrower has previously provided additional security to the Lender pursuant to Clause 15.2 (Prepayment; provision of additional security), the Agent shall, as soon as reasonably practicable following receipt of the Borrower' request, release any such additional security specified by the Borrower provided that (i) the Agent is satisfied that, immediately following such release, the Security Cover Ratio will be at least 125% of the Loan and (ii) the Borrower shall indemnify the Agent against any costs and expenses arising from such a release.

16.	PAYMENTS AND CALCULATIONS
16.1	Currency and method of payments
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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);
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(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 J.P. Morgan Chase Bank (SWIFT Code CHASUS33) (Account No. 001 1331 808 in favour of Hamburg Commercial Bank AG, SWIFT Code HSHNDEHH; Reference "Kamsarmax Two Shipping Ltd – $14,000,000 facility") 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.
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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,
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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
(a)	Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated:
---	---
(i)	on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice; and
---	---
(ii)	subject to paragraph (b) below, without rounding.
---	---
(b)	The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by the Borrower or any Security Party under a Finance Document shall be rounded to two decimal places.
---	---
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):

(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 five 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.
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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 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.

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, absent manifest error 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 (including, but without limitation, all amounts payable by the Borrower under Clauses 20 (Fees and Expenses), 21 (Indemnities) and 22 (No Set-off or Tax Deduction) of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document) other than those amounts referred to at paragraphs (ii) and (iii);
---	---
(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
---	---
(iii)	thirdly, in or towards satisfaction of the Loan;
---	---
(b)	SECONDLY: following the occurrence of an Event of Default which is continuing, 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 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) (Normal order of application); and
---	---

(c)	THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
17.2	Application by any covered bond Lender
---	---

If and to the extent that any Lender includes the Loan and/or a Mortgage in its covered bond register, any enforcement proceeds recovered under the Finance Documents and attributable to it under the relevant Finance Document shall, notwithstanding the provisions of Clause 17.1(a) (Normal order of application), be applied by it first to the part of the Loan that corresponds to that Lender's Contribution registered in its covered bond register and thereafter in the following order:

(a)	firstly, in or towards satisfaction of the amounts set out under Clause 17.1(a)(i) (Normal order of application);
(b)	secondly, in or towards satisfaction of the amounts set out under Clause 17.1(a)(ii) (Normal order of application); and
---	---
(c)	thirdly, in or towards satisfaction of any part of the Loan that corresponds to any unregistered part of that Lender's contribution.
---	---
17.3	Variation of order of application
---	---

Following the occurrence of an Event of Default which is continuing, 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) (but not, for the avoidance of doubt, that set out in Clause 17.2 (Application by any covered bond Lender)) either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.4	Notice of variation of order of application

The Agent may give notices under Clause 17.3 (Variation of order of application) from time to time following the occurrence of an Event of Default which is continuing; 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.

17.5	Appropriation rights overridden

This Clause 17 (Application of Receipts) and any notice which the Agent gives under Clause 17.3 (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 that, throughout the Security Period (and subject only to the provisions of the General Assignment):

(a)	it shall maintain the Accounts with the Agent;
(b)	it shall ensure that all Earnings of the Ship are paid to the Earnings Account for the Ship;
---	---
(c)	all Minimum Liquidity and Additional Minimum Liquidity required pursuant to Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity) shall be maintained in the Minimum Liquidity Account; and
---	---
(d)	the Dry Docking Reserve Amount required pursuant to Clause 11.20 (Dry Docking Reserve Amount) shall be built-up and maintained in the Dry Docking Reserve Account.
---	---
18.2	Monthly retentions
---	---

The Borrower undertakes with each Creditor Party to ensure that, on and from the date falling one month after the Drawdown Date and at monthly intervals thereafter during the Security Period, there are transferred to the Retention Account out of the Earnings received in the Earnings Account during the preceding month one-third of the amount of the relevant Instalment falling due under Clause 8.1 (Amount of Instalments) on the next Repayment Date and the Borrower irrevocably authorises the Agent to make those transfers (in its sole discretion and without any obligation) if the Borrower fails to do so.

18.3	Shortfall in Earnings

If the aggregate Earnings received in the Earnings Account are insufficient at any time for the required amount to be transferred to the Retention Account under Clause 18.2 (Monthly retentions), the Borrower shall immediately pay the amount of the insufficiency into the Retention Account.

18.4	Application of retentions

Until an Event of Default or a Potential Event of Default occurs and is continuing, the Agent shall, to the extent there are sufficient funds standing to the credit of the Retention Account, on each Repayment Date under this Agreement distribute to the Lenders in accordance with Clause 16.4 (Distribution of payments to Creditor Parties) so much of the then balance on the Retention Account as equals the Instalment due on that Repayment Date pursuant to Clause 8.1 (Amount of Instalments) in discharge of the Borrower’s liability for that Instalment.

18.5	Time Deposits and interest accrued on the Accounts

Any credit balance on each Account 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 that Account. Any credit balance on each Account may be fixed on a time deposit basis on terms to be mutually agreed between the Borrower and the Agent (acting on the instructions of the Lenders).

18.6	Release of accrued interest

Interest accruing under Clause 18.5 (Interest accrued on the Accounts) shall be credited to the relevant Account and may be released to the Borrower pursuant to Clause 18.10 (Restriction on withdrawal).

18.7	Location of Accounts

The 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.
---	---
18.8	Debits for fees, expenses etc.
---	---

Following the occurrence of an Event of Default which is continuing, the Agent shall be entitled (but not obliged) to debit the Earnings Account without prior notice in order to discharge any amount due and payable under Clauses 20 (Fees and Expenses) or 21 (Indemnities) to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clauses 20 (Fees and Expenses) or 21 (Indemnities).

18.9	Borrower’s obligations unaffected

The provisions of this Clause 18 (Application of Earnings) as distinct from a distribution effected under Clause 18.4 (Application of retentions)) 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.
---	---

18.10	Restriction on withdrawal

During the Security Period without the prior written consent of the Agent no sum may be withdrawn by the Borrower from the Minimum Liquidity Account, the Dry Docking Reserve Account or the Retention Account (other than (i) any sums permitted to be withdrawn pursuant to Clauses 11.19 (Minimum Liquidity and Additional Minimum Liquidity) and 11.20 (Dry Docking Reserve Amount) and (ii) interest pursuant to Clause 18.6 (Release of accrued interest), provided that no Event of Default or Potential Event of Default has occurred which is continuing).

The Borrower may, in any calendar month, after having transferred and/or after having taken into account all amounts due or which will become due to the Retention Account in such calendar month in accordance with Clause 18.2 (Monthly retentions), withdraw any surplus (a "Surplus") from the Earnings Account as it may think fit Provided always no Event of Default or Potential Event of Default has occurred which is continuing in which case any Surplus shall remain on the Earnings Account and the Borrower may only withdraw the Surplus (or any part thereof) with the prior written consent of the Agent (acting upon the instructions of the Majority Lenders) in order to satisfy the documented and properly incurred operating expenses of the Ship.

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 when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document unless:
(i)	its failure to pay is caused by administrative or technical error or a Disruption Event; and
---	---
(ii)	payment is made within three Business Days; or
---	---
(b)	any breach occurs of Clauses 2.3(Purpose of Loan), 9.2(Waiver of conditions precedent), 11.2(Title and negative pledge), 11.3 (No disposal of assets), 11.18 (“Know your customer”checks), 11.19 (Minimum Liquidity and Additional Minimum Liquidity), 11.20 (Dry Docking Reserve Amount), Clause 11.21 (Compliance Certificate), 11.23 (Sanctions), 12.2 (Maintenance of status), 12.3 (Negative undertakings) or 15.2 (Prepayment; provision of additional security); or
---	---
(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 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 Documents) 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 untrue or misleading when it is made or repeated; or
---	---
(f)	any of the following occurs in relation to any Financial Indebtedness of any Relevant Person (which in the case of the Corporate Guarantor exceeds in aggregate the amount of $1,000,000 (or its equivalent in any other currency)):
---	---
(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:
---	---
(i)	a Relevant Person becomes, in the reasonable opinion of the Majority Lenders, 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 or officers 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 or officers 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 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 three 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 or officers 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 reasonable opinion of the Majority Lenders is similar to any of the foregoing; or
(h)	the Borrower, the Corporate Guarantor or any other Security Party ceases or suspends carrying on its business or a part of its business which, in the reasonable 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 or the Lenders 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 the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or any Underlying Document 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 written consent, a Change of Control has occured; 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)	the Borrower or any other Security Party or any other person (other than a Creditor Party) repudiates any of the Finance Documents to which the Borrower or that Security Party or person is a party or evidences an intention to do so; 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 the Borrower, the Corporate Guarantor or any other Security Party; or
---	---

(ii)	any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; or
(iii)	the threat or commencement of legal or administrative action involving the Borrower, the Corporate Guarantor, the Ship, the Approved Manager or any Security Party; or
---	---
(iv)	the withdrawal of any material license or governmental or regulatory approval in respect of the Ship, the Borrower, the Approved Manager or the Borrower's or Approved Manager's business,
---	---

which constitutes a Material Adverse Change and which, in the case of sub paragraph (iv) above, cannot be contested with an effect of suspension of such withdrawal and in fact is not contested in good faith by the Borrower.

19.2	Actions following an Event of Default

On, or at any time after, the occurrence of an Event of Default which is continuing:

(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 which is continuing 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 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) (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 Clause 19.2(a)(ii) (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 Clauses 19.2(a)(i) (Actions following an Event of Default) or 19.2(a)(ii) (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 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 Party rights unimpaired

Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document 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 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 (Events of Default), a "Relevant Person" means the Borrower, a Security Party, and any other member of the Group.

19.10	Interpretation

In Clause 19.1(f) (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 Clause 19.1(g) (Events of Default) "petition" includes an application.

20.	FEES AND EXPENSES
20.1	Structuring and commitment fees
---	---

The Borrower shall pay to the Agent:

(a)	a non-refundable structuring fee in an amount equal to 0.90 per cent. of the amount of the Loan actually borrowed payable on the Drawdown Date for distribution among the Lenders pro rata to their Commitments; and
(b)	a non-refundable commitment fee, at the rate of 1.00 per cent. per annum on the undrawn or uncancelled amount of the Total Commitments, payable quarterly in arrears for distribution among the Lenders pro rata to their Commitments, during the period from (and including) the date of the signing of commitment letter dated 28 April 2023 by all parties thereto to the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period.
---	---
20.2	Costs of negotiation, preparation etc.
---	---

The Borrower shall pay to the Agent on its demand the amount of all legal and other 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 Borrower shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all legal and other expenses reasonably incurred by a Creditor Party in connection with:

(a)	the, negotiation, documentation or enforcement of this Agreement including any subsequent consent, amendment or supplement:
(i)	requested (or, in the case of a proposal, made) by or on behalf of the Borrower and relating to a Finance Document or any other Pertinent Document; or
---	---
(ii)	subject to Clause 20.4(b)(ii) (RFR transition costs), which is required as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement;
---	---
(b)	any consent, waiver or suspension of rights by the Lenders, the Majority Lenders or the Creditor Party concerned by or on behalf of the Borrower under or in connection with a Finance Document or any other Pertinent Document;
---	---
(c)	the valuation of any additional security provided or offered under and pursuant to Clause 15 (Security Cover) or any other matter relating to such additional security; or
---	---
(d)	any step reasonably taken by the Lender concerned 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 and any other Pertinent Document is repaid in full.
---	---

There shall be recoverable under paragraph (d) the full amount of all legal expenses reasonably incurred, 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	RFR transition costs

The Borrower shall on demand reimburse each of the Agent and the Security Trustee for the amount of all costs and expenses (including legal fees) reasonably incurred by each Creditor Party in connection with:

(a)	the negotiation or entry into of any Compounded Rate Benchmark Terms Supplement or Compounding Methodology Supplement; or
(b)	any amendment, waiver or consent relating to:
---	---
(i)	any Compounded Rate Benchmark Terms Supplement or Compounding Methodology Supplement; or
---	---
(ii)	any change arising as a result of an amendment required pursuant to any of Clause 5.7 (Cost of funds) or 27.4 (Changes to reference rates), including without limitation any costs relating to amendments to the Finance Documents and/or any registration requirements.
---	---

20.5	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.

20.6	Certification of amounts

A notice which is signed by two 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 (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due absent manifest error shall be prima facie evidence that the amount, or aggregate amount, is due.

21	INDEMNITIES
21.1	Indemnities regarding borrowing and repayment of the 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)	The Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity after the 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 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)) including but not limited to any costs and expenses of enforcing any Security Interests created by the Finance Documents and any claims, liabilities and losses which may be brought against, or incurred by, a Creditor Party when enforcing any Security Interests created by the Finance Documents; 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 (Events of Default),
---	---

and in respect of any tax (other than tax on its overall net income and a FATCA Deduction) 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 Borrower of a notice it receives from a Notifying Lender under this Clause 21.2 (Break Costs);
(b)	the Borrower shall, within five 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 Borrower, 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 Borrower.
---	---

In this Clause 21.2, "Break Costs" means the amount specified as such in the Benchmark Terms.

21.3	Other breakage costs

Without limiting its generality, Clause 21.1 (Indemnities regarding borrowing and repayment of the Loan) covers any claim, expense, liability or loss, 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 Borrower 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 reasonably 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 which has not been previously waived or remedied; and;
---	---
(c)	acting or relying on any notice, request or instruction by the Borrower or any Security Party which the Creditor Party concerned reasonably believes to be genuine, correct and appropriately authorised; or
---	---
(d)	subject to the occurrence of an Event of Default, any insurance arranged by any Creditor Party in relation to the Ship and/or that Creditor Party’s own risk by way of taking out any obligatory insurances or port risk, crew liability or any other type of insurance (as may it in its sole discretion determine) on its own account and/or in its own name,
---	---

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.

21.5	Environmental Indemnity

Without prejudice to the generality of Clause 21.4 (Miscellaneous indemnities), this Clause 21.5 (Environmental Indemnity) covers any claims, demands, proceedings, liabilities, taxes, losses, liabilities 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 or any Environmental Law.

21.6	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, 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 the 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 Borrower shall as an independent obligation, within three 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 (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 to purchase the Contractual Currency with the Payment Currency.

The 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 Borrower 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 (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.

21.7	Certification of amounts

A notice which is signed by two 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 absent manifest error shall be prima facie evidence that the amount, or aggregate amount, is due.

21.8	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, counter-claim, 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, at any time, the Borrower is required by law, regulation or regulatory requirement to make a tax deduction from any payment due under a Finance Document:

(a)	the 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)	the 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 Borrower 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 Borrower 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 (Grossing-up for taxes). Within 30 days after making any tax deduction, the Borrower or, as the case may be, the 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 (No Set-off or Tax Deduction) "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:

(a)	tax on a Creditor Party's overall net income; and
(b)	a FATCA Deduction.
---	---
22.5	Claw back of Tax benefit
---	---

If, following any such deduction or withholding as is referred to in Clause 22.2 (Grossing-up for taxes) from any payment by the Borrower, a Creditor Party shall receive or be granted a credit against or remission for any Taxes payable by it, the relevant Creditor Party shall, and to the extent that it can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of such Creditor Party to obtain any other relief or allowance which may be available to it, reimburse the Borrower with such amount as the relevant Creditor Party shall in its absolute discretion certify to be the proportion of such credit or remission as will leave the pertinent Creditor Party (after such reimbursement) in no worse position than it would have been in had there been no such deduction or withholding from the payment by the Borrower as aforesaid. Such reimbursement shall be made forthwith upon the relevant Creditor Party certifying that the amount of such credit or remission has been received by it. Nothing contained in this Agreement shall oblige any Creditor Party to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Borrower shall not, by virtue of this clause, be entitled to enquire about the Creditor Party’s tax affairs.

22.6	FATCA Information
(a)	Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
---	---
(i)	confirm to that other Party whether it is:
---	---
(A)	a FATCA Exempt Party; or
---	---
(B)	not a FATCA Exempt Party; and
---	---
(ii)	supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
---	---
(iii)	supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
---	---
(b)	If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) 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 reasonably promptly.
---	---
(c)	Paragraph (a) above shall not oblige any Creditor Party to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
---	---

(i)	any law or regulation;
(ii)	any fiduciary duty; or
---	---
(iii)	any duty of confidentiality,
---	---

paragraph (a) above shall not oblige any Creditor Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion cause it 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 the Borrower for purposes of this paragraph (c);

(d)	If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
(e)	If a Lender knows or has reason to know that the Borrower is a US Tax Obligor, or where the Agent reasonably believes that its obligations under FATCA require it, each Lender shall, within ten Business Days of:
---	---
(ii)	where the Lender knows or has reason to know that the Borrower is a US Tax Obligor and the relevant Lender is a Party as at the date of this Agreement, the date of this Agreement;
---	---
(iii)	where the Lender knows or has reason to know that the Borrower is a US Tax Obligor and the relevant Lender became a Party after the date of this Agreement, the date on which the relevant Transfer Certificate became effective; or
---	---
(iv)	the date of a request from the Agent,
---	---

supply to the Agent:

(i)	a withholding certificate on US Internal Revenue Service Form W-8 or Form W-9 (or any successor form) (as applicable); or
(ii)	any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Lender under FATCA.
---	---

The Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender pursuant to this paragraph (e) to the Borrower, to the extent required for compliance with FATCA or any other law or regulation, and shall be entitled to rely on any such withholding certificate, withholding statement, documentation, authorisations and waivers provided without further verification. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (e).

(f)	Each Lender agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the Borrower, to the extent required for compliance with FATCA or any other law or regulation. The Agent shall not be liable for any action taken by it under or in connection with this paragraph (f).
22.7	FATCA Deduction
---	---
(a)	Each Party may make any FATCA Deduction as it reasonably determines 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.
---	---
(b)	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 Borrower and the Agent and the Agent shall notify 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:

(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 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 be immediately cancelled; 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 on the earlier of (a) the date specified by the relevant law or regulation in accordance with Clause 23.1 and (b) on the last day of the then current Interest Period in accordance with Clauses 8.10 (Amounts payable on prepayment) and 8.11(a) (Application of partial prepayment or cancellation).

Provided that if circumstances arise which would result in a notification under clauses 23.1 and 23.2 then, prior to giving such notice, the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Security Documents to another office of the Notifying Lender 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.
---	---
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)	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 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),

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,
---	---

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 (Indemnities regarding borrowing and repayment of the Loan) or by Clause 22 (No Set-off or Tax Deduction) or a FATCA Deduction required to be made by a Party.

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, within five (5) Business Days of 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 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 (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.
---	---
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
---	---

Following the occurrence of an Event of Default which is continuing, each Creditor Party may without prior notice to the Borrower but with prior notice to the Agent:

(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
---	---
(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 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 (Effective Date of Transfer Certificate), a Lender (the "Transferor Lender") may at any time, 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, provided such other entity 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 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.

The prior consent of the Borrower (such consent not to be unreasonably withheld, delayed or conditioned) is required for a syndication or, (in the case of its rights) assignment, pledge or transfer, or (in the case of its obligations) pledge or assumption pursuant to this Clause 26.2 (Transfer by a Lender), unless:

(i)	the Transferee Lender is another Lender or an affiliate or a company or financial institution which is in the same ownership or control as one of the Lenders; or
(ii)	the Transferee Lender is a member of the European System of Central Banks, the KFW Development Bank, the European Investment Bank and other development banks included within the meaning of Section 5 para. 1 no.2 of the German Corporate Income Tax Act; or
---	---
(iii)	an Event of Default has occurred at the relevant time.
---	---

With respect to the Transferor Lender's notice requesting the Borrower’s consent under this Clause 26.2 (Transfer by a Lender), such consent shall be deemed granted if the Borrower has failed to object to such request by written reply given to the Transferor Lender by the Borrower or by any other person on behalf of the Borrower within 5 Business Days from the Borrower’s receipt of the Transferor Lender's notice. For the avoidance of doubt, the Borrower will not bear any costs and expenses of a Transferor Lender or a Transferee Lender in connection with any syndication assignment or transfer, as provided in this Clause 26.

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 and each of the other Lenders;
(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; 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 (Transfer Certificate, delivery and notification) on or before that date.

26.5	No transfer without Transfer Certificate

Except as provided in Clause 26.16 (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

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 successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender only upon receipt by the Agent of a notice to this effect and evidence that all rights and obligations have automatically and by operation of law vested in the successor by virtue of the merger, de-merger or other reorganisation, without the need for the execution and delivery of a Transfer Certificate; the Agent shall in that event inform the Borrower and the Security Trustee accordingly.

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 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 5.6 (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 three 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 Borrower, the Security Trustee and each Lender irrevocably authorises the Agent to sign Transfer Certificates on its behalf. The Borrower and each Security Party irrevocably agree to the transfer procedures set out in this Clause 26 (Transfers and Changes in Lending Offices) and to the extent the cooperation of the Borrower and/or any Security Party shall be required to effect any such transfer, the Borrower 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 Borrower or such Security Party.

26.11	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 without the Borrower’s prior consent and without serving a notice thereon; the Lenders may assign without the Borrower’s prior consent and without serving a notice thereon all or any part of the rights referred to in the preceding sentence to an insurer or surety who has become subrogated to them.

26.12	Sub-division, split, modification or re-tranching

Any Lender may, in its sole discretion, sub-divide, split, sever, modify or re-tranche its Contribution into one or more parts subject to the overall cost of its Contribution to the Borrower remaining unchanged, if such changes are necessary in order to achieve a successful execution of a securitisation, syndication or any other capital market exit in respect of its Contribution (or any applicable part thereof).

26.13

Disclosure of information

(a)

A Lender may, without the prior consent of the Borrower, 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 Borrower, 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.

---

(b)	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 Borrower shall, and shall procure that the Corporate Guarantor and any other Security Party shall:
(i)	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 (Transfers and Changes in Lending Offices); and
---	---
(ii)	procure that the directors and officers of the Borrower, the Corporate Guarantor or any other Security Party, are available to participate in any meeting with any Transferee Lender, sub-participant, rating agency, trustee or accountant at such times and places as the Creditor Parties may reasonably request following prior notice (to be served on the Borrower reasonably in advance) to the Borrower, the Corporate Guarantor or that Security Party.
---	---
(c)	The Borrower shall not, and shall ensure that no Security Party will, publish any details regarding the Loan or any of the Finance Documents without the Agent's prior written consent.
---	---
(d)	The permission of disclosure set out in this Clause 26.13 (Disclosure of information) is granted for the purposes of providing relief from banking secrecy and confidentiality requirements. It is not intended as, and is no declaration of, consent in accordance with the DS_GVO (EU Regulation 2016/679, General Data Protection Regulation).
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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.
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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	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)	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 the Borrower or any Security Party other than or in excess of, 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.
---	---
26.17	Securitisation
---	---

The Borrower shall, and the Borrower shall procure that each Security Party will, assist the Agent and/or any Lender in achieving a successful securitisation (or similar transaction) in respect of the Loan and the Finance Documents and such Security Party's reasonable costs for providing such assistance shall be met by the relevant Lender. The Borrower, if requested by the Agent, shall provide documentation evidencing the purchase price of the Ship when acquired by the Borrower.

26.18	No additional costs

If a Transferor Lender assigns or transfers any of its rights or obligations under the Finance Documents and as a result of circumstances existing at the date the assignment or transfer occurs, the Borrower or a Security Party would be obliged to make a payment to the Transferee Lender under Clause 22.2 (Grossing-up for taxes) or under that clause as incorporated by reference or in full in any other Finance Document, then the Transferee Lender is only entitled to receive payment under that clause to the same extent as the Transferor Lender would have been if the assignment or transfer had not occurred.

100

27	VARIATIONS AND WAIVERS
27.1	Required consents
---	---
(a)	Subject to Clause 27.2 (Exceptions) and Clause 27.4 (Changes to reference rates), any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all Creditor Parties and the Borrower.
---	---
(b)	Any instructions given by the Majority Lenders will be binding on all the Creditor Parties.
---	---
(c)	The Agent may effect:
---	---
(i)	on behalf of the Borrower and any Creditor Party, any amendment or waiver permitted by Clause 27.4 (Changes to reference rates); and
---	---
(ii)	on behalf of any Creditor Party, any amendment or waiver permitted by any other provision of this Clause 27 (Variations and Waivers).
---	---
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" or "RFR Replacement Event" 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;
---	---
(vi)	Clause 3 (Position of the Lenders), Clause 11.5 (Information provided to be accurate), Clause 11.6 (Provision of financial statements), Clause 11.7 (Form of financial statements), Clause 11.16 (Provision of Further Information), Clause 26 (Transfers and Changes in Lending Offices), this Clause 27.2 (Exceptions) or Clause 27.4 (Changes to reference rates);
---	---
(vii)	the definitions of “Restricted Party”, “Sanctions Authorities” or “Sanctions List” in Clause 1.1 (Definitions) or Clause 11.23 (Sanctions);
---	---
(viii)	any release of any Security Interest, guarantee, indemnities or subordination arrangement created by any Finance Document;
---	---

101

(ix)	any change of the currency in which the Loan is provided or any amount is payable under any of the Finance Documents;
(x)	any change to the RFR pursuant to Clause 27.4 (Changes to reference rates);
---	---
(xi)	an extension of the Availability Period; or
---	---
(xii)	a change in Clauses 16.4 (Distribution of payment to Creditor Parties) or 22.2 (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 Mandated Lead Arranger or the Security Trustee may not be effected without the consent of the Agent, the Mandated Lead 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 any of Clauses 27.1 (Required consents), 27.2 (Exceptions) and 27.4 (Changes to reference rates), no document, 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 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	Changes to reference rates
(a)	If a RFR Replacement Event has occurred in relation to the RFR, the Agent (acting on the instructions of all Lenders) shall be entitled to:
---	---
(i)	replace the RFR with a Replacement Reference Rate;
---	---

102

(ii)	adjust the pricing on the Replacement Reference Rate by the amendment of the Margin or otherwise, in each case at its discretion, to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation); and
(iii)	amend this Agreement for the purpose of any of:
---	---
(A)	providing for the use of a Replacement Reference Rate in place of the RFR;
---	---
(B)	aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
---	---
(C)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
---	---
(D)	implementing market conventions applicable to that Replacement Reference Rate;
---	---
(E)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
---	---
(F)	adjusting the pricing in accordance with paragraph (ii) above.
---	---
(b)	The Agent shall promptly notify the Borrower and each Creditor Party of any replacement of the RFR, any adjustment of pricing and any amendment of this Agreement made pursuant to paragraph (a) above, which shall take effect immediately as from (and including) the date specified in such notification.
---	---
(c)	If required by the Agent (acting on the instructions of all Lenders), the Borrower shall (and shall procure that each other Security Party shall) enter into such supplemental, replacement or other agreement in relation to any Finance Document as the Agent may specify to extend the effect of any of the amendments referred to in paragraph (a) above to such Finance Document.
---	---

103

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 or fax shall be sent:

(a)	to the Borrower: c/o Eurodry Ltd.

4 Messogiou & Evropis Street

151 24 Maroussi

Greece

Tel: +30 211 1804097

Attention of: Mr. Anastasios Aslidis /

Mr. Simos Pariaros

Email: aha@eurodry.gr / smp@eurodry.gr

(b)	to a Lender:

At the address next to its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.

(c)	to the Agent and Security Trustee:

for general matters: Hamburg Commercial Bank AG

UB Asset Based Finance/Shipping

Shipping Clients International

Gerhart-Hauptmann-Platz 50

20095 Hamburg

Germany

Fax No: +30 210 429 5323

Attention of: Mr. Loukas Lagaras/Ms. Irene Pavlidis

104

for credit administrative matters: Hamburg Commercial Bank AG

BU Business Operations

Loan & Collateral Operations

Gerhart – Hauptmann- Platz 50

20095 Hamburg

Germany

Fax No: +49 40 3333 34167

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, two 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 one 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:

105

(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
---	---
(a)	Any communication from the Agent or the other Creditor Parties made by electronic means will be sent unsecured and without electronic signature, however, the Borrower may request the Agent and the other Creditor Parties at any time in writing to change the method of electronic communication from unsecured to secured electronic mail communication.
---	---
(b)	The Borrower hereby acknowledges and accepts the risks associated with the use of unsecured electronic mail communication including, without limitation, risk of delay, loss of data, confidentiality breach, forgery, falsification and malicious software. The Agent and the other Creditor Parties shall not be liable in any way for any loss or damage or any other disadvantage suffered by the Borrower resulting from such unsecured electronic mail communication.
---	---
(c)	If the Borrower or any other Security Party wishes to cease all electronic communication, they shall give written notice to the Agent and the other Creditor Parties accordingly after receipt of which notice the Parties shall cease all electronic communication.
---	---
(d)	For as long as electronic communication is an accepted form of communication, the Parties shall:
---	---
(i)	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
---	---
(ii)	notify each other of any change to their respective addresses or any other such information supplied to them.
---	---
(e)	The Borrower undertakes and declares that any documents to fulfil the disclosure of the financial circumstances according to Sec. 18 of the German Banking Act (KWG) that were or are hereinafter submitted to the Hamburg Commercial Bank AG electronically or on data carriers through the Borrower or any other Security Party or any of them or a third party are complete and correct. It further agrees and declares that:
---	---

106

(i)	it is irrelevant whether such documents were submitted with or without signature;
(ii)	documents submitted to Hamburg Commercial Bank AG electronically or on data carriers according to Sec. 18 of the German Banking Act (KWG) have the same legal significance as documents with signature in paper form; and
---	---
(iii)	until written revocation, the declaration under this Clause 28.7 (Electronic communication) shall remain valid.
---	---
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 (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.

29.3	Counterparts

A Finance Document may be executed in any number of counterparts.

107

29.4	Third party rights

A person who is not a Party 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.

29.5	Benefit and binding effect

The terms of this Agreement shall be binding upon, and shall enure to the benefit of, the Parties and their respective (including subsequent) successors and permitted assigns and transferees.

30	BAIL-IN

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a)	any Bail-In Action in relation to any such liability, including (without limitation):
(i)	a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
---	---
(ii)	a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
---	---
(iii)	a cancellation of any such liability; and
---	---
(b)	a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
---	---
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 (Choice of forum for the exclusive benefit of the Creditor Parties), the courts of England shall have exclusive jurisdiction to settle any Dispute.

108

31.3	Choice of forum for the exclusive benefit of the Creditor Parties

Clause 31.2 (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.

31.4	Process agent

The Borrower irrevocably appoints Messrs Shoreside Agents Ltd at present of 11 The Timber Yard, London N1 6ND, 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 (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.

31.6	Meaning of "proceedings" and "Dispute"

In this Clause 31 (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.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

109

SCHEDULE 1

LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment<br> (US Dollars)
Hamburg Commercial Bank AG	Gerhart-Hauptmann-Platz 50 20095, Hamburg<br><br> <br>Germany	14,000,000

110

SCHEDULE 2

FORM OF DRAWDOWN NOTICE

To: Hamburg Commercial Bank AG

Gerhart-Hauptmann-Platz 50

20095 Hamburg

Germany

Attention: Loans Administration

[•] 2023

DRAWDOWN NOTICE

1.	We refer to the loan agreement (the "Loan Agreement") dated [•] 2023 and made between ourselves, as Borrower, the Lenders referred to therein, and yourselves as Agent, Mandated Lead Arranger and Security Trustee in connection with a facility of up to $14,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
2.	We request to borrow the Loan as follows:
---	---
(a)	Amount: $[●]
---	---
(b)	Drawdown Date: [•] 2023;
---	---
(c)	Duration of the first Interest Period shall be [3] months; and
---	---
(d)	Payment instructions: [account in our name and numbered [•] with [•] of [•].]
---	---
3.	We represent and warrant that:
---	---
(a)	the representations and warranties in Clause 10 (Representations and Warranties) of the Loan Agreement would remain true and not misleading if repeated on the date of this Drawdown Notice with reference to the circumstances now existing; and
---	---
(b)	no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
---	---
4.	This Drawdown Notice cannot be revoked without the prior consent of the Majority Lenders.
---	---
5.	[We authorise you to deduct the [•] fee(s) payable pursuant to in Clause(s) 20.1 (Structuring and commitment fees) [•] and [•]].
---	---

______________________________

[Attorney-in-fact]

for and on behalf of

KAMSARMAX TWO SHIPPING LTD

111

SCHEDULE 3

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a) (Documents, fees and no default) required before service of the Drawdown Notice.

1.	A duly executed original of:
(a)	this Agreement;
---	---
(b)	any Fee Letter
---	---
(c)	the Corporate Guarantee;
---	---
(d)	the Agency and Trust Agreement; and
---	---
(e)	the Account Pledges,
---	---

(and of each document required to be delivered under each of them).

2.	Copies of the certificate of incorporation and constitutional documents of the Borrower, the Corporate Guarantor and any other Security Party and any company registration documents in respect of the Borrower, the Corporate Guarantor or, 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 of the Borrower and each Security Party and the shareholders of the Borrower and the Approved Manager authorising the execution of each of the Finance Documents to which that Borrower or that Security Party is a party and, in the case of the Borrower, authorising named officers to give the Drawdown Notice and other notices under this Agreement.
---	---
4.	The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, the Corporate Guarantor or any other Security Party.
---	---
5.	Copies of all consents which the Borrower, the Corporate Guarantor or any other Security Party requires to enter into, or make any payment under, any Finance Document.
---	---
6.	The originals of any mandates or other documents required in connection with the opening or operation of the Accounts.
---	---
7.	One, or as the case may be, more valuations of the Ship, prepared pursuant to paragraphs (a) and (c) of Clause 15.3 (Valuation of Ship), at a date not earlier than 30 days prior to the Drawdown Date, stated to be for the purposes of this Agreement.
---	---
8.	Documentary evidence that the agent for service of process named in Clause 31.4 (Process agent) has accepted its appointment.
---	---

112

9.	Copies of each Underlying Document and of all documents signed or issued by the Borrower or any party thereto under or in connection with such documents together, with such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution of all such documents by the parties thereto.
10.	Any documents required by the Agent in respect of the Borrower, the Corporate Guarantor and any other Security Party (including, if applicable, statements of beneficial ownership of the Borrower) to satisfy the Lenders' "know your customer" requirements.
---	---
11.	Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Liberia, the Marshall Islands and such other relevant jurisdictions as the Agent may require.
---	---
12.	If the Agent so requires, in respect of any of the documents referred to above, an official English translation.
---	---

113

PART B

The following are the documents referred to in Clause 9.1(b) (Documents, fees and no default) required before the Drawdown Date.

1.	A duly executed original of the Mortgage, any Deed of Covenant, 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 Ship.
2.	Documentary evidence that:
---	---
(a)	the Ship is definitively and permanently registered in the name of the Borrower under an Approved Flag in accordance with the laws of the applicable Approved Flag State;
---	---
(b)	the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
---	---
(c)	the Ship maintains the class specified in Clause 14.3(b) (Repair and classification) with a first class classification society which is a member of IACS (other than the China Classification Society, the Russian Maritime Registry of Shipping, the Polish Register of Shipping and the Indian Register of Shipping) as the Agent may approve free of all overdue recommendations and conditions affecting class of such classification society;
---	---
(d)	the Mortgage relating to the Ship has been duly registered or recorded against the 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;
---	---
(e)	the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and
---	---
(f)	if applicable, the Ship has been delivered to the relevant charterer after the registration or recordation of the ** Ship’s Mortgage and that any charterer has acknowledged such prior registration or recordation or has subordinated in writing all its claims against the ** Ship and the Borrower to the rights of the Creditor Parties.
---	---
3.	Documents establishing that the Ship will, as from the Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
---	---
(a)	the Approved Manager's Undertaking relative thereto;
---	---
(b)	copies of the Approved Manager's Document of Compliance and of the Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires); and
---	---
(c)	copies of the statement of compliance on Inventory of Hazardous Material prepared for the Ship.
---	---

114

4.	Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Approved Flag State and such other relevant jurisdictions as the Agent may require.
5.	Evidence satisfactory to the Agent that the Minimum Liquidity and Additional Minimum Liquidity in respect of the **** Ship are each standing to the credit of the Minimum Liquidity Account pursuant to Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity).
---	---
6.	If the Agent so requires, in respect of any of the documents referred to above, an original English translation.
---	---
7.	Evidence satisfactory to the Agent of payment of all fees due and payable in accordance with Clause 20 (Fees and Expenses) of this Agreement.
---	---
8.	The most recent survey report or other comparable document in respect of the physical condition of the **** Ship.
---	---

Each of the documents specified in paragraphs 3 and 4 of Part A shall be notarised or legalised by a competent authority acceptable to the Agent 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 Corporate Guarantor (as the case may be) or (if so requested by the Agent) a lawyer of the Borrower or the Corporate Guarantor.

115

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: Hamburg Commercial Bank AG for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below.

[•]

This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [•] 2023 and made between (1) Kamsarmax Two Shipping Ltd of the Republic of the Marshall Islands (the "Borrower") as Borrower, (2) the banks and financial institutions named therein as Lenders, (3) Hamburg Commercial Bank AG as Agent, (4) Hamburg Commercial Bank AG as Mandated Lead Arranger and (5) Hamburg Commercial Bank AG as Security Trustee for a loan facility of up to $14,000,000.

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 [•] 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 [•] per cent. of its Contribution, which percentage represents $[].]
---	---
5.	[By virtue of this Certificate and Clause 26 (Transfers and Changes in Lending Offices) of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[]] [from [] per cent. of its Commitment, which percentage represents $[]] and, subject to Clause 26.7 (Effect of Transfer Certificate) of the Loan Agreement, from all obligations connected therewith, the Transferee acquires a Commitment of $[•].]
---	---
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 (Transfers and Changes in Lending Offices) of the Loan Agreement provides will become binding on it upon this Certificate taking effect.
---	---

116

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 (Transfers and Changes in Lending Offices) of the Loan Agreement.
8.	The Transferor:
---	---
(a)	warrants to the Transferee and each Relevant Party that:
---	---
(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 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;
---	---
(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 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 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
---	---

117

(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 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

Hamburg Commercial Bank AG

By:

Date:

118

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:

Notes:

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.

Paragraph 4 deals with assignment of rights and can be used together with paragraph 5 if the parties have agreed to a combination of assignment of rights and transfer of obligations.

Paragraph 5 deals with transfer of obligations and should be removed if the parties have agreed to an assignment only.

119

SCHEDULE 5

POWER OF ATTORNEY

Know all men by these presents that Kamsarmax Two Shipping Ltd (the "Corporation"), a corporation incorporated in the Republic of the Marshall Islands and having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands irrevocably and by way of security appoints Hamburg Commercial Bank AG (the "Attorney") of Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany its attorney, to act in the name of the Corporation and to exercise any right, entitlement or power of the Corporation 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 Corporation including, without limitation, such powers or entitlement as the Corporation 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 Corporation 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 Corporation as a Deed on [date].

EXECUTED as a DEED by )

KAMSARMAX TWO SHIPPING LTD )

acting by )

its President ) ****

in the presence of: )

120

SCHEDULE 6

FORM OF COMPLIANCE CERTIFICATE

To: Hamburg Commercial Bank AG

Gerhart-Hauptmann-Platz 50

D-20095 Hamburg

Germany

[•] 20[•]

Dear Sirs

We refer to a loan agreement dated [•] (the "Loan Agreement") dated [•] 2023 and made between (1) Kamsarmax Two Shipping Ltd of the Republic of the Marshall Islands (the "Borrower") as borrower, (2) the banks and financial institutions named therein as Lenders, (3) Hamburg Commercial Bank AG as Agent, (4) Hamburg Commercial Bank AG as Mandated Lead Arranger and (5) Hamburg Commercial Bank AG as Security Trustee for a loan facility of up to $14,000,000.

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 [consolidated unaudited financial statements of the Corporate Guarantor and its subsidiaries (including the Borrower) for the 6-month period ended [30 June][31 December] 20[l]]/[the consolidated audited financial statements of the Corporate Guarantor and its subsidiaries (including the Borrower) for the financial year ended 31 December 20[l]]. The financial statements (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 Corporate Guarantor and its subsidiaries (including the Borrower) at the date of the financial statements and of their profits for the period to which the financial statements relate and (iii) fully disclose or provide for all significant liabilities of the Corporate Guarantor and its subsidiaries (including the Borrower).

We represent that no Event of Default or Potential Event of Default has occurred and is continuing as at the date of this Compliance Certificate [except for the following matter or event [set out all material details of matter or event]]. In addition as of [•] 2023, we confirm compliance with the minimum liquidity requirements set out in Clause 11.19 (Minimum Liquidity and Additional Minimum Liquidity), Clause 11.20 (Dry Docking Reserve Amount) and the minimum security cover requirement set out in Clause 15.1 (Minimum required security cover) [and the financial statements pursuant to Clause 11.6 (Provision of financial statements) of the Loan Agreement]) for the 6-month period to which this Compliance Certificate relates.

We now certify that, as at [30 June] [31 December] 20[●]:

(a)	the aggregate amount of the Minimum Liquidity amount standing to the credit of the Minimum Liquidity Account is $[l];

121

(b)	the amount of the Additional Minimum Liquidity standing to the credit of the Minimum Liquidity Account is $[l];
(c)	the aggregate amount standing to the credit of the Dry Docking Reserve Account is $[●]; and
---	---
(d)	the Security Cover Ratio is [●] per cent.
---	---

This Compliance Certificate shall be governed by, and construed in accordance with, English law.

______________________________

[Officer]

for and on behalf of ****

EURODRY LTD.

122

SCHEDULE 7<br> <br> BENCHMARK TERMS
CURRENCY:	Dollars.
---	---
Cost of funds as a fallback	Cost of funds will apply as a fallback.
Definitions
Additional Business Days:	An RFR Banking Day.
Break Costs:	Any cost or amount which is incurred or suffered by a Lender to the extent that it is attributable to a payment by the Borrower to the Agent of any amount of principal due or which would have become due under this Agreement prior to the date upon which such amount should have been repaid in accordance with the terms and conditions of this Agreement
Central Bank Rate:	(a) The short-term interest rate target set by the US Federal Open Market Committee as published by the Federal Reserve Bank of New York from time to time; or<br><br> <br>(b) if that target is not a single figure, the arithmetic mean of:<br><br> <br>(i) the upper bound of the short-term interest rate target range set by the US Federal Open Market Committee and published by the Federal Reserve Bank of New York; and<br><br> <br>(ii) the lower bound of that target range.
Central Bank Rate Adjustment:	In relation to the Central Bank Rate prevailing at close of business on any RFR Banking Day, the arithmetic mean (calculated by the Agent or by any other Finance Party which agrees to make the calculation in place of the Agent) of the Central Bank Rate Spreads for the five most immediately preceding RFR Banking Days for which the RFR is available.
Central Bank Rate Spread:	In relation to any RFR Banking Day, the difference (expressed as a percentage rate per annum) (calculated by the Agent or by any other Finance Party which agrees to make the calculation in place of the Agent) between: (i) the RFR for that RFR Banking Day and (ii) the Central Bank Rate prevailing at the close of business on that RFR Banking Day.

123

Daily Rate:	The "Daily Rate" for any RFR Banking Day is:
	(a) the RFR for that RFR Banking Day; or
	(b) if the RFR is not available for that RFR Banking Day, the percentage rate per annum which is the aggregate of:
	(i) the Central Bank Rate for that RFR Banking Day; and<br><br> <br>(ii) the applicable Central Bank Rate Adjustment; or
	(c) if paragraph (b) above applies but the Central Bank Rate for that RFR Banking Day is not available, the percentage rate per annum which is the aggregate of:<br><br> <br>(i) the most recent Central Bank Rate for a day which is no more than five RFR Banking Days before that RFR Banking Day; and<br><br> <br>(ii) the applicable Central Bank Rate Adjustment,<br><br> <br>rounded, in either case, to five decimal places and if, in either case, that rate is less than zero, the Daily Rate shall be deemed to be zero.
Lookback Period:	Five RFR Banking Days.
Market Disruption Credit Adjustment Spread:	Length of Interest<br> Period <br> ≤ 1 Month<br> ˃ 1 Month and ≤ 3 Months<br> ˃ 3 Months and ≤ 6 Months<br> ˃ 6 Months and ≤ 12Months	Credit Adjustment <br> Spread for USD<br> 0.11448%<br> 0.26161%<br> 0.42826%<br> 0.71513%
Market Disruption Rate	The percentage rate per annum which is the aggregate of:<br><br> <br>(a) the Cumulative Compounded RFR Rate for the Interest Period of the Loan; and<br><br> <br>(b) the applicable Market Disruption Credit Adjustment Spread.
Relevant Market:	The market for overnight cash borrowing collateralised by US Government securities.

124

Reporting Day:	The Business Day which follows the day which is the Lookback Period prior to the last day of the Interest Period.
RFR:	The secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).
RFR Banking Day:	Any day other than:<br><br> <br>(a) a Saturday or Sunday; and<br><br> <br>(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
Reporting Time
Deadline to report market disruption in accordance with Clause 5.6 (Market disruption)	Close of business in Hamburg on the Reporting Day for the Loan.
Deadline for Lenders to report their cost of funds in accordance with Clause 5.7 (Cost of funds)	Close of business on the date falling 2 Business Days after the Reporting Day for the Loan or the relevant part of the Loan (or, if earlier, on the date falling 2 Business Days before the date on which interest is due to be paid in respect of the Interest Period for the Loan or the relevant part of the Loan).

125

SCHEDULE 8<br> <br> DAILY NON-CUMULATIVE COMPOUNDED RFR RATE

The "Daily Non-Cumulative Compounded RFR Rate" for any RFR Banking Day "i" during an Interest Period for the Loan or any part of the Loan is the percentage rate per annum (without rounding, to the extent reasonably practicable for the Finance Party performing the calculation, taking into account the capabilities of any software used for that purpose) calculated as set out below:

where:

"UCCDR i" **** means the Unannualised Cumulative Compounded Daily Rate for that RFR Banking Day "i";

"UCCDR i-1" **** means, in relation to that RFR Banking Day "i", the Unannualised Cumulative Compounded Daily Rate for the immediately preceding RFR Banking Day (if any) during that Interest Period;

"dcc" **** means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number;

"n i" means the number of calendar days from, and including, that RFR Banking Day "i" up to, but excluding, the following RFR Banking Day; and

the "Unannualised Cumulative Compounded Daily Rate" for any RFR Banking Day (the "Cumulated RFR Banking Day") during that Interest Period is the result of the below calculation (without rounding, to the extent reasonably practicable for the Finance Party performing the calculation, taking into account the capabilities of any software used for that purpose):

where:

"ACCDR" means the Annualised Cumulative Compounded Daily Rate for that Cumulated RFR Banking Day;

"tn i" means the number of calendar days from, and including, the first day of the Cumulation Period to, but excluding, the RFR Banking Day which immediately follows the last day of the Cumulation Period;

"Cumulation Period" means the period from, and including, the first RFR Banking Day of that Interest Period to, and including, that Cumulated RFR Banking Day;

"dcc" **** has the meaning given to that term above; and

126

the "Annualised Cumulative Compounded Daily Rate" for that Cumulated RFR Banking Day is the percentage rate per annum (rounded to five decimal places) calculated as set out below:

where:

"d 0" means the number of RFR Banking Days in the Cumulation Period;

"Cumulation Period" has the meaning given to that term above;

"i" means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order in the Cumulation Period;

"DailyRate i-LP" means, for any RFR Banking Day "i" in the Cumulation Period, the Daily Rate for the RFR Banking Day which is the applicable Lookback Period prior to that RFR Banking Day "i";

"n i" means, for any RFR Banking Day "i" in the Cumulation Period, the number of calendar days from, and including, that RFR Banking Day "i" up to, but excluding, the following RFR Banking Day;

"dcc" has the meaning given to that term above; and

"tn i" has the meaning given to that term above.

127

SCHEDULE 9<br> <br> CUMULATIVE COMPOUNDED RFR RATE

The "Cumulative Compounded RFR Rate" for any Interest Period for the Loan or any part of the Loan is the percentage rate per annum (rounded to the same number of decimal places as is specified in the definition of "Annualised Cumulative Compounded Daily Rate" in Schedule 8 (Daily Non-Cumulative Compounded RFR Rate)) calculated as set out below:

1.

where:

"d 0" means the number of RFR Banking Days during the Interest Period;

"i" means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order during the Interest Period;

"DailyRate i-LP" means for any RFR Banking Day "i" during the Interest Period, the Daily Rate for the RFR Banking Day which is the applicable Lookback Period prior to that RFR Banking Day "i";

"n i" means, for any RFR Banking Day "i", the number of calendar days from, and including, that RFR Banking Day "i" up to, but excluding, the following RFR Banking Day;

"dcc" means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number; and

"d" means the number of calendar days during that Interest Period.

128

EXECUTION PAGES

BORROWER
SIGNED by	)
	)
as attorney-in-fact	) /s/ Stefania Karmiri
for and on behalf of	)
KAMSARMAX TWO SHIPPING LTD	)
in the presence of:	) /s/ Ilias Vassilios Tsigos
LENDERS
SIGNED by	)
	)
as attorney-in-fact	) /s/ Foteini Apalaki
for and on behalf of	)
HAMBURG COMMERCIAL BANK AG	)
in the presence of:	) /s/ Ilias Vassilios Tsigos
AGENT
SIGNED by	)
	)
as attorney-in-fact	) /s/ Foteini Apalaki
for and on behalf of	)
HAMBURG COMMERCIAL BANK AG	)
in the presence of:	) /s/ Ilias Vassilios Tsigos

129

MANDATED LEAD ARRANGER
SIGNED by	)
	)
as attorney-in-fact	) /s/ Foteini Apalaki
for and on behalf of	)
HAMBURG COMMERCIAL BANK AG	)
in the presence of:	) /s/ Ilias Vassilios Tsigos
SECURITY TRUSTEE
SIGNED by	)
	)
as attorney-in-fact	) /s/ Foteini Apalaki
for and on behalf of	)
HAMBURG COMMERCIAL BANK AG	)
in the presence of:	) /s/ Ilias Vassilios Tsigos

130

ex_655025.htm

EXHIBIT 4.18

Dated __20___ June 2023

EURODRY LTD.

as Guarantor

and

HAMBURG COMMERCIAL BANK AG

as Security Trustee

GUARANTEE

relating to

a loan agreement dated _20_ June 2023

in respect of a loan facility of up to $14,000,000

PIRAEUS

Index

Clause		Page
1	INTERPRETATION	1
2	GUARANTEE	3
3	LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR	4
4	EXPENSES	4
5	ADJUSTMENT OF TRANSACTIONS	5
6	PAYMENTS	5
7	INTEREST	5
8	SUBORDINATION	6
9	ENFORCEMENT	6
10	REPRESENTATIONS AND WARRANTIES	7
11	UNDERTAKINGS	10
12	CORPORATE UNDERTAKINGS	14
13	JUDGMENTS AND CURRENCY INDEMNITY	15
14	SET-OFF	15
15	NO SET-OFF OR TAX DEDUCTION	15
16	SUPPLEMENTAL	17
17	ASSIGNMENT	18

18	NOTICES	18
19	INVALIDITY OF LOAN AGREEMENT	19
20	GOVERNING LAW AND JURISDICTION	20
21	BAIL-IN	21
Execution
EXECUTION PAGE		23

THIS GUARANTEE is made on __20___ June 2023

PARTIES

(1)	EURODRY LTD., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands (the "Guarantor"); and
(2)	HAMBURG COMMERCIAL BANK AG, ** acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany (the "Security Trustee**", which expression includes its successors and assigns) as trustee for the Lenders as defined in the Loan Agreement referred to in Recital (A) below.
---	---

BACKGROUND

(A)	By a loan agreement dated __20___ June 2023 (the "Loan Agreement") made by (i) Kamsarmax Two Shipping Ltd as borrower (the "Borrower"), (ii) the banks and financial institutions listed therein as lenders (together, the "Lenders") and (iii) Hamburg Commercial Bank AG as agent (in such capacity, the "Agent"), mandated lead arranger (in such capacity, the "Mandated Lead Arranger") and Security Trustee, it was agreed that the Lenders would make available to the Borrower a senior secured term loan facility of up to $14,000,000 for the purpose and on the terms and conditions set out therein.
(B)	By an Agency and Trust Agreement dated __20___ June 2023, and entered into pursuant to, the Loan Agreement, it was agreed that the Security Trustee would hold the Trust Property on trust for the Lenders.
---	---
(C)	It is a condition precedent to the availability of the Loan (or any part thereof) under the Loan Agreement, that the Guarantor shall execute and deliver to the Security Trustee this Guarantee.
---	---

OPERATIVE PROVISIONS

IT IS AGREED as follows:

1	INTERPRETATION
1.1	Defined expressions
---	---

Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Guarantee unless the context otherwise requires.

1.2	Construction of certain terms

In this Guarantee:

"Bail-In Action" means the exercise of any Write-down and Conversion Powers;

"Bail-In Legislation" means:

(a)	in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;

(b)	in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
(c)	in relation to the United Kingdom, the UK Bail-In Legislation;
---	---

"bankruptcy" includes a liquidation, receivership, administration or judicial management and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country;

"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway;

"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

"Loan Agreement" means the agreement dated _____ June 2023 referred to in Recital (A) above and includes any existing or future amendments or supplements, whether made with the Guarantor's consent or otherwise;

"Resolution Authority" means anybody which has authority to exercise any Write-down and Conversion Powers;

"Ship" means the 2008-built kamsarmax bulk carrier vessel built by Juangsu New YZJ of China registered in the ownership of the Borrower under the Marshall Islands flag with IMO Number 9739563 and with the name "EKATERINI".

"Third Parties Act" has the meaning given to Clause 16.10 (Third Party Rights);

"UK Bail-In Legislation" means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings);

"Write-down and Conversion Powers" means:

(a)	in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
(b)	in relation to any other applicable Bail-In Legislation other than the UK Bail-In Legislation;
---	---
(i)	any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---

(ii)	any similar or analogous powers under that Bail-In Legislation.
(c)	in relation to the UK Bail-in Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers.
---	---
1.3	Application of construction and interpretation provisions of Loan Agreement
---	---

Clauses 1.2 (Construction of certain terms), 1.5 (General interpretation) and 1.6 (Heading) of the Loan Agreement apply, with any necessary modifications, to this Guarantee.

2	GUARANTEE
2.1	Guarantee and Indemnity
---	---

The Guarantor unconditionally and irrevocably:

(a)	guarantees the due payment of all amounts payable by the Borrower under or in connection with the Loan Agreement and every other Finance Document to which it is a party;
(b)	undertakes to pay to the Security Trustee, on the Security Trustee's demand, any such amount which is not paid by the Borrower when payable under or in connection with the Loan Agreement or any other Finance Document to which it is a party, as if it were the Borrower;
---	---
(a)	undertakes to procure that the Borrower shall perform all its obligations under the Loan Agreement and every other Finance Document to which it is a party; and
---	---
(c)	as a separate, continuing and primary obligation, fully indemnifies the Security Trustee and each other Creditor Party on the Security Trustee's demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Security Trustee or the other Creditor Party concerned as a result of or in connection with any failure by the Borrower to comply with any of its obligations under any Finance Document to which it is a party or any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal; and the amount recoverable under this indemnity shall be equal to the amount which the Security Trustee or any other Creditor Party concerned would otherwise have been entitled to recover.
---	---
2.2	No limit on number of demands
---	---

The Security Trustee may serve more than 1 demand under Clause 2.1 (Guarantee and Indemnity).

2.3	Release of Guarantee

At the end of the Security Period, the Security Trustee will, at the request and cost of the Guarantor, release the Guarantor from its obligations under this Guarantee and return this Guarantee to the Guarantor.

3	LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
3.1	Principal and independent debtor
---	---

The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.

3.2	Waiver of rights and defences

Without limiting the generality of Clause 3.1 (Principal and independent debtor), the Guarantor shall neither be discharged by, nor have any claim against, any Creditor Party in respect of:

(a)	any amendment or supplement being made to the Finance Documents (or any of them);
(b)	any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, the Finance Documents (or any of them);
---	---
(c)	any release or loss (even though negligent) of any right or Security Interest created by the Finance Documents (or any of them);
---	---
(d)	any failure (even though negligent) promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or
---	---
(e)	any other Finance Document or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it.
---	---
4	EXPENSES
---	---
4.1	Costs of preservation of rights, enforcement etc.
---	---

The Guarantor shall pay to the Security Trustee on its demand the amount of all expenses incurred by the Security Trustee or any other Creditor Party in connection with any matter arising out of this Guarantee or any Security Interest connected with it, including any advice, claim or proceedings relating to this Guarantee or such a Security Interest.

4.2	Fees and expenses payable under Loan Agreement

Clause 4.1 (Costs of preservation of rights, enforcement etc) is without prejudice to the Guarantor's liabilities in respect of the Borrower’s obligations under clause 20 (Fees and Expenses) of the Loan Agreement and under similar provisions of the other Finance Documents.

5	ADJUSTMENT OF TRANSACTIONS
5.1	Reinstatement of obligation to pay
---	---

The Guarantor shall pay to the Security Trustee on its first demand any amount which any Creditor Party is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Borrower or of another Security Party (or similar person) on the ground that the Loan Agreement or any other Finance Document, or a payment by the Borrower or any Security Party, was invalid or on any similar ground.

6	PAYMENTS
6.1	Method of payments
---	---

Any amount due under this Guarantee shall be paid:

(a)	in immediately available funds; and
(b)	to such account as the Security Trustee may from time to time notify to the Guarantor.
---	---
6.2	Security Trustee memorandum account
---	---
The Security Trustee 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.
---
7	INTEREST
---	---
7.1	Accrual of interest
---	---
Any amount due under this Guarantee shall carry interest after the date on which the Security Trustee demands payment of it until it is actually paid, unless interest on that same amount also accrues under the Loan Agreement.
---
7.2	Calculation of interest
---	---
Interest under this Guarantee shall be calculated and accrue in the same way as interest under clause 5 (Interest) of the Loan Agreement.
---
7.3	Guarantee extends to interest payable under Loan Agreement
---	---
For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Loan Agreement, including that payable under clause 7 (Default Interest) of the Loan Agreement.
---

8	SUBORDINATION
8.1	Subordination of rights of Guarantor
---	---
All rights which the Guarantor at any time has (whether in respect of this Guarantee or any other transaction) against the Borrower, any other Security Party or their respective assets shall be fully subordinated to the rights of the Creditor Parties under the Finance Documents; and in particular, the Guarantor shall not during the Security Period:
---
(a)	claim, or in a bankruptcy of the Borrower or any other Security Party prove for, any amount payable to the Guarantor by the Borrower or any other Security Party, whether in respect of this Guarantee or any other transaction;
---	---
(b)	take or enforce any Security Interest for any such amount;
---	---
(c)	claim to set‑off any such amount against any amount payable by the Guarantor to the Borrower or any other Security Party; or
---	---
(d)	claim any subrogation or other right in respect of any Finance Document or any sum received or recovered by any Creditor Party under a Finance Document.
---	---
9	ENFORCEMENT
---	---
9.1	No requirement to commence proceedings against the Borrower
---	---
Neither the Security Trustee nor any other Creditor Party will need to commence any proceedings under, or enforce any Security Interest created by, the Loan Agreement or any other Finance Document before claiming or commencing proceedings under this Guarantee.
---
9.2	Conclusive evidence of certain matters
---	---
However, as against the Guarantor:
---
(a)	any judgement or order of a court in England, the Marshall Islands, Liberia or any other Pertinent Jurisdiction in connection with the Loan Agreement or any of the other Finance Documents to which it is a party; and
---	---
(b)	any statement or admission in writing of the Borrower in connection with the Loan Agreement or any other Finance Documents to which it is a party,
---	---

(absent manifest error) shall be binding and conclusive as to all matters of fact and law to which it relates.

9.3

Suspense account

Following the occurrence of an Event of Default which is continuing, the Security Trustee and any Creditor Party may, for the purpose of claiming or proving in a bankruptcy of the Borrower or any other Security Party, place any sum received or recovered under or by virtue of this Guarantee or any Security Interest connected with it on a separate suspense or other nominal account without applying it in satisfaction of the Borrower’s obligations under the Loan Agreement and the other Finance Documents.

---

10	REPRESENTATIONS AND WARRANTIES
10.1	General
---	---
The Guarantor represents and warrants to the Security Trustee as follows.
---
10.2	Status
---	---
The Guarantor is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands.
---
10.3	Share capital and ownership
---	---
The Guarantor is authorized to issue 220,000,000 registered shares (of which 200,000,000 shares shall be common shares and 20,000,000 shall be preferred shares) with a par value of $0.01 per share, all of which shares have been issued and are fully paid and in registered form in the legal title.
---
10.4	Corporate power
---	---
The Guarantor has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
---
(a)	to execute each Finance Document to which it is a party; and
---	---
(b)	to make all the payments contemplated by, and to comply with, the Finance Documents to which it is a party.
---	---
10.5	Consents in force
---	---
All the consents referred to in Clause 10.4 (Corporate power) remain in force and nothing has occurred which makes any of them liable to revocation.
---
10.6	Legal validity and effective Security Interests
---	---
The Finance Documents to which the Guarantor 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 Guarantor’s legal, valid and binding obligations enforceable against the Guarantor in accordance with their respective terms, subject to any relevant insolvency laws affecting creditors' rights generally; and
---	---
(b)	create legal, valid and binding Security Interests (having the priority specified in the relevant Finance Document) enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate.
---	---
10.7	No third party Security Interests
---	---

Without limiting the generality of Clause 10.6 (Legal validity and effective Security Interests) and the other documents executed pursuant thereof at the time of the execution and delivery of each Finance Document to which the Guarantor is a party:
(a)	the Guarantor will have the right to create all Security Interests which that Finance Document purports to create; and
---	---
(b)	no third party will have any Security Interest (other than Permitted Liens) or any other similar 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 the Guarantor of the Finance Documents and the Underlying Documents to which it is a party and its compliance with such Finance Documents and Underlying Documents to which it is a party:
---
(a)	will not involve or lead to a contravention of:
---	---
(i)	any law or regulation; or
---	---
(ii)	the constitutional documents of the Guarantor; or
---	---
(iii)	any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets; and
---	---
(b)	will not have a Material Adverse Effect; and
---	---
(c)	is for the corporate benefit of the Guarantor.
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10.9	No withholding taxes
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All payments which the Guarantor is liable to make under any of the Finance Documents to which it is a party must 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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10.10	No default
---	---
No Event of Default or Potential Event of Default has occurred and is continuing.
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10.11	Information
---	---
All information which has been provided in writing by or on behalf of the Guarantor in connection with any of the Finance Documents satisfied the requirements of Clause 11.2 (Information provided to be accurate); all audited and unaudited accounts and financial statements which have been so provided satisfied the requirements of Clause 11.4 (Form of financial statements) and are true, correct and not misleading and present fairly and accurately the financial position of the Guarantor or the Group (as the case may be); and there has been no change in the financial position or state of affairs of the 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.
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10.12	No litigation
No legal or administrative action involving the Guarantor (including action relating to any breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Guarantor's knowledge, is likely to be commenced or taken which would, in either case, be likely to have a Material Adverse Effect.
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10.13	Taxes paid
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The Guarantor has paid all taxes applicable to, or imposed on or in relation to the Guarantor or its business.
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10.14	ISM Code and ISPS Code compliance
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The Guarantor has obtained all necessary ISM Code Documentation and the ISPS Code Documentation in connection with the Ship and is in full compliance with the ISM Code and the ISPS Code.
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10.15	No Money laundering
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(a)	The Guarantor:
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(i)	will not, and will procure that neither the Borrower nor any Security Party, to the extent applicable, will, in connection with this Guarantee 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 Directive 2015/849/EC of the European Parliament and the Council of the European Union of May 2015) and any comparable US Federal and state laws; and
---	---
(ii)	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.
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(b)	The Guarantor:
---	---
(i)	confirms that the Borrower 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 the Loan Agreement. That is to say, the Borrower acts for its own account and not for or on behalf of anyone else; and
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(ii)	will promptly inform the Agent by written notice, if the Borrower is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.
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10.16	No immunity
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The Guarantor is not nor any of its assets is entitled to immunity on grounds of sovereignty or otherwise from any legal action or proceeding (including, without limitation, suit, attachment prior to judgement, execution or other enforcement).

10.17	Choice of law
The choice of the laws of England to govern this Guarantee and those other Finance Documents to which it is a party which are expressed to be governed by the laws of England constitutes a valid choice of law and the submission by the Guarantor thereunder to the exclusive jurisdiction of the Courts of England is a valid submission and does not contravene the laws of Liberia and the laws of England will be applied by the courts of any Pertinent Jurisdiction if this Guarantee or those other Finance Documents or any claim thereunder comes under their jurisdiction upon proof of the relevant provisions of the laws of England.
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10.18	Pari passu ranking
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The obligations of the Guarantor under the Finance Documents to which it is a party are direct, general and unconditional obligations and 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.

10.19	Repetition

The representations and warranties in this Clause 10 shall be deemed to be repeated by the Guarantor:

(a)	on the date of service of the Drawdown Notice;
(b)	on the Drawdown Date; and
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(c)	with the exception of Clauses 10.9 (No withholding taxes), 10.10 (No default), 10.11 (Information) and 10.12 (No litigation), on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to clause 11.21 (Compliance Certificate) of the Loan Agreement, as if made with reference to the facts and circumstances existing on each such day.
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11	UNDERTAKINGS
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11.1	General
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The Guarantor undertakes with the Security Trustee to comply with the following provisions of this Clause 11 (Undertakings) at all times during the Security Period, except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit in writing.

11.2	Information provided to be accurate

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 the Guarantor under or in connection with this Guarantee or any other Finance Document will be true, correct and not misleading and will not omit any material fact or consideration.

11.3	Provision of financial statements

The Guarantor 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 the Financial Year of the Guarantor, the consolidated audited annual financial statements of the Guarantor and its subsidiaries (including the Borrower) for that Financial Year, commencing with the financial statements for the Financial Year ending on 31 December 2023;
(b)	as soon as possible, but in no event later than 90 days after the end of the 6-month period ending on 30 June in each Financial Year of the Guarantor, the semi-annual consolidated unaudited financial statements in respect of the Guarantor and its subsidiaries (including the Borrower), for that 6-month period (commencing with the 6-month period ending on 30 June 2023), duly certified as to their correctness by an officer of the Guarantor; and
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(c)	promptly after each request by the Agent, such further financial or other information in respect of the Borrower, the Ship, the Guarantor, the other Security Parties and the Group (including, without limitation, any information regarding any sale and purchase agreements, investment brochures, shipbuilding contracts, charter agreements and the operational expenditures for the Ship) as may be reasonably requested by the Agent.
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11.4	Form of financial statements
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All accounts delivered under Clause 11.3 (Provision of financial statements) will:

(a)	be prepared in accordance with all applicable laws and GAAP and, in the case of any consolidated audited financial statements, be certified by an independent and reputable auditor having requisite experience selected and appointed by the Borrower and the Corporate Guarantor;
(b)	fairly represent the financial condition of the Guarantor at the date of those accounts and of their profit for the period to which those accounts relate; and
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(c)	fully disclose or provide for all significant liabilities of the Guarantor and any of their subsidiaries.
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11.5	Shareholder and creditor notices and press releases
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The Guarantor will send the Agent, promptly upon its request, copies of all communications which are despatched to the Guarantor's shareholders or creditors or any class of them and any press releases with respect to the Guarantor.

11.6	Consents

The Guarantor will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Security Trustee of, all consents required:

(a)	for the Guarantor to perform its obligations under the Finance Documents and the Underlying Documents to which it is a party; and
(b)	for the validity or enforceability of the Finance Documents or the Underlying Documents to which it is a party, and the Guarantor will comply with the terms of all such consents.
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11.7	Maintenance of Security Interests

The Guarantor will:

(a)	at its own cost, do all that it reasonably can to ensure that any of the Finance Documents to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
(b)	without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Documents to which it is a party with any court or authority in all Pertinent Jurisdictions or such other jurisdiction which the Agent may require, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any of the Guarantor's Documents, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has or may become necessary or desirable for any Finance Documents to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
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11.8	Notification of litigation
---	---

The Guarantor will provide the Security Trustee with details of any legal or administrative action involving the Guarantor, the Borrower, any other Security Party, the Ship, its Earnings or its Insurances, as soon as such action is instituted or it becomes apparent to the Guarantor that it is likely to be instituted, unless it is clear that the legal or administrative action cannot have any Material Adverse Effect on the financial position of the Guarantor and/or its ability to perform its payment or other obligations under this Guarantee and the Finance Documents (or any of them) as they fall due and the Guarantor shall procure that all reasonable measures are taken to defend any such legal or administrative action.

11.9	Notification of default

The Guarantor will notify the Security Trustee as soon as the Guarantor becomes aware of:

(a)	the occurrence of an Event of Default or Potential Event of Default and is continuing; or
(b)	any matter which indicates that an Event of Default or Potential Event of Default may have occurred and is continuing,
---	---

and will thereafter keep the Security Trustee fully up-to-date with all developments.

11.10	Maintenance of status

The Guarantor shall procure that the Borrower will:

(a)	maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands; and
(b)	maintain its place of business, and keep its corporate documents and records, at the address stated in Clause 18.1 (Notices to Guarantor); and 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 Greece except for the Guarantor being a US NASDAQ listed company.
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11.11	Title; negative pledge and pari passu ranking
---	---

The Guarantor shall:

(a)	not create or permit to arise any Security Interest (except for Permitted Liens) over:
(i)	any asset present or future which is subject to the Security Interests created under the Finance Documents; or
---	---
(ii)	all or a substantial part of its other assets and in any event, only in its normal course of business; and
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(b)	procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
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11.12	No change of business
---	---

The Guarantor will not make any change to the nature of its business from that existing at the date of this Guarantee.

11.13	No other liabilities or obligations to be incurred

The Guarantor shall procure that the Borrower will not enter into any participation in speculative transactions or any off-balance sheet transactions and will not incur any liability or obligation except liabilities and obligations:

(a)	under the Finance Documents to which it is a party; and
(b)	reasonably incurred in the normal course of its business.
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11.14	Ownership
---	---
The Guarantor shall procure that there is no change in the legal or beneficial ownership in the shares of the Borrower (for the avoidance of doubt, any trading of the Guarantor's shares in the US NASDAQ would not result in a breach of this Clause 11.14) or in the control of the voting rights attaching to any of those shares other than in accordance with the Loan Agreement.
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11.15	Compliance Certificate
---	---
(a)	The Guarantor shall deliver, together with the Borrower to the Agent, together with each set of financial statements delivered pursuant to paragraphs (a) and (b) of Clause 11.3 (Provision of financial statements) (commencing with the financial statements to be provided for the 6-month period ending on 30 June 2023), a Compliance Certificate.
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(b)	Each Compliance Certificate shall be duly signed by an officer of the Borrower and the Guarantor, evidencing (inter alia) the Borrower’s compliance (or not, as the case may be) with the provisions of clause 11.19 (Minimum liquidity and Additional Minimum Liquidity), clause 11.20 (Dry Docking Reserve Amount) and clause 15.1 (Minimum required security cover) of the Loan Agreement.
12	CORPORATE UNDERTAKINGS
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12.1	General
---	---

The Guarantor also undertakes with the Security Trustee to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authority of the Majority Lenders, otherwise permit in writing.

12.2	Negative undertakings

The Guarantor will not:

(a)	change the nature of its business;
(b)	permit the Borrower to provide any form of credit or financial assistance to:
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(i)	a person who is directly or indirectly interested in the 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,
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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 than those which it could obtain in a bargain made at arms' length;
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(c)	permit the Borrower to open or maintain any account with any bank or financial institution except its respective accounts with the Agent and the Security Trustee for the purposes of the Finance Documents;
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(d)	permit the Borrower to acquire any shares or other securities other than short term debt obligations or Treasury bills issued by the US, the UK or a Participating Member State and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative;
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(e)	enter into any form of amalgamation, merger or de-merger, acquisition, divestiture, split-up or any form of reconstruction or reorganisation; or
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(f)	change, or allow the Borrower to change, its auditors without the Agent's prior written consent (such consent not to be unreasonably withheld or delayed) or its Financial Year.
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13	JUDGMENTS AND CURRENCY INDEMNITY
13.1	Judgments relating to Loan Agreement
---	---
This Guarantee shall cover any amount payable by the Borrower under or in connection with any judgment relating to the Loan Agreement and any other Finance Document.
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13.2	Currency indemnity
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In addition, clause 21.6 (Currency indemnity) of the Loan Agreement shall apply, with any necessary adaptations, in relation to this Guarantee.
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14	SET-OFF
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14.1	Application of credit balances
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Following the occurrence of an Event of Default which is continuing , each Creditor Party may without prior notice:
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(a)	apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Guarantor to that Creditor Party under any of the Finance Documents; and
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(b)	for that purpose:
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(i)	break, or alter the maturity of, all or any part of a deposit of the Guarantor;
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(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.
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14.2	Existing rights unaffected
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No Creditor Party shall be obliged to exercise any of its rights under Clause 14.1 (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).
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14.3	Sums deemed due to a Lender
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For the purposes of this Clause 14, a sum payable by the Guarantor 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 that Lender.
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15	NO SET-OFF OR TAX DEDUCTION
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15.1	No deductions
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All amounts due from the Guarantor under a Finance Document to which it is a party shall be paid:
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(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 Guarantor is required by law to make.
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15.2	Grossing‑up for taxes
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If the Guarantor is required by law, regulation or regulatory requirement to make a tax deduction from any payment due under a Finance Document:
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(a)	the Guarantor shall notify the Agent as soon as it becomes aware of the requirement;
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(b)	the Guarantor shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
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(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.
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15.3	Evidence of payment of taxes
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Within 1 month after making any tax deduction, the Guarantor shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax has been paid to the appropriate taxation authority.
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15.4	Exclusion of tax on overall net income
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In this Clause 15 "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.
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15.5	Claw back of Tax benefit
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If, following any such deduction or withholding as is referred to in Clause 15.2 (Grossing‑up for taxes) from any payment by the Guarantor, a Creditor Party shall receive or be granted a credit against or remission for any Taxes payable by it, the relevant Creditor Party shall, and to the extent that it can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of such Creditor Party to obtain any other relief or allowance which may be available to it, reimburse the Guarantor with such amount as the relevant Creditor Party shall in its absolute discretion certify to be the proportion of such credit or remission as will leave the pertinent Creditor Party (after such reimbursement) in no worse position than it would have been in had there been no such deduction or withholding from the payment by the Guarantor as aforesaid. Such reimbursement shall be made forthwith upon the relevant Creditor Party certifying that the amount of such credit or remission has been received by it. Nothing contained in this Guarantee shall oblige any Creditor Party to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Guarantor shall not, by virtue of this clause, be entitled to enquire about the Creditor Party’s tax affairs.
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16	SUPPLEMENTAL
16.1	Continuing guarantee
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This Guarantee shall remain in force as a continuing security at all times during the Security Period.
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16.2	Rights cumulative, non‑exclusive
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The Security Trustee's rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
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16.3	No impairment of rights under Guarantee
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If the Security Trustee omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Security Trustee under this Guarantee.
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16.4	Severability of provisions
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If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.
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16.5	Guarantee not affected by other security
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This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set‑off or netting or to combine accounts which the Security Trustee or any other Creditor Party may now or later hold in connection with the Loan Agreement or any other Finance Document.
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16.6	Guarantor bound by Loan Agreement and any other Finance Document
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The Guarantor confirms that it is familiar with the terms of the Loan Agreement and agrees with the Security Trustee that any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally also applies to this Guarantee.
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16.7	Applicability of provisions of Guarantee to other Security Interests
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Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 (Liability as principal and independent debtor) and 19 (Invalidity of Loan Agreement) shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 (Liability as principal and independent debtor) and 19 (Invalidity of Loan Agreement).
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16.8	Applicability of provisions of Guarantee to other rights
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Clauses 3 (Liability as principal and independent debtor) and 19 (Invalidity of Loan Agreement) shall also apply to any right of set‑off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 (Liability as principal and independent debtor) and 19 (Invalidity of Loan Agreement)), being an agreement referring to this Guarantee.
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16.9	Guarantor's approval of Loan Agreement and the other Finance Documents
The Guarantor has read the Loan Agreement and the other Finance Documents and understands and approves all the terms and conditions of the Loan Agreement and the other Finance Documents.
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16.10	Third Party Rights
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A person (other than a Creditor Party) who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 (“Third Parties Act”) to enforce or to enjoy the benefit of any term of this Guarantee.
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16.11	Disclosure of Information
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The provisions of clause 26.13 (Disclosure of information) of the Loan Agreement shall apply to this Guarantee as if set out in full in this Guarantee (with necessary modifications) and the Guarantor shall comply with the provisions of this clause as modified.
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16.12	Electronic disclosure
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The Guarantor undertakes and declares that any documents to fulfil the disclosure of the financial circumstances according to Sec. 18 of the German Banking Act (KWG) that were or are hereinafter submitted to the Hamburg Commercial Bank AG electronically or on data carriers through the Guarantor, the Borrower or any other Security Party or any of them or a third party are complete and correct. It further agrees and declares that:
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(a)	it is irrelevant whether such documents were submitted with or without signature;
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(b)	documents submitted to Hamburg Commercial Bank AG electronically or on data carriers according to Sec. 18 of the German Banking Act (KWG) have the same legal significance as documents with signature in paper form; and
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(c)	until written revocation, the declaration under this Clause 16.12 (Electronic disclosure) shall remain valid.
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17	ASSIGNMENT
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17.1	Assignment by Security Trustee
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The Security Trustee may transfer or assign its rights under and in connection with this Guarantee to the same extent as it may transfer or assign its rights under the Loan Agreement.
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18	NOTICES
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18.1	Notices to Guarantor
---	---

Any notice or demand to the Guarantor under or in connection with this Guarantee shall be given by letter or fax, and references to written notices, notices in writing signed by particular persons shall be construed accordingly, at:

Address: 4 Messogiou & Evropis Street

151 24 Maroussi

Greece

Tel: +30 211 1804097

Attention of: Mr. Anastasios Aslidis / Mr. Simos Pariaros

Email: aha@eurodry.gr / smp@eurodry.gr

or to such other address which the Guarantor may notify to the Security Trustee.

18.2	Application of certain provisions of Loan Agreement

Clauses 28.3 (Effective date of notices), 28.4 (Service outside business hours), 28.5 (Illegible notices), 28.6 (Valid notices), 28.7 (Electronic communication), 28.8 (English language) and 28.9 (Meaning of “notice”) of the Loan Agreement apply to any notice or demand under or in connection with this Guarantee.

18.3	Validity of demands

A demand under this Guarantee shall be valid notwithstanding that it is served:

(a)	on the date on which the amount to which it relates is payable by the Borrower under the Loan Agreement or any of the other Finance Documents; or
(b)	at the same time as the service of a notice under clause 19.2 (Actions following an Event of Default) of the Loan Agreement,
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and a demand under this Guarantee may refer to all amounts payable under or in connection with the Loan Agreement and any other Finance Document without specifying a particular sum or aggregate sum.

18.4	Notices to Security Trustee

Any notice to the Security Trustee under or in connection with this Guarantee shall be sent to the same address and in the same manner as notices to the Security Trustee under the Loan Agreement.

19	INVALIDITY OF LOAN AGREEMENT
19.1	Invalidity of Loan Agreement
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In the event of:

(a)	the Loan Agreement now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever, whether of a similar kind or not; or

(b)	without limiting the scope of paragraph (a), a bankruptcy of the Borrower, the introduction of any law or any other matter resulting in the Borrower being discharged from liability under the Loan Agreement, or the Loan Agreement ceasing to operate (for example, by interest ceasing to accrue),

this Guarantee shall cover any amount which would have been or become payable under or in connection with the Loan Agreement if the Loan Agreement had been and remained entirely valid, legal and enforceable, or the Borrower had not suffered bankruptcy, or any combination of such events or circumstances, as the case may be, and the Borrower had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Borrower under or in connection with the Loan Agreement shall include references to any amount which would have so been or become payable as aforesaid.

19.2	Invalidity of other Finance Documents

Clause 19.1 (Invalidity of Loan Agreement) also applies to each of the other Finance Documents to which the Borrower is a party.

20	GOVERNING LAW AND JURISDICTION
20.1	English law
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This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

20.2	Exclusive English jurisdiction

Subject to Clause 20.3 (Choice of forum for the exclusive benefit of the Security Trustee), the courts of England shall have exclusive jurisdiction to settle any Dispute.

20.3	Choice of forum for the exclusive benefit of the Security Trustee

Clause 20.2 (Exclusive English jurisdiction) is for the exclusive benefit of the Security Trustee, which reserves the rights:

(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.
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The Guarantor shall not commence any proceedings in any country other than England in relation to a Dispute.

20.4	Process agent

The Guarantor irrevocably appoints Shoreside Agents Ltd at its registered office for the time being, presently at 11 The Timber Yard, London N1 6ND, 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.

20.5	Meaning of "proceedings" and ”Dispute”

In this Clause 20, "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 Guarantee (including a dispute relating to the existence, validity or termination of this Guarantee) or any non-contractual obligation arising out of or in connection with this Guarantee.

20.6	Creditor Party rights unaffected

Nothing in this Clause 20 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, or 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.

21	Bail-In
21.1	Contractual recognition of bail-in
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(a)	Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each party to the Guarantee acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
---	---
(i)	any Bail-In Action in relation to any such liability, including (without limitation):
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(A)	a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
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(B)	a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
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(C)	a cancellation of any such liability; and
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(ii)	a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability,
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21.2	Each Creditor Party may enforce and enjoy the benefit of this Clause 21.1 (Contractual recognition of bail-in) **** subject to the provisions of the Third Parties Act
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AS WITNESS the hands of the duly authorised officers or attorneys of the Guarantor and the Security Trustee the day and year first before written.

EXECUTION PAGE

GUARANTOR
SIGNED by	)
EURODRY LTD.	)
acting by	) /s/ Stefania Karmiri
as attorney-in-fact	)
such execution being witnessed by:	) /s/ Ilias Vassilios Tsigos
SECURITY TRUSTEE
SIGNED by	)
HAMBURG COMMERCIAL BANK AG	)
acting by	) /s/ Foteini Apalaki
expressly authorised in accordance with the laws of	)
the Federal Republic of Germany by virtue of a	)
power of attorney dated 9 May 2023	)
such execution being witnessed by:	) /s/ Ilias Vassilios Tsigos

HTML Editor

EXHIBIT 4.19

THIS SUPPLEMENTAL AGREEMENT is made this 30^th^ day of June 2023

BETWEEN:

(1)	(a)	ULTRA ONE SHIPPING LTD, a company incorporated in accordance with the laws of the Republic of Liberia whose registered office is situated at 80, Broad Street, Monrovia, Liberia (“Borrower A”); and
(b)	KAMSARMAX ONE SHIPPING LTD, a company incorporated in accordance with the laws of the Republic of Marshall Islands whose registered office is situated at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“Borrower B” and together with Borrower A, the “Borrowers” and each one of them, a “Borrower”);
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(2)	THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as lenders (the “Lenders”);
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(3)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece and acting as arranger through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Arranger”);
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(4)	EUROBANK S.A, a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece and acting as account bank through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Account Bank”);
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(5)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece and acting as agent through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Agent”); and
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(6)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece and acting as security trustee through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Security Trustee”). ****
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WHEREAS:

(A)	this Supplemental Agreement is supplemental to a loan agreement dated 27 January 2021 (the “Principal Agreement”) made between (inter alios) (1) the Borrowers as joint and several borrowers, (2) the Lenders, (3) the Arranger, (4) the Account Bank, (5) the Agent and (6) the Security Trustee, relating to a secured loan facility of up to $26,700,000 (of which the principal amount outstanding at the date hereof is $22,200,000, made available by the Lenders to the Borrowers for the purpose stated therein (the Principal Agreement as hereby amended by this Supplemental Agreement and as the same may hereinafter be further amended and/or supplemented, the “Loan Agreement”);
(B)	by an Agency and Trust Deed dated 27 January 2021 and entered into pursuant to the Principal Agreement, it was, inter alia, agreed that the Security Trustee would hold the Trust Property on trust for the Lenders;
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(C)	the Borrowers and the other Security Parties have requested that the Creditor Parties provide their consent to the transition of the interest rate provisions in the Loan Agreement from LIBOR to Term SOFR; and
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(D)	this Agreement sets out the terms and conditions upon which the Creditor Parties shall, at the request of the Borrowers and the other Security Parties, provide their consent to the amendments and changes referred to in paragraph (C) above.

NOW IT IS HEREBY AGREED as follows:

1.	Definitions
1.1	Defined terms and expressions
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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 Supplemental Agreement.

1.2	Definitions

In this Supplemental Agreement, the words and expressions specified below shall have the meaning attributed to them below:

“Effective Date” means the date, no later than 31 July 2023, on which the Agent notifies the Borrowers and the Lenders in writing that it has received the documents and evidence specified in Clause 4 (Conditions Precedent) of this Supplemental Agreement, in form and substance satisfactory to the Agent.

“Loan Agreement” means the Principal Agreement as hereby amended and as the same may from time to time be further amended and/or supplemented.

“Mortgage Amendment” or “Mortgages Amendments” means an amendment to each of the first preferred mortgages dated 29 January 2021 recorded over the Ships in favour of the Security Trustee;

“Rate Switch Date” means 31 July 2023.

“Ships” means:

(a)	the m.v. «ALEXANDROS P.», ** of gross registered tons 35812 and 21224 net registered tons, or thereabouts, built in 2017, and duly documented in the name of Borrower A under the laws of the Republic of Liberia with official number 17150 (“Ship A**”);
(b)	the m.v. «XENIA», of gross registered tons 44190 and 27620 net registered tons, or thereabouts, built in 2016, and duly documented in the name of Borrower B under the laws of the Republic of the Marshall Islands with official number 6752 (“Ship B”);
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and a “Ship” means any of them.

1.3	Application of construction and interpretation provisions of Principal Agreement

Clauses 1.3 to 1.8 (inclusive) of the Principal Agreement applies to this Supplemental Agreement as it were expressly incorporated in it with any necessary modifications.

2.	REPRESENTATIONS AND WARRANTIES
2.1	Repetition of Loan Agreement representations and warranties
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Each of the Borrowers represents to the Creditor Parties that the representations in Clause 10 (Representations and Warranties) of the Principal Agreement, as amended by this Supplemental Agreement and updated with appropriate modifications to refer to this Supplemental Agreement and, where appropriate, each other Finance Document which is being amended by this Supplemental Agreement, remain true and not misleading if repeated on the date of this Supplemental Agreement, and, if different on the Effective Date and on the Rate Switch Date as if made on such date with reference to the circumstances existing at each such date.

2.2	Additional representations and warranties

Each of the Borrowers further represents and warrants to the Creditors Parties as of the date of this Supplemental Agreement that:

(a)	it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Agreement and the Mortgage Amendment to which it is a party;
(b)	the entry into and performance by it of this Agreement and the Mortgage Amendment to which it is a party does not and will not conflict with any law or regulation applicable to it, its constitutional documents or any agreement or instrument binding upon it or any of its assets;
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(c)	none of the Borrowers is nor on the Effective Date and on the Rate Switch Date will be in default under any agreement by which it is or will be on the Effective Date and on the Rate Switch Date bound or in respect of any financial commitment, or obligation.
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3.	AGREEMENT OF ALL PARTIES TO THE AMENDMENTS TO THE PRINCIPAL AGREEMENT AND THE OTHER FINANCE DOCUMENTS
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The Creditor Parties, relying upon the representations and warranties on the part of the Security Parties contained in Clause 2, hereby agree with the Borrowers, subject to and upon the terms and conditions of this Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to the replacement of LIBOR by Term SOFR reference rate as the benchmark rate for the calculation of interest under the Loan Agreement and the amendment of the Principal Agreement and the other Finance Documents required for such purposes as set out in Clause 5. (Amendments to the Principal Agreement) and Clause 6. (Amendments to Finance Documents) of this Supplemental Agreement.

4.	CONDITIONS PRECEDENT

The agreement of the parties to this Agreement contained in Clause 3. (Agreement of the parties to this Agreement) shall be expressly subject to no Event of Default having occurred at the time of the Effective Date and further subject to the condition that the Agent shall have received on or before the Effective Date in form and substance satisfactory to the Agent and its legal advisers:

(a)	a recent certificate of good standing or equivalent document issued by the competent authorities of the place of its incorporation in respect of each of the Borrowers and the other corporate Security Parties;
(b)	certified and duly legalised copies of written resolutions passed at a meeting of the Board of Directors of the Borrowers and each other corporate Security Party evidencing approval of this Supplemental Agreement and all documents contemplated hereby to which such Security Party is a party and authorising appropriate officers or attorneys to execute the same and to sign all notices required to be given under this Supplemental Agreement on their behalf or other evidence of such approvals and authorisations as shall be acceptable to the Agent;
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(c)	the original of a duly legalised power of attorney issued by any Security Party pursuant to the resolutions referred to in paragraph (b) of this Clause 4. duly legalized and apostilled;
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(d)	this Supplemental Agreement duly executed by the parties hereto;
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(e)	the Mortgage Amendments duly executed by the relevant parties thereto and permanently registered against the relevant Ship through the competent registry;
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(f)	a confirmation letter – acknowledgement from each of the Security Parties, in the form of Schedule 8;
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(g)	such further agreements amendatory or supplemental to the Finance Documents duly executed by the relevant parties; and
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(h)	favourable opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Liberia and the Marshall Islands as the Agent may require,
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and the Agent shall notify the Borrowers promptly upon being so satisfied.

5.	AMENDMENTS TO THE PRINCIPAL AGREEMENT

With effect on and from the Rate Switch Date, the provisions of the Principal Agreement shall be amended as follows:

5.1	the definitions of “Interbank Market”, “Interest Payment Date”, “LIBOR”, “Negotiation Period”, “Replacement Benchmark”, “Screen Rate" and “Screen Rate Replacement Event" shall be deleted in their entirety from Clause 1.2 (Definitions) of the Principal Agreement;
5.2	the definitions of “Business Day”, “Interest Period” and “Quotation Day” in Clause 1.2 (Definitions) of the Principal Agreement shall be amended to read as follows:
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“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in New York, Athens, Piraeus, and, in relation to the fixing of interest rate, any day which is a US Government Securities Business Day;

“Interest Period” means any period by reference to which interest or other payments in respect of the Loan are calculated;

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two US Government Securities Business Days before the first day of that period unless market practice differs in the relevant syndicated loan market, in which case the Quotation Day shall be determined by the Agent in accordance with that market practice (and if quotations would normally be given on more than one (1) day, the Quotation Day will be the last of those days)”;

5.3	the following new definitions shall be inserted in the correct alphabetical order in Clause 1.2 (Definitions) of the Principal Agreement:

“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 the Loan or an Unpaid Sum to the last day of the current Interest Period in respect of the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum 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 or Unpaid Sum received by it on deposit with a leading bank in the Relevant Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“Credit Adjustment Spread” means in relation to:

(a)	0.11448%, for an Interest Period of a duration of up to three (3) months but not including three (3) months;
(b)	0.26161%, for an Interest Period of a duration exceeding three (3) months.
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“Funding Rate” means an individual rate notified by a Lender to the Agent pursuant to paragraph (a) (ii) of Clause 5.6 (Cost of funds);

“Historic Term SOFR” **** means, in relation to the Loan or any part of the Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan and which is as of a day which is no more than three US Government Securities Business Days before the Quotation Day;

“Interpolated Historic Term SOFR” means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
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(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for a day which is no more than six US Government Securities Business Days (and no less than three US Government Securities Business Days) before the Quotation Day; and
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(b)	the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
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“Interpolated Term SOFR” means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
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(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for the day which is three US Government Securities Business Days before the Quotation Day; and
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(b)	the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
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“Market Disruption Rate” means the percentage rate per annum which is the aggregate of the Reference Rate and the Credit Adjustment Spread.

“Reference Rate” means, in relation to the Loan or any part of the Loan:

(a)	the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b)	as otherwise determined pursuant to Clause 5.5 (Unavailability of Term SOFR) of the Loan Agreement,
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and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero;

“Relevant Market” means the market for overnight cash borrowing collateralised by US Government Securities;

“Selection Notice” means a notice substantially in the form set out in Schedule 7 (or in any other form which the Agent approves or reasonably requires);

“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York, (or any other person which takes over the publication of that rate);

“Specified Time” means a day or time determined in accordance with Schedule 6 (Timetables);

“Term SOFR” means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate);

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower or a Security Party under the Finance Documents;

“US Government Securities Business Day" means any day other than:

(a)	a Saturday or a Sunday; and
(b)	a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.”;
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5.4	following paragraph **** shall be added to Clause 1.3 (Construction of certain terms) of the Principal Agreement:
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“a Lender's "cost of funds" in relation to its participation in the Loan (or any part of the Loan) is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan (or that part of the Loan) for a period equal in length to the Interest Period of the Loan (or that part of the Loan)”;

5.5	Clause 5 of the Principal Agreement shall be deleted and replaced as follows:
“5.	INTEREST
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5.1	Calculation of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan or any part of the Loan in respect of each Interest Period is a percentage rate per annum which is the aggregate of:
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(i)	the Margin and the Reference Rate in relation to an Interest Period of a duration of three (3) moths, and
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(ii)	the Margin and the Reference Rate and the Credit Adjustment Spread in relation to an Interest Period of a duration of up to three (3) months but not including three (3) months or of a duration exceeding three (3) months.
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5.2	Payment of interest. The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (and, if an Interest Period is longer than 3 months, the Borrowers shall also pay interest then accrued on the Loan or any part of the Loan on the dates falling at three (3) monthly intervals after the first day of the Interest Period).
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5.3	Notification of rates of interest. The Agent shall notify the Borrowers and each Lender of:
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(a)	the determination of a rate of interest under this Agreement; and
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(b)	each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
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5.4	Unavailability of Term SOFR
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(a)	Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
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(b)	Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
(c)	Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of Loan or that part of the Loan.
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(d)	Cost of funds: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 5.6 shall apply to the Loan or that part of the Loan for that Interest Period.
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5.5	Market disruption
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If before close of business in Athens on the Quotation Day for the relevant Interest Period, the Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 40 per cent (40%) of the Loan or that part of the Loan as appropriate) that its cost of funds relating to its participation in the Loan or that part of the Loan would be in excess of the Market Disruption Rate, then Clause 5.6 shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.

5.6	Cost of funds
(a)	If this Clause 5.6 applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
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(i)	the Margin; and
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(ii)	the rate notified to the Agent (and the Borrowers) 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 its cost of funds relating to its participation in the Loan or that part of the Loan.
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(b)	If this Clause 5.6 applies and the Agent or the Borrowers so requires, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
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(c)	Subject to Clause 24.7, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
(d)	If paragraph (e) below does not apply and any rate notified to the Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
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(e)	If this Clause 5.6 applies pursuant to Clause 5.5 and
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(i)	a Lender's Funding Rate is less than the Market Disruption Rate; or
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(ii)	a Lender does not notify a rate by the time specified in sub-paragraph (ii) of paragraph (a) of this Clause 5.6 above,
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that Lender's cost of funds relating to its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be the Market Disruption Rate.

5.8	Break Costs
(a)	The Borrowers shall, within three (3) Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
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(b)	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become or may become payable.;
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5.9	Illegality related to interest rates based upon Term SOFR
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It is becomes unlawful and/or prohibited in any Relevant Jurisdiction for a Lender to charge interest rates based upon Term SOFR:

(a)	that Lender shall promptly notify the Agent upon becoming aware of that event;
(b)	upon the Agent notifying the Borrowers in writing, the available Commitment of that Lender will be immediately cancelled; and
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(c)	the Borrowers shall prepay that Lender's participation in the Loan not later than ninety days after the Agent has notified the Borrowers (in accordance with (b) above) or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation prepaid.”.
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5.6	Clause 6 of the Principal Agreement shall be deleted and replaced as follows:
“6.	INTEREST PERIODS
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6.1	Selection of Interest Periods
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(a)	The Borrowers may select the Interest Period for the Loan in the Drawdown Notice for the Loan. Subject to paragraphs (b) and (c) below and Clause 6.2, the Borrowers may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
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(b)	Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrowers not later than the Specified Time.
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(c)	If the Borrowers fail to select an Interest Period in the Drawdown Notice or fails to deliver a Selection Notice to the Agent in accordance with paragraphs (a) and (b) above of this Clause 6.1, the relevant Interest Period will, subject to Clause 6.2, be three (3) Months.
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(d)	Subject to this Clause 6, the Borrowers may select an Interest Period of three (3) or six (6) Months or such longer or shorter period as the Agent may, in its sole discretion, agree with the Borrowers.
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(e)	An Interest Period in respect of the Loan shall not extend beyond the final Repayment Date.
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(f)	In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above of this Clause 6.1, select a longer Interest Period for the remaining part of the Loan.
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(g)	The first Interest Period for the Loan shall start on the Drawdown Date and, subject to paragraph (h) below, each subsequent Interest Period shall start on the last day of its preceding Interest Period.
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(h)	Except for the purposes of paragraph (f) above of this Clause 6.1 and Clause 6.2, the Loan shall have one Interest Period only at any time.
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6.2	Changes to Interest Periods
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(a)	In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Agent may establish an Interest Period that is shorter than the Interest Period selected in the relevant Selection Notice for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 6.1.
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(b)	If the Agent makes any change to an Interest Period referred to in this Clause 6.2, it shall promptly notify the Borrowers and the Lenders.
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6.3	Non-Business Days
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If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).”;

5.7	Clause 7 of the Principal Agreement shall be deleted and replaced as follows:
“7.	DEFAULT INTEREST
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7.1	Default Interest
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(a)	If the Borrowers or a Security Party fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the relevant due date for payment thereunder, that is: (i) the date on which such Finance Documents provide that such amount is due for payment; or (ii) if a Finance Document provides that such amount is payable on demand, three (3) days following the date on which the demand is served; or (iii) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable, up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two point five per cent. (2.5%) per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this Clause shall be immediately payable by the Borrowers and the Security Parties on demand by the Agent.
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(b)	If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
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(i)	the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
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(ii)	the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two and a half per cent (2.5%) per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
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(c)	Default Interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.”
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5.8	paragraph (a) of Clause 20.3 of the Principal Agreement shall be amended to read as follows:
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“(a)	any amendment or supplement to a Finance Document, or any proposal for such an amendment or supplement to be made, including, but not limited to, an amendment pursuant to or contemplated by Clause 24.7”;
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5.9	a new clause 24.7 **** shall be inserted in Clause 24 (Increased Costs) of the Principal Agreement to read as follows:
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“24.7	Changes to Reference Rates
(a)	Subject to paragraph (b) of Clause 27.2, any amendment or waiver which relates to:
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(i)	providing for the use of a Replacement Reference Rate; and
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(ii)	aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
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(iii)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement;
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(iv)	implementing market conventions applicable to that Replacement Reference Rate;
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(v)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
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(vi)	adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation,
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may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrowers.

(b)	If any Lender fails to respond to a request for an amendment or waiver described in, or for any other vote of Lenders in relation to, paragraph (a) above within 5 Business Days (or such longer time period in relation to any request which the Borrowers and the Agent may agree) of that request being made:
(i)	its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and
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(ii)	its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(c)	In this Clause 24.7:
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“Published Rate” means:

(i)	SOFR; or
(ii)	Term SOFR for any Quoted Tenor.
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“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.

“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

“Replacement Reference Rate” means a reference rate which is:

(a)	formally designated, nominated or recommended as the replacement for a Published Rate by:
(i)	the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
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(ii)	any Relevant Nominating Body,
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and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;

(b)	in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
(c)	in the opinion of the Majority Lenders and the Borrowers, an appropriate successor or alternative to a Published Rate.”;
---	---
5.10	paragraph (a) of Clause 27.2 of the Principal Agreement shall be amended to read as follows:
---	---
“(a)	a reduction in the Margin or in the calculation of interest;”;
---	---
5.11	the definition of “Mortgage Amendment” in clause 1.2 of this Supplemental Agreement shall be inserted into clause 1.2 of the Principal Agreement;
---	---
5.12	the definition of “Finance Documents” in clause 1.2 of the Principal Agreement shall be construed to include this Supplemental Agreement and the Mortgage Amendment.
---	---
5.13	a new Schedule 6 (Timetables) will be inserted in the Principal Agreement to read as follows:
---	---

“SCHEDULE 6

TIMETABLES

Delivery of a duly completed drawdown notice or Selection Notice	Two Business Days before the intended Drawdown Date (Clause 4.1) or Selection Notice (Clause 6.1)
Reference Rate is fixed	on the Quotation Day
5.14	a new Schedule 7 (Selection Notice) will be inserted in the Principal Agreement to read as follows:
---	---

“SCHEDULE 7

SELECTION NOTICE

From: ULTRA ONE SHIPPING LTD & KAMSARMAX ONE SHIPPING LTD

To: EUROBANK S.A. **** **** Dated: [●]

Dear Sirs

ULTRA ONE SHIPPING LTD & KAMSARMAX ONE SHIPPING LTD – [●] Loan Agreement dated 27 January 2021 (as amended by a supplemental agreement dated [●] June 2023 (the “Loan Agreement”)

1. We refer to the Loan Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

2. We request [that the next Interest Period for the Loan be [●] OR [an Interest Period for a part of the Loan in an amount equal to [●] (which is the amount of the Repayment Instalment next due) ending on [●] (which is the Repayment Date relating to that Repayment Instalment) and that the Interest Period for the remaining part of the Loan shall be [●].

3. This Selection Notice is irrevocable.

Yours faithfully

_____________________________

[●]

authorised signatory for

ULTRA ONE SHIPPING LTD

and

KAMSARMAX ONE SHIPPING LTD

5.15	a new Schedule 8 (Security Party Confirmation Letter-Acknowledgement) will be inserted in the Principal Agreement to read as follows:

“SCHEDULE 8

CONFIRMATION LETTER - ACKNOWLEDGEMENT

We hereby confirm and acknowledge that we have read and understood the terms and conditions of the supplemental agreement dated [●] 2023 (the “Supplemental Agreement”) to the loan agreement dated 27 January 2021 (the “Principal Agreement” and together with the Supplemental Agreement, the “Loan Agreement”) made by and between (i) ULTRA ONE SHIPPING LTD and KAMSARMAX ONE SHIPPING LTD as Borrowers, (ii) the banks and financial institutions listed in Schedule 1 thereto as Lenders and (iii) Eurobank S.A. as Arranger, Account Bank, Agent and Security Trustee, and agree in all respects to the same and hereby confirm that the [Guarantee dated 27 January 2021 and the Letter of Undertaking-Assignment dated 29 January 2021] / [Approved Manager’s Undertaking-Assignment dated 29 January 2021] and executed by us in favour of the Security Trustee remain/remains in full force and effect, extend/extends to the obligations of the Borrowers under the Principal Agreement (as amended by the Supplemental Agreement) and continue/continues to stand as security for the obligations of the Borrowers under the Principal Agreement (as amended by the Supplemental Agreement).

Capitalised terms shall have the same meanings ascribed to them in the Principal Agreement and in the Supplemental Agreement, unless otherwise defined herein.

_____________________________

[Director/Officer] [Attorney-in-fact]

[For and on behalf of]

[Eurodry Ltd.) /[Eurobulk (Far East) Ltd. Inc.]

Dated: 2023”

6.	AMENDMENTS TO FINANCE DOCUMENTS

The Borrowers hereby agree with the Creditor Parties that the provisions of the Finance Documents shall, with effect on and from the Rate Switch Date, be varied and/or amended and/or supplemented as follows:

(a)	the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Principal Agreement and those Finance Documents as amended and supplemented by this Supplemental Agreement and the Mortgage Amendment; and
(b)	by construing references throughout each of the Finance Documents to “this Agreement”, “this Deed”, “hereunder” and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Supplemental Agreement and the Mortgage Amendment.
---	---
7.	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS
---	---
7.1	The Borrowers and the other Security Parties confirm, acknowledge and agree that, save for the alterations to the Loan Agreement made or to be made pursuant to this Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Agreement, and 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 the name of Eurobank S.A.
---	---
7.2	Nothing in this Supplemental Agreement shall constitute a novation.
---	---
7.3	This Agreement shall constitute notice to the Borrowers, the Security Parties and the Creditor Parties for the purposes of clause 5.2 of the Agency and Trust Deed.
---	---
8.	EXPENSES
---	---

For the avoidance of doubt, the Borrowers undertake to pay to the Creditor Parties upon demand and from time to time, all costs, charges and expenses (including legal fees) incurred by the Creditor Parties in connection with the preparation, negotiation, execution and (if required) registration or preservation of rights under the enforcement or attempted enforcement of the Loan Agreement, the Finance Documents and this Supplemental Agreement or otherwise in connection with the Loan or any part thereof. ****

9.	NOTICES

The provisions of clause 28 of the Principal Agreement shall apply to this Supplemental Agreement as if the same were set out herein in full.

10.	SUPPLEMENTAL
10.1	This Supplemental Agreement may be executed in any number of counterparts.
---	---
10.2	A person who is not a party to this Supplemental 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 Supplemental Agreement.
---	---
11.	Law and jurisdiction
---	---

This Supplemental Agreement shall be governed by and construed in accordance with English Law and the provisions of clause 30 (LAW AND JURISDICTION) of the Principal Agreement shall apply mutatis mutandis.

IN WITNESS whereof the parties hereto have caused this Supplemental Agreement to be duly executed the day and year first before written.

EXECUTION PAGES

THE BORROWERS

Signed by )

Stefania Karmiri ) /s/ Stefania Karmiri

for and on behalf of )

ULTRA ONE SHIPPING LTD )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

Signed by )

Stefania Karmiri ) /s/ Stefania Karmiri

for and on behalf of )

KAMSARMAX ONE SHIPPING LTD )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE LENDERS

Signed by )

S. Giagkos and N. Mitropoulou ) /s/ Stavros Yagos

for and on behalf of ) /s/ Nikoletta Mitropoulou

EUROBANK S.A. )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE ARRANGER

Signed by )

S. Giagkos and N. Mitropoulou ) /s/ Stavros Yagos

for and on behalf of ) /s/ Nikoletta Mitropoulou

EUROBANK S.A. )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE ACCOUNT BANK

Signed by )

S. Giagkos and N. Mitropoulou ) /s/ Stavros Yagos

for and on behalf of ) /s/ Nikoletta Mitropoulou

EUROBANK S.A. )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE AGENT

Signed by )

S. Giagkos and N. Mitropoulou ) /s/ Stavros Yagos

for and on behalf of ) /s/ Nikoletta Mitropoulou

EUROBANK S.A. )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE SECURITY TRUSTEE

Signed by )

S. Giagkos and N. Mitropoulou ) /s/ Stavros Yagos

for and on behalf of ) /s/ Nikoletta Mitropoulou

EUROBANK S.A. )

in the presence of

Witness: /s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

HTML Editor

Exhibit 4.20

AMENDMENT NO 1 TO LOAN FACILITY AGREEMENT

To:	Light Shipping Ltd Trust
	Company Complex
	Ajeltaje Road
	Ajeltake Island Majuro
	Marshall Islands MH96960
	as borrower (Borrower A)
	Good Heart Shipping Ltd
	80 Broad Sreet
	Monrovia
	Liberia as
	borrower
	(Borrower B)
	and
	Eurodry Ltd.
	Trust Company Complex
	Ajeltaje Road
	Ajeltake Island Majuro
	Marshall Islands MH96960
	as guarantor
	(the Guarantor)
From:	National Bank of Greece S.A.
	as lender (the Lender)

___4 July__________ 2023

Dear Sirs

Re: Loan facility agreement relating to "STARLIGHT " with IMO no. 9279484 and " GOOD HEART " with IMO no. 9669380 (the Vessels) ****

BACKGROUND

(A)

We refer to the loan facility agreement dated 30 September 2021 (as amended and supplemented from time to time, the Facility Agreement) made between (i) Light Shipping Ltd (Borrower A) and Good Heart Shipping Ltd (Borrower B) as joint and several borrowers (the Borrowers) and (ii) the Lender in respect of a loan facility of (originally) up to $22,000,000 of which the principal amount outstanding is currently $15,800,000 (the Loan Facility).

(B)	Following discussions, the Obligors acknowledge that the discontinuation of LIBOR is affecting a great number of floating rate Dollar loan facilities (including the Loan Facility) as they will need to be amended to provide for the use of a replacement benchmark rate.
(C)	Accordingly, the parties have agreed that the Facility Agreement and the other Finance Documents be amended and supplemented on the terms of this Agreement which addresses the discontinuation of LIBOR and:
---	---
(i)	sets out the terms for the replacement of LIBOR as the benchmark rate for the calculation of interest under the Facility Agreement by a successor rate (the LIBOR Replacement); and
---	---
(ii)	effects the consequential amendments to the Facility Agreement and the other Finance Documents necessary to give effect to the LIBOR Replacement,
---	---
while so far as possible not affecting any other provisions of the Finance Documents or any other rights or obligations of any parties to the Finance Documents. The Lender has agreed to such request subject to the terms of this letter.
---

IT IS AGREED as follows:

1.	DEFINITIONS AND INTERPRETATION
1.1	Definitions
---	---

In this Agreement, including the recitals, defined expressions shall have the meaning given to them in Part 2 of Schedule 1 (General Definitions and Construction) and, in addition, the following expressions shall have the following meanings:

Amended Facility Agreement means the Facility Agreement as amended by this Agreement.

Effective Date means the date on which the conditions precedent specified in Schedule 2 (Conditions precedent) are satisfied in form and substance satisfactory to the Lender (or waived by the Lender) as confirmed by the Lender by notice to the Borrower.

LIBOR means **** the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate).

Obligors means **** the Borrowers and the Guarantor.

Supplementary Mortgage Documentation means a mortgage addendum to the first preferred Liberian ship mortgage dated 30 September 2021 granted over "GOOD HEART" by Borrower B in favour of the Lender, in such form as the Lender may approve or require.

1.2	Construction
(a)	References to "this Agreement" shall include the Schedules to it.
---	---
(b)	Clause 1.2 (Construction) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
---	---
1.3	Designation as a Finance Document
---	---
The Borrower and the Lender designate this Agreement as a Finance Document.
---
1.4	Third party rights
---	---
Unless provided to the contrary in a Finance Document, a person (other than the Lender or an Obligor) 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.
---
2.	CONDITIONS PRECEDENT
---	---
2.1	Conditions precedent to Effective Date
---	---

The occurrence of the Effective Date is conditional upon the Lender having received (or waived receipt of) all of the documents and other evidence listed in Schedule 2 (Conditions precedent) in form and substance satisfactory to the Lender on or before 30 June 2023 or such later dateas the Lender may agree.

2.2	Notifications

The Lender shall notify the Borrower promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Paragraph 2.1 above.

3.	REPRESENTATIONS
3.1	Obligor representations
---	---
On the date of this Agreement and on the Effective Date, each Obligor represents and warrants to the Lender that:
---
(a)	it is a corporation or company, duly incorporated or formed and validly existing under the laws of its jurisdiction of incorporation or formation;
---	---

(b)	the obligations expressed to be assumed by it in this Agreement are, subject to any general principles of law limiting its obligations which are applicable to creditors generally, legal, valid, binding and enforceable obligations;
(c)	the entry into and performance by it of this Agreement does not and will not:
---	---
(i)	conflict with any law or regulation applicable to it, its constitutional documents or any agreement or instrument binding upon it or any of its assets; or
---	---
(ii)	constitute a default or termination event (however described) under any agreement or instrument binding on it or any of its assets; and
---	---
(d)	it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Agreement and the Amended Facility Agreement.
---	---
3.2	No representations or advice by the Lender
---	---
(a)	Each Obligor confirms to the Lender that it has made (and shall continue to make) its own independent investigation and assessment of the merits and effect of the amendments contemplated by this Agreement, including, without limitation:
---	---
(i)	the impact of those amendments on the payments to be made under the Amended Facility Agreement (and under any associated transaction, including any hedging or derivative transaction entered into or to be entered into in relation to the Amended Facility Agreement);
---	---
(ii)	the administration of, submission of data to, or any other matter related to, any rate referred to in, or contemplated by, the Amended Facility Agreement;
---	---
(iii)	the suitability of any rate referred to in, or contemplated by, the Amended Facility Agreement for any Obligor or any entity related to it; or
---	---
(iv)	the composition or characteristics of any rate referred to in, or contemplated by, the Amended Facility Agreement, including whether it is similar to, produces the same value or economic equivalence to, or has the same volume or liquidity as, any rate which it replaces (in whole or in part).
---	---
(b)	The Lender makes no representation or warranty as to any matter referred to in subparagraph (a) above. Each Obligor agrees that it has not entered into this Agreement in reliance on any such representation or warranty from the Lender, acknowledges that it is responsible for taking its own advice in relation to this Agreement and the matters referred to in sub- paragraph (a) above and agrees that it has not received or relied
---	---

upon any such advice from the Lender, and waives all rights and remedies in respect of those matters.
4.	AMENDMENTS
---	---
4.1	Amendments
---	---
(a)	On and from the Effective Date, the amendments set out in Schedule 1 will take effect and will override any contrary provisions in the Facility Agreement.
---	---
(b)	This Agreement shall be read together with the Facility Agreement and, if there is any conflict between this Agreement and any other provision of any Finance Document, this Agreement will prevail (without prejudice to any rights or obligations accruing before the Effective Date).
---	---
4.2	Consents
---	---
Each Obligor:
---
(a)	accepts and agrees to be bound by the terms and conditions of this Agreement;
---	---
(b)	confirms that on and from the Effective Date, the definition of, and references throughout each of the Finance Documents to, the Facility Agreement shall be construed as if the same referred to the Amended Facility Agreement; and
---	---
(c)	acknowledges and agrees that each Finance Document to which it is a party shall remain in full force and effect and (in the case of each Finance Document granting Security and/or a guarantee) shall, on and from the Effective Date, continue to secure or, as applicable, guarantee:
---	---
(i)	the payment of all amounts owing from time to time by the Borrower under the Amended Facility Agreement; and
---	---
(ii)	the performance and observance by the Borrower of obligations under the Amended Facility Agreement and the other Finance Documents, notwithstanding the amendments to the Facility Agreement made by this Agreement.
---	---
4.3	Security confirmation
---	---
On the Effective Date, each Obligor confirms that:
---

(a)	any Security created by it under the Finance Documents extends to the obligations of the relevant Obligors under the Amended Facility Agreement and the other Finance Documents and shall, on and from the Effective Date, continue to secure or, as applicable, guarantee:
(i)	the payment of all amounts owing from time to time by the Borrower under the Amended Facility Agreement; and
---	---
(ii)	the performance and observance by the Borrower of obligations under the Amended Facility Agreement and the other Finance Documents, notwithstanding the amendments to the Facility Agreement made by this Agreement;
---	---
(b)	the obligations of the relevant Obligors under the Amended Facility Agreement are included in the Secured Liabilities;
---	---
(c)	the Security created under the Finance Documents continues in full force and effect on the terms of the respective Finance Documents; and
---	---
(d)	this Security confirmation neither creates nor purports to create a registrable Security.
---	---
4.4	Finance Documents to remain in full force and effect
---	---
The Finance Documents shall remain in full force and effect and, from the Effective Date:
---
(a)	the Facility Agreement and the applicable provisions of this Agreement will be read and construed as one document;
---	---
(b)	any reference to the Facility Agreement contained in any of the Finance Documents shall be read as a reference to the Facility Agreement as amended and/or supplemented by this Agreement and as may further be amended or supplemented from time to time; and
---	---
(c)	except to the extent expressly waived by the amendments effected by this Agreement, no waiver is given by this Agreement and the Lender expressly reserves all its rights and remedies in respect of any breach of, or default (however described) under the Finance Documents.
---	---
5.	MISCELLANEOUS
---	---
5.1	Costs and expenses
---	---

The Borrower shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing and execution of this Agreement and any other documents referred to in this Agreement.
5.2	Counterparts
---	---
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
---
6.	GOVERNING LAW AND JURISDICTION
---	---
6.1	Governing law
---	---
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
---
6.2	Jurisdiction
---	---
The provisions of clause 31 (Law and jurisdiction) of the Facility Agreement shall apply to this Agreement as if they were expressly incorporated herein with any necessary modifications.
---

Please confirm your agreement to the terms of this Agreement by signing where indicated below. Yours faithfully

/s/ Aikaterini Sarri

/s/ Andreas Mitsiopoulos

………………………………

Duly authorised on behalf of

NATIONAL BANK OF GREECE S.A. as Lender

We hereby acknowledge receipt of the above Agreement and confirm our agreement to its terms.

THE BORROWERS ****

SIGNED	)
by	) /s/ Stefania Karmiri
duly authorised for and on behalf of	)
LIGHT SHIPPING LTD	) ……………………………
	Attorney-in-fact
SIGNED	)
by	)
duly authorised for and on behalf of	) /s/ Stefania Karmiri
GOOD HEART SHIPPING LTD	) ……………………………
	Attorney-in-fact
THE GUARANTOR ****
SIGNED	)
by	)
duly authorised for and on behalf of	) /s/ Stefania Karmiri
EURODRY LTD.	) ……………………………
	Attorney-in-fact

Date: __4 July______________ 2023

SCHEDULE 1

PART 1

OPERATIVE PROVISIONS

1.	RATE SWITCH
1.1	Switch to Term Reference Rate
---	---
Subject to Paragraph 1.2 (Delayed switch for existing LIBOR Loans) below, on and from the Rate Switch Date:
---
(a)	the use of the Term Reference Rate will replace the use of LIBOR for the calculation of interest for any Loan or Unpaid Sum; and
---	---
(b)	any Loan or Unpaid Sum shall be a Term SOFR Loan and Paragraph 2.1 (Calculation of interest –Term SOFR Loans) below shall apply to such Loan or Unpaid Sum.
---	---
1.2	Delayed switch for existing LIBOR Loans
---	---
If the Rate Switch Date falls before the last day of an Interest Period for a LIBOR Loan:
---
(a)	that Loan or Unpaid Sum (as applicable) shall continue to be a LIBOR Loan for that Interest Period and the clause headed Calculation of interest in the Facility Agreement (or, in the absence of such clause, any provision in the Facility Agreement setting out the rate of interest on a LIBOR Loan) shall continue to apply to such Loan or Unpaid Sum (as applicable) for that Interest Period;
---	---
(b)	any provision of this Part 1 which is expressed to relate solely to a Term SOFR Loan shall not apply in relation to such Loan or Unpaid Sum (as applicable) for that Interest Period; and
---	---
(c)	on and from the first day of the next Interest Period (if any) for such Loan or Unpaid Sum (as applicable):
---	---
(i)	such Loan or Unpaid Sum (as applicable) shall be a Term SOFR Loan; and
---	---

(ii)	Paragraph 2.1 (Calculation of interest –Term SOFR Loans) below shall apply to it.
1.3	Optional Switch to Compounded Reference Rate
---	---
(a)	Subject to Paragraph 1.4 (Delayed switch for existing Term SOFR Loans) and provided that the Lender has notified the Borrower that offers the Compounded Reference Rate), the Borrower may elect to switch the basis on which interest is calculated on the Loan from the Term Reference Rate to the Compounded Reference Rate by giving the Lender not less than 60 days' notice in writing specifying the date (which must be the first day of an Interest Period) on which they wish the switch to occur (the Second Rate Switch Date), and on and from the Second Rate Switch Date:
---	---
(i)	use of the Compounded Reference Rate will replace the use of the Term Reference Rate for the calculation of interest for all Loans and any Unpaid Sum; and
---	---
(ii)	all Loans and any Unpaid Sum shall be a Compounded Rate Loan and Paragraph 2.2 (Calculation of interest –Compounded Rate Loans) shall apply to such Loan or Unpaid Sum.
---	---
(b)	The Borrower will be permitted to exercise the option pursuant to this Paragraph 1.3 on one occasion only.
---	---
1.4	Delayed switch for existing Term SOFR Loans
---	---
If the Second Rate Switch Date falls before the last day of an Interest Period for a Term SOFR Loan:
---
(a)	that Loan or Unpaid Sum (as applicable) shall continue to be a Term SOFR Loan for that Interest Period and Paragraph 2.1 (Calculation of interest –Term SOFR Loans) below shall apply to it for that Interest Period;
---	---
(b)	any provision of this Part 1 which is expressed to relate solely to a Compounded Rate Loan shall not apply in relation to such Loan or Unpaid Sum (as applicable) for that Interest Period; and
---	---
(c)	on and from the first day of the next Interest Period (if any) for such Loan or Unpaid Sum (as applicable):
---	---
(i)	such Loan or Unpaid Sum (as applicable) shall be a Compounded Rate Loan; and
---	---
(ii)	Paragraph 2.2 (Calculation of interest –Compounded Rate Loans) below shall apply to it.
---	---
2.	INTEREST
---	---

2.1	Calculation of interest –Term SOFR Loans
The rate of interest on each Term SOFR Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of the applicable:
---
(a)	Margin;^^
---	---
(b)	Term Reference Rate for that day; and
---	---
(c)	Credit Adjustment Spread.
---	---
2.2	Calculation of interest –Compounded Rate Loans
---	---
(a)	The rate of interest on each Compounded Rate Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of the applicable:
---	---
(i)	Margin;^^
---	---
(ii)	Compounded Reference Rate for that day; and
---	---
(iii)	Credit Adjustment Spread.
---	---
(b)	If any day during an Interest Period for a Compounded Rate Loan is not a RFR Banking Day, the rate of interest on that Compounded Rate Loan for that day will be the rate applicable to the immediately preceding RFR Banking Day.
---	---
2.3	Payment of interest
---	---
The Borrower shall pay accrued interest on the Loan or any part of the Loan on the earlier of the date falling on the last day of each Interest Period and the next Repayment Date.
---
2.4	Notifications
---	---
(a)	The Lender shall promptly notify the Borrower of the determination of a rate of interest relating to a Term SOFR Loan.
---	---
(b)	The Lender shall promptly upon a Compounded Rate Interest Payment being determinable, notify the Borrower of:
---	---
(i)	the Compounded Rate Interest Payment;
---	---
(ii)	the applicable rate of interest relating to the determination of that Compounded Rate Interest Payment; and
---	---
(iii)	to the extent it is then determinable, of the Compounded Market Disruption Rate (if any) relating to the relevant Compounded Rate Loan.
---	---

This sub-paragraph (b) shall not apply to any Compounded Rate Interest Payment determined pursuant to Paragraph 4.4 (Cost of funds) below.
(c)	The Lender shall promptly notify the Borrower of the determination of a rate of interest relating to a Compounded Rate Loan to which Paragraph 4.4 (Cost of funds) below applies.
---	---
(d)	This Paragraph 2.4 (Notifications) shall not require the Lender to make any notification to any party to the Facility Agreement on a day which is not a Business Day.
---	---
3.	INTEREST PERIODS
---	---
3.1	Selection of Interest Periods for a Term SOFR Loan or a Compounded Rate Loan
---	---
(a)	The Borrower may select an Interest Period:
---	---
(i)	for a Term SOFR Loan, a period of 1 or 3 months; and
---	---
(ii)	for a Compounded Rate Loan, any period specified in the Benchmark Terms.
---	---
(b)	If the Borrower fails to select an Interest Period in accordance with the Facility Agreement or the Facility Agreement does not provide for selection of Interest Periods by the Borrower, the relevant Interest Period will be:
---	---
(i)	for a Term SOFR Loan, a period of 1 or 3 months or such other period as the Lender may specify; and
---	---
(ii)	for a Compounded Rate Loan, the period specified in the Benchmark Terms as the Interest Period in absence of selection.
---	---
(c)	Sub-paragraph (a) and (b) above are subject to any provision in the Facility Agreement allowing the Borrower or the Lender to shorten an Interest Period for any Loan.
---	---
(d)	No Interest Period shall be longer than:
---	---
(i)	12 Months, for a LIBOR Loan;
---	---
(ii)	3 Months for a Term SOFR Loan or a Compounded Rate Loan.
---	---
3.2	Non-Business Days (Compounded Rate Loans)
---	---
In respect of a Compounded Rate Loan:
---
(a)	other than where sub-paragraph (b) below applies, if an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not); and
---	---

(b)	if there are rules specified as Business Day Conventions in the Benchmark Terms, those rules shall apply to each Interest Period for that Compounded Rate Loan.
4.	CHANGES TO THE CALCULATION OF INTEREST
---	---
4.1	Unavailability of Term SOFR
---	---
(a)	Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of a Term SOFR Loan, the applicable Term Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan.
---	---
(b)	Historic Term SOFR: If no Term SOFR is available for the Interest Period of a Term SOFR Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Term Reference Rate shall be the Historic Term SOFR for that Term SOFR Loan.
---	---
(c)	Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of a Term SOFR Loan, the applicable Term Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan.
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(d)	Cost of funds: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, Paragraph 4.4 (Cost of funds) below shall apply to that Term SOFR Loan for that Interest Period.
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4.2	Interest calculation if no RFR
---	---
If:
---
(a)	there is no applicable RFR for the purposes of calculating the Cumulative Compounded RFR Rate for an RFR Banking Day during an Interest Period for a Compounded Rate Loan; and
---	---
(b)	Cost of funds will apply as a fallback is specified in the Benchmark Terms,
---	---

Paragraph 4.4 (Cost of funds) below shall apply to that Compounded Rate Loan for that Interest Period.

4.3	Market disruption
(a)	In the case of a Term SOFR Loan, if, before close of business in Athens on the Term SOFR Quotation Day, the Lender determines (in its sole discretion) that its cost of funds relating to its participation in that Term SOFR Loan would be in excess of the Term Market Disruption Rate then Paragraph 4.4 (Cost of funds) below shall apply to that Term SOFR Loan for the relevant Interest Period.
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(b)	In the case of a Compounded Rate Loan, if:
(i)	a Market Disruption Rate is specified in the Benchmark Terms; and
---	---
(ii)	before the Reporting Time for that Compounded Rate Loan, the Lender determines (in its sole discretion) that its cost of funds relating to its participation in that Compounded Rate Loan would be in excess of that Market Disruption Rate,
---	---
then Paragraph 4.4 (Cost of funds) below shall apply to that Compounded Rate Loan for the relevant Interest Period.
---
4.4	Cost of funds
---	---
(a)	If this Paragraph 4.4 (Cost of funds) applies to a Term SOFR Loan or a Compounded Rate Loan for an Interest Period, neither Paragraph 2.1 (Calculation of interest –Term SOFR Loans) nor Paragraph 2.2 (Calculation of interest –Compounded Rate Loans)
---	---
above shall apply to that Term SOFR Loan or that Compounded Rate Loan (as the case may be) for that Interest Period and the rate of interest on that Term SOFR Loan or that Compounded Rate Loan (as the case may be) for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
---
(i)	the Margin; and
---	---
(ii)	the rate which expresses as a percentage rate per annum the Lender's cost of funds relating to its participation in that Term SOFR Loan or that Compounded Rate Loan (as the case may be).
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(b)	If this Paragraph 4.4 (Cost of funds) applies and the Lender or the Borrower so require, the Lender and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
---	---
(c)	Any substitute or alternative basis agreed pursuant to paragraph (b) above shall be binding on all parties to the Facility Agreement.
---	---
(d)	If paragraph (e) below does not apply and any rate determined under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
---	---
(e)	If this Paragraph 4.4 (Cost of funds) applies pursuant to Paragraph 4.3 (Market disruption) and:
---	---

(i)	in relation to a Term SOFR Loan:
(A)	the Lender's Funding Rate is less than the relevant Term Market Disruption Rate; or
---	---
(B)	the Lender does not determine (in its sole discretion) a rate by the time specified in sub-paragraph (ii) of paragraph (a) above,
	the Lender's cost of funds relating to its participation in the relevant Term SOFR Loan for that Interest Period shall be deemed, for the purposes of subparagraph (ii) of paragraph (a) above, to be the Term Market Disruption Rate for that Term SOFR Loan;
---	---
(ii)	in relation to a Compounded Rate Loan:
(A)	the Lender's Funding Rate is less than the relevant Compounded Market Disruption Rate; or
---	---
(B)	the Lender does not determine (in its sole discretion) a rate by the time specified in sub-paragraph (ii) of paragraph (a) above,
the Lender's cost of funds relating to its participation in the relevant Compounded Rate Loan for that Interest Period shall be deemed, for the purposes of sub-paragraph (ii) of paragraph (a) above, to be the Compounded Market Disruption Rate for that Compounded Rate Loan.
---
(f)	If this Paragraph 4.4 (Cost of funds) applies, the Lender shall, as soon as practicable, notify the Borrower.
---	---
4.5	Break Costs
---	---
(a)	Subject to paragraph (b) below, the Borrower shall, within 3 Business Days of demand by the Lender, pay to the Lender its Break Costs (if any) attributable to all or any part of a Term SOFR Loan or a Compounded Rate Loan being paid by the Borrower on a
---	---
day prior to the last day of an Interest Period for that Term SOFR Loan or that Compounded Rate Loan.
---
(b)	Paragraph (a) above shall apply in respect of a Compounded Rate Loan if an amount is specified as Break Costs in the Benchmark Terms.
---	---
5.	VOLUNTARY PREPAYMENTS OF ANY COMPOUNDED RATE LOAN
---	---
Any voluntary prepayment of any Loan (in whole or in part) permitted by the Facility Agreement may, in the case of a Compounded Rate Loan, only be made if the Borrower gives the Lender not less than 10 RFR Banking Days' (or such shorter period as the Lender may agree) prior notice.
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6.	DAY COUNT CONVENTION AND INTEREST CALCULATION
---	---

6.1	Any interest, commission or fee accruing under a Finance Document in respect of a Term SOFR Loan or a Compounded Rate Loan will accrue from day to day and the amount of any such interest, commission or fee is calculated:
(a)	on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice; and
---	---
(b)	subject to sub-paragraph 6.2 below, without rounding.
---	---
6.2	The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by an Obligor under a Finance Document shall be rounded to 2 decimal places.
---	---
7.	RETENTION ACCOUNTS
---	---

If the Loan is a Compounded Rate Loan, the amount in respect of interest to paid to any Retention Account shall be paid as follows in respect of each Interest Period in excess of one Month:

(a) such amount shall be paid each Month (and shall be applied against the interest required to be paid at the end of the relevant Interest Period) and be:

(i)	calculated based on the amount which had been paid in the previous Interest Period; and
(ii)	cleared by the Lender within reasonable time following relevant notice to the Borrower.
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(b)	If the amount paid, under this Paragraph 7 is in excess of the amount of interest required to be paid at the end of the relevant Interest Period, the relevant excess amount shall be retained in the Retention Account and such amount shall be calculated against the interest in respect of the next Interest Period.
---	---
(c)	If this Paragraph 7 applies, the Borrower and the Lender shall agree in good faith discussions, the amount of Interest to be paid for the first Interest Period for such Compounded Rate Loan.
---	---
(d)	The Borrower irrevocably authorises the Lender to make the transfers required under this Paragraph 7 (or, if applicable, to instruct the relevant account holder to make such transfers) if the Borrower fails to effect such transfers within 15 days from the date they are required to be made under this Paragraph 7.
---	---
8.	MISCELLANEOUS
---	---
8.1	Any Compounded Rate Supplement and any Compounding Methodology Supplement shall be a Finance Document.
---	---
8.2	After the Rate Switch Date, any reference in the Amended Facility Agreement to the London Interbank Market shall be deemed to be to the Relevant Market.
---	---

PART 2

General Definitions and Construction

1.	Definitions

In this Agreement:

Additional Business Day means any day specified as such in the Benchmark Terms.

Benchmark Terms means the terms set out in Part 3 (Benchmark Terms) of this Schedule 1 or in any Compounded Rate Supplement.

Break Costs means:

(a)	in respect of any Term SOFR Loan the amount (if any) by which:
(i)	the interest which the Lender should have received for the period from the date of receipt of all or any part of its participation in the relevant Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; exceeds
---	---
(ii)	the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period; and
---	---
(b)	in respect of any Compounded Rate Loan, any amount specified as such in the Benchmark Terms.
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Business Day means:

(a)
(i)	if the Facility Agreement contains a definition of Business Day, any day falling within that definition; or
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(ii)	if the Facility Agreement does not contain a definition of Business Day, a day (other than a Saturday or a Sunday) on which banks are open for general business in London, Athens and Piraeus and in respect of a day on which a payment is required to be made in Dollars under a Finance Document, also in New York City; and
---	---
(b)	in addition, in relation to:
---	---
(i)	the fixing of an interest rate for a Term SOFR Loan;
---	---
(ii)	any date for payment of an amount relating to a Compounded Rate Loan; or
---	---
(iii)	the determination of the first day or the last day of an Interest Period for a Compounded Rate Loan or otherwise in relation to the determination of the length of or rate for such an Interest Period,
---	---

which is an Additional Business Day relating to that Term SOFR Loan or Compounded Rate Loan (as the case may be).

Compounded Market Disruption Rate means the rate specified as such in the Benchmark Terms.

Compounded Rate Interest Payment means the aggregate amount of interest that:

(a)	is, or is scheduled to become, payable under any Finance Document; and
(b)	relates to a Compounded Rate Loan.
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Compounded Rate Loan means the Loan, or, if applicable, Unpaid Sum which is, or becomes, a Compounded Rate Loan pursuant to Paragraph 1.3 (Optional Switch to Compounded Reference Rate) of Part 1 (Operative Provisions) of this Schedule 1.

Compounded Rate Supplement means a document which:

(a)	is agreed in writing by the Borrower and the Lender;
(b)	specifies the relevant terms which are expressed in this Agreement to be determined by reference to Benchmark Terms; and
---	---
(c)	has been made available to the Borrower and the Lender.
---	---

Compounded Reference Rate means, in relation to any RFR Banking Day during the Interest Period of a Compounded Rate Loan, the percentage rate per annum which is the aggregate of:

(a)	the Cumulative Compounded RFR Rate for that RFR Banking Day; and
(b)	the applicable Credit Adjustment Spread, provided that, if any such rate is below zero, such rate will be deemed to be zero.
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Compounding Methodology Supplement means, in relation to the Cumulative Compounded RFR Rate, a document which:

(a)	is agreed in writing by the Borrower and the Lender;
(b)	specifies a calculation methodology for that rate; and
---	---
(c)	has been made available to the Borrower and the Lender.
---	---

Credit Adjustment Spread means, in respect of any Term SOFR Loan or Compounded Rate Loan, any rate which is specified as such in the Benchmark Terms.

Cumulative Compounded RFR Rate means, in relation to an Interest Period for a Compounded Rate Loan, the percentage rate per annum determined by the Lender (in its sole discretion) in accordance with the methodology set out in Part 4 (Cumulative Compounded RFR Rate) of this Schedule 1 or in any relevant Compounding Methodology Supplement.

Daily Rate means the rate specified as such in the Benchmark Terms.

Dollars and $ mean the lawful currency for the time being of the United States of America.

Finance Document means:

(a)	if the Facility Agreement contains a definition of "Finance Document", any document falling within that definition; or
(b)	if the Facility Agreement does not contain a definition of "Finance Document":
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(i)	the Facility Agreement;
---	---
(ii)	any mandate letter or fee letter entered into in relation to the Facility Agreement;
---	---
(iii)	any document under which any guarantee, Security or other assurance against loss is provided in relation to amounts owing under the Facility Agreement or any other Finance Document;
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(iv)	any document under which any Obligor becomes a party to the Facility Agreement or ceases to be a party to the Facility Agreement;
---	---
(v)	any master agreement, confirmation, schedule or other agreement entered into by an Obligor for the purpose of hedging interest payable under the Facility Agreement;
---	---
(vi)	any document expressing any intercreditor arrangement, priority arrangement in relation to Security or any similar agreement between the Lender and any creditors of an Obligor;
---	---
(vii)	this Agreement; and
---	---
(viii)	any other document designated as a "Finance Document" by the Lender and the Borrower;
---	---
(c)	any Benchmark Terms Supplement; and
---	---
(d)	any Compounding Methodology Supplement.
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Funding Rate means, in relation to any Term SOFR Loan or a Compounded Rate Loan, any individual rate determined by the Lender (in its sole discretion) pursuant to sub-paragraph (a)(ii) of Paragraph 4.4 (Cost of funds) of Part 1 (Operative Provisions) of this Schedule 1.

Historic Term SOFR means, in relation to any Term SOFR Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan and which is as of a day which is no more than 3 Additional Business Days before the Term SOFR Quotation Day.

Interest Period means, in relation to any Term SOFR Loan or a Compounded Rate Loan, the period determined pursuant to Paragraph 3 (Interest Periods) of Part 1 (Operative Provisions) of this Schedule 1.

Interpolated Historic Term SOFR means, in relation to any Term SOFR Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	the most recent applicable Term SOFR (as of a day which is not more than 3 Additional Business Days before the Term SOFR Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of that Term SOFR Loan; or
---	---
(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of that Term SOFR Loan, the most recent RFR for a day which is no more than 5 Additional Business Days (and no less than 3 Additional Business Days) before the Term SOFR Quotation Day; and
---	---
(b)	the most recent applicable Term SOFR (as of a day which is not more than 3 Additional Business Days before the Term SOFR Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of that Term SOFR Loan.
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Interpolated Term SOFR means, in relation to any Term SOFR Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	the applicable Term SOFR (as of the Term SOFR Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of that Term SOFR Loan; or
---	---
(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of that Term SOFR Loan, the RFR for the day which is 3 Additional Business Days before the Term SOFR Quotation Day; and
---	---
(b)	the applicable Term SOFR (as of the Term SOFR Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of that Term SOFR Loan.
---	---

Lender means

(a)	if the Facility Agreement contains a definition of Lender or Bank the meaning given to that term in that definition (as applicable); or
(b)	if the Facility Agreement does not contain a definition of Lender or Bank, any person who has participated in a Loan.
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LIBOR Loan means a Loan or, if applicable, Unpaid Sum which is not a Term SOFR Loan or a Compounded Rate Loan.

Loan means any amount borrowed and outstanding under the Finance Documents whether defined in the Facility Agreement as a Loan, part of the Loan, an Advance, a Tranche or a Drawing.

Lookback Period means the number of days specified as such in the Benchmark Terms.

Margin

(a)	has, if the Facility Agreement contains a definition of Margin, the meaning given to it in that definition; or
(b)	if the Facility Agreement does not contain a definition of Margin, means any margin, spread, or any other amount which, prior to the Rate Switch Date, was added to LIBOR to calculate any interest or other amount under the Facility Agreement.
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Market Disruption Rate means the rate specified as such in the Benchmark Terms.

Month means, in relation to an Interest Period for a Compounded Rate Loan (as the case may be) (or any other period for the accrual of commission or fees at a time when interest under this Agreement is being calculated pursuant to Paragraph 2.2 (Calculation of interest – Compounded Rate Loans)), a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, subject to adjustment in accordance with the rules specified as Business Day Conventions in the Benchmark Terms.

Rate Switch Date means 30 June 2023 or any other date agreed as such between the Lender and the Borrower.

Relevant Market means the market specified as such in the Benchmark Terms.

Reporting Day means the day specified as such in the Benchmark Terms.

Reporting Time means the relevant time (if any) specified as such in the Benchmark Terms.

Retention Account has, if the Finance Documents contain a definition of "Retention Account", the meaning given to that term in that definition (as applicable).

RFR means the rate specified as such in the Benchmark Terms.

RFR Banking Day means any day specified as such in the Benchmark Terms.

Second Rate Switch Date has the meaning given to it in Paragraph 1.3 (Optional Switch to Compounded Reference Rate) of Part 1 (Operative Provisions) of this Schedule 1.

Secured Liabilities

(a)	has, if the Finance Documents contain a definition of "Secured Liabilities" or "Secured Obligations", the meaning given to that term in that definition (as applicable); or
(b)	if the Finance Documents do not contain a definition of "Secured Liabilities" or "Secured Obligations", means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of the security providers or the Obligors (as the case may be) to the Lender under or in connection with the Finance Documents.
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Security

(a)	has, if the Facility Agreement contains a definition of "Security" or "Security Interest", the meaning given to that term in that definition (as applicable); or
(b)	if the Facility Agreement does not contain a definition of "Security" or "Security Interest", means any mortgage, charge, pledge, lien or other security interest (in any jurisdiction) which secures any obligation of any person, or any other agreement or arrangement having a similar effect.
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Term Market Disruption Rate means the percentage rate per annum which is the aggregate of the Term Reference Rate and the applicable Credit Adjustment Spread.

Term Reference Rate means, in relation to any Term SOFR Loan:

(a)	the applicable Term SOFR as of the Term SOFR Quotation Day and for a period equal in length to the Interest Period of that Term SOFR Loan; or
(b)	as otherwise determined pursuant to Paragraph 4.1 (Unavailability of Term SOFR) of Part 1 (Operative Provisions) of this Schedule 1,
---	---

and if, in either case, the aggregate of that rate and the applicable Credit Adjustment Spread is less than zero, the Term Reference Rate shall be deemed to be such a rate that the aggregate of the Term Reference Rate and the applicable Credit Adjustment Spread is zero.

Term SOFR means the Term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).

Term SOFR Loan means any Loan or, if applicable, Unpaid Sum which is, or becomes, a Term SOFR Loan pursuant to Paragraph 1 (Rate Switch) of Part 1 (Operative Provisions) of this Schedule 1 and has not a Compounded Rate Loan pursuant to Paragraph 1.3 (Optional Switch to Compounded Reference Rate) of Part 1 (Operative Provisions) of this Schedule 1.

Term SOFR Quotation Day means, in relation to any period for which an interest rate is to be determined in respect of a Term SOFR Loan, 2 Additional Business Days before the first day of that period (unless market practice differs in the relevant syndicated loan market, in which case the Term SOFR Quotation Day will be determined by the Lender (in its sole discretion) in accordance with that market practice (and if quotations would normally be given on more than one day, the Term SOFR Quotation Day will be the last of those days)).

Unpaid Sum:

(a)	has, if the Facility Agreement contains a definition of Unpaid Sum, the meaning given to it in that definition; or

(b)	if the Facility Agreement does not contain a definition of Unpaid Sum, means any sum due and payable but unpaid by an Obligor under the Finance Documents, howsoever defined (if at all).
2.	Construction
---	---
(a)	Unless a contrary indication appears, a reference in this Agreement to:
---	---
(i)	a 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;
---	---
(ii)	a provision of law is a reference to that provision as amended or re-enacted from time to time;
---	---
(iii)	the Lender's cost of funds in relation to any Term SOFR Loan or any Compounded Rate Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in that Term SOFR Loan or that Compounded Rate Loan (as the case may be) for a period equal in length to the Interest Period of that Term SOFR Loan or that Compounded Rate Loan (as the case may be); and
---	---
(iv)	a page or screen of an information service displaying a rate shall include:
---	---
(A)	any replacement page of that information service which displays that rate; and
---	---
(B)	the appropriate page of such other information service which displays that rate from time to time in place of that information service,
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Lender after consultation with the Borrower.
(b)	Any Compounded Rate Supplement overrides anything in:
---	---
(i)	Part 3 (Benchmark Terms) of this Schedule 1; or
---	---
(ii)	any earlier Compounded Rate Supplement.
(c)	A Compounding Methodology Supplement relating to the Cumulative Compounded RFR Rate overrides anything relating to that rate in:
---	---
(i)	Part 4 (Cumulative Compounded RFR Rate) of this Schedule 1, as the case may be; or
---	---
(ii)	any earlier Compounding Methodology Supplement.
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PART 3

Benchmark Terms

Cost of funds as a fallback<br><br> <br><br><br> <br>Definitions	Cost of funds will apply as a fallback.
Additional Business Days:	An RFR Banking Day.
Break Costs:	Any cost or amount which is incurred or suffered by the Lender (as reasonably determined by it) to the extent that it is attributable to a payment by the Borrower to the Lender of any amount of principal due or which would have become due under this Agreement prior to the date upon which such amount should have been repaid in accordance with the terms and conditions of this Agreement.
Business Day Conventions (definition of "Month" and Paragraph 3.2 ( NonBusiness Days ) of Part 1 (Operative Provisions) of this Schedule 1:	(a)	If any period is expressed to accrue by reference to a Month or any number of Months then, in respect of the last Month of that period:
		(i)	subject to sub-paragraph (iii) below, if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
		(ii)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

Length Period of Interest	Credit Adjustment Spread for Dollars
1 Month	0.11448%
3 Months	0.26161%
	(iii)	if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
---	---	---
(b)	If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

Credit Adjustment Sprea

Daily Rate:	The Daily Rate for any RFR Banking Day is the RFR for that RFR Banking Day rounded to 4 decimal places and if that rate is less than zero, the Daily Rate shall be deemed to be such a rate that is zero.
Lookback Period:	5 RFR Banking Days.

Market Disruption Rate:	The percentage rate per annum which is the aggregate of:<br><br> <br><br><br> <br>(a) the Cumulative Compounded RFR Rate for the Interest Period of the relevant Compounded Rate Loan; and<br><br> <br><br><br> <br>(b) the applicable Credit Adjustment Spread.
Relevant Market:	The market for overnight cash borrowing collateralised by US Government securities.
Reporting Day: Interest Periods	The Business Day which follows the day which is the Lookback Period prior to the last day of the Interest Period.
Length of Interest Period in absence of selection	1 or 3 months or such other period as the Lender may specify.
Periods capable of selection as	1 or 3 months.

Interest Periods

Reporting Times

Deadline for Lender to report market disruption in accordance with Paragraph 4.3 (Market disruption) of Part 1 (Operative Provisions) of this Schedule 1	Close of business in London on the Reporting Day for the relevant Compounded Rate Loan.
Deadline for Lender to report its cost of in accordance with Paragraph 4.4 (Cost of funds) of Part 1 (Operative Provisions) of this Schedule 1	Close of business on the date falling 3 Business Days funds after the Reporting Day for the relevant Compounded Rate Loan (or, if earlier, on the date falling 3 Business Days before the date on which interest is due to be paid in respect of the Interest Period for that Compounded Rate Loan).
RFR:	The secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).

RFR Banking Day:

Any day other than: (a) a Saturday or Sunday; and (b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States Government securities, and if needed, RFR Contingency Period.

RFR Contingency Period:

10 RFR Banking Days.

PART 4

Cumulative Compounded RFR Rate

BASIC ASSUMPTIONS

1	For every non RFR Banking Day, the Compounded RFR Rate for the previous RFR Banking Day is applicable.
2	Interest due is calculated on the basis of actual number of days elapsed and a year of 360 days. ADDITIONAL DEFINITION
---	---

Cumulation Period means every calendar day of the period commencing five (5) RFR Banking Days before the beginning of any Interest Period and ending 5 RFR Banking Days before the termination of such Interest Period.

CALCULATION METHOD

The Annualized Cumulative Compounded Daily Rate for every Interest Period is calculated as follows:

Where:

ncd means the number of calendar days in a Cumulation Period i.e. including the first day of the Cumulation Period but excluding the last one. ****

Daily Rate i means for every calendar day of the Cumulation Period, the Daily Rate of the RFR Banking Day. ****

means the product of the rates arising out of the calculation of the parenthesis of the aforementioned mathematical formula for every calendar day of the Cumulation Period, i.e. including the first day of the Cumulation Period but excluding the last one.

SCHEDULE 2

Conditions precedent

1.	Corporate documentation
(a)	A copy of the constitutional documents of each Obligor.
---	---
(b)	A certificate of good standing for each Obligor or other evidence that each Obligor is in good standing in its country of incorporation.
---	---
(c)	A copy of a resolution of the board of directors of each Obligor and, to the extent required in connection with any legal opinion mentioned below, its shareholders:
---	---
(i)	approving the terms of, and the transactions contemplated by, this Agreement and, where appropriate, the Supplementary Mortgage Documentation and resolving that it executes this Agreement and, where appropriate, the Supplementary Mortgage Documentation;
---	---
(ii)	authorising a specified person or persons to execute this Agreement and, where appropriate, the Supplementary Mortgage Documentation on its behalf; and
---	---
(iii)	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under, or in connection with, this Agreement and, where appropriate, the Supplementary Mortgage Documentation.
---	---
(d)	The original of any power of attorney issued by an Obligor in favour of any person or persons executing this Agreement and, where appropriate, the Supplementary Mortgage Documentation.
---	---
2.	Finance Documents
---	---
(a)	A duly executed original of this Agreement.
---	---
(b)	Duly executed original(s) of the Supplementary Mortgage Documentation together with documentary evidence that the Supplementary Mortgage Documentation has been duly recorded as a valid mortgage addendum against "GOOD HEART" in accordance with the laws of Liberia.
---	---
(c)	A letter of confirmation from each security party that has executed a Finance Document providing Security.
---	---
3.	Legal Opinions
---	---
	Legal opinions of the legal advisers to the Lender in the jurisdictions of:
(a)	Holman Fenwick Willan LLP concerning such matters of English law as the Lender may require;
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(b)	Campbells concerning such matters of the Republic of Liberia and the Republic of Marshall Islands law as the Lender may require; and
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(c)	such other lawyers appointed by the Lender concerning the laws of such other relevant jurisdictions as the Lender may require.
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HTML Editor

EXHIBIT 4.21

Private and Confidential

Date __12__ July 2023

BLESSED LUCK SHIPOWNERS LTD (1)

as Borrower

and -

PIRAEUS BANK S.A. (2)

as Lender

_____________________________________________________

SUPPLEMENTAL AGREEMENT

_____________________________________________________

in relation to a Loan Agreement

dated 12 August 2021

PIRAEUS

Index

Clause	Page No.
1. INTERPRETATION	1
2. AGREEMENT OF THE LENDER	2
3. CONDITIONS PRECEDENT	2
4. REPRESENTATIONS AND WARRANTIES	4
5. AMENDMENTS TO LOAN AGREEMENT AND OTHER SECURITY DOCUMENTS	4
6. FURTHER ASSURANCES	13
7. FEES AND EXPENSES	14
8. NOTICES	14
9. SUPPLEMENTAL	14
10. LAW AND JURISDICTION	15

THIS AGREEMENT is made on __12__ July 2023

BETWEEN

(1)	BLESSED LUCK SHIPOWNERS LTD a corporation incorporated in the Republic of Liberia whose registered address is at 80 Broad Street, Monrovia, Liberia with registration number C-123141, ** as borrower as borrower (the “Borrower**”); and
(2)	PIRAEUS BANK S.A having its registered office at 4 Amerikis Street, 105 64 Athens, Greece with corporate registration number (GCR NO) 157660660000, acting through its branch at 170 Alexandras Ave., 115 21 Athens, Greece, ** as lender (the “Lender”). **
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BACKGROUND

(A)	By a loan agreement dated 12 August 2021 (as may be amended and/or supplemented from time to time, the “Loan Agreement”) and made between (1) the Borrower, as borrower, and (2) the Lender as lender, the Borrower received a term loan facility of (originally) up to USD8,000,000 upon the terms and for the purposes therein specified. The principal amount of the Loan outstanding as at the date of this Deed is USD4,250,000.
(B)	The Borrower has requested that the Lender gives its consent to:
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(i)	the amendment of the interest rate determination provisions in respect of the Loan; and
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(ii)	the Borrower opening a Pledged Deposit Account (as defined hereinafter) with the Lender to reduce the amount of the Margin applicable to a part of the Loan equivalent to the aggregate of deposits held in the Pledged Deposit Account.
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(C)	This Agreement sets out the terms and conditions on which the Lender agrees, with effect on and from the Effective Date or the Rate Switch Date (as the case may be) (each term as hereinafter defined), to the requests of the Borrower set out in Recital (B) and to the consequential amendments to the Loan Agreement and the other Security Documents.
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IT IS AGREED as follows:

1.	INTERPRETATION
1.1	Defined expressions. Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires.
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1.2	Definitions.In this Agreement, unless the contrary intention appears:
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“Effective Date” means the date on which the Lender confirms to the Borrower that all the conditions precedent referred to in Clause 3.1 (Conditions Precedent) have been fulfilled by the Borrower or waived by the Lender and which in any event shall be no later than 13 July 2023;

“Loan Agreement” means the loan agreement dated 12 August 2021 (as may be amended and/or supplemented from time to time) referred to in Recital (A);

“Mortgage Addendum” means an addendum to the first preferred Liberian mortgage over the Vessel dated 13 August 2021, required to be executed hereunder by the Borrower, to be in such form as the Lender may require in its sole discretion;

“Pledged Deposit Account” **** means an interest-bearing USD current account opened by the Borrower with the Lender and includes any sub-accounts thereof and any other account designated in writing by the Lender to be a Pledged Deposit Account for the purposes of this Agreement, and in the plural means all of them;

“Pledged Deposit Account Pledge” **** means a first priority charge required to be executed hereunder between the Borrower and the Lender in respect of the relevant Pledged Deposit Account in such form as the Lender may require; and

“Rate Switch Date” means the first day of the Interest Period in respect of the Loan fixed after the Effective Day (or any such other date as the Lender and the Borrower may agree but which shall, in no event, be later than the end of the first Interest Period falling due after 30 June 2023).

1.3	Application of construction and Interpretation provisions of Loan Agreement.Clauses 1.2 to 1.6 (inclusive) of the Loan Agreement apply, with any necessary modifications, to this Agreement.
2.	AGREEMENT OF THE LENDER
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2.1	Agreement of the Lender. The consent of the Lender to amend the Loan Agreement in accordance with Clause 5 is conditional upon:
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2.1.1	the Lender having received the documents and evidence specified in Clause 3.1 in form and substance satisfactory to the Lender;
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2.1.2	the representations and warranties contained in Clause 4 being then true and correct as if each was made with respect to the facts and circumstances existing at such time; and
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2.1.3	no Event of Default has occurred or will arise following the amendment of the Loan Agreement pursuant to this Agreement.
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2.2	Effective Date.The agreement of the Lender contained in Clause 2.1 shall have effect on and from the Effective Date.
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3.	CONDITIONS PRECEDENT
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3.1	Conditions Precedent. The conditions referred to in Clause 2.1 are that the Lender shall have received the following documents:
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3.1.1	certified copies of goodstanding certificates for each Obligor;
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3.1.2	Corporate authorities
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(a)	a list of directors and officers of the Borrower specifying the names and positions of such persons, certified by an officer of the Borrower to be true, complete and up to date;
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(b)	originals of resolutions of the directors and shareholders of the Borrower approving this Agreement and the Mortgage Addendum and authorising the execution and delivery hereof and thereof and performance of the Borrower’s obligations hereunder and thereunder, additionally certified by an officer of the Borrower as having been duly adopted by the directors and shareholders the Borrower and not having been amended, modified or revoked and being in full force and effect;
(c)	an original or a certified copy of any power of attorney issued by the Borrower pursuant to such resolutions; and
---	---
(d)	an original certificate, duly executed and legalised from a duly authorised officer of each Obligor (other than the Borrower) (a) confirming that none of the constitutional documents and corporate authorities delivered to the Lender pursuant to the terms and conditions of the Loan Agreement have been amended or modified in any way since the date of their delivery to the Lender and that these (as applicable) remain in full force and effect and (b) listing its up to date directors, officers and shareholders;
---	---
3.1.3	Mortgage Addendum and registration
---	---

the Mortgage Addendum duly executed and delivered and duly registered against the Vessel in accordance with the laws of Liberia;

3.1.4	Pledged Deposit Account Pledge

the Pledged Deposit Account Pledge duly executed and delivered, together with the process agent letter duly executed and delivered under the Pledged Deposit Account Pledge;

3.1.5	Further documents

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 Agreement, the Mortgage Addendum (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Lender deems appropriate;

3.1.6	Laws of Liberia: opinion

an opinion of Messrs Ince & Co, special legal advisers to the Lender in respect of the laws of the Republic of Liberia in form and substance acceptable to the Lender;

3.1.7	London agent

documentary evidence that the agent for service of process named in Clause 35.2.1 of the Loan Agreement has accepted its appointment in respect of this Agreement;

3.1.8	Endorsement

the endorsement at the end of this Agreement signed by each Obligor (other than the Borrower); and

3.1.9	Further opinions, etc.

any further opinions, consents, agreements and documents in connection with this Agreement which the Lender may request.

3.2	Conditions Subsequent. The Borrower shall deliver or cause to be delivered to the Lender on, or as soon as practicable after, the Effective Date but in no event later than 15 Banking Days from the date hereof (or any such other date as the Lender and the Borrower may agree), the following additional documents and evidence:
3.2.1	the process agent acceptance letter referred to in Clause 3.1.7, duly executed; and
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3.2.2	any further opinions, consents, agreements and documents in connection with this Agreement which the Lender may request referred to in Clause 3.1.9.
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A breach of this Clause 3.2 shall constitute an Event of Default.

4.	REPRESENTATIONS AND WARRANTIES

Repetition of Loan Agreement representations and warranties. The Borrower represents and warrants to the Lender that the representations and warranties in Clause 18 (Representations) of the Loan Agreement, updated with appropriate modifications to refer to this Agreement, remain true and not misleading if repeated on the date of this Agreement and on the Effective Date with reference to the circumstances now existing.

5.	AMENDMENTS TO LOAN AGREEMENT AND OTHER SECURITY DOCUMENTS
5.1	Specific amendments to Loan Agreement. The Loan Agreement shall be, and shall be deemed by this Agreement to be, amended as follows:
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5.1.1	with effect from the Effective Date by adding in Clause 1.2 (Definitions) thereof each of the definitions in Clause 1.2 of this Agreement (other than the definitions of “Effective Date”and “Loan Agreement”);
---	---
5.1.2	with effect on and from the Effective Date, by deleting in Clause 1.2 (Definitions) thereof the definition of “Margin”;
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5.1.3	with effect from the Effective Date, by deleting in Clause 1.2 (Definitions) thereof in the definition of “HMT”the word “Her” and replacing them with the word “His”;
---	---
5.1.4	with effect on and from the Rate Switch Date, by deleting in Clause 1.2 (Definitions) thereof the definitions of “LIBOR”, “Replacement Benchmark”, “Screen Rate”and “Screen Rate Replacement Event”;
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5.1.5	with effect on and from the Rate Switch Date, by adding in Clause 1.2 (Definitions) thereof the following new definitions in alphabetical order:
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“Credit Adjustment Spread” means in relation to:

(a)	an Interest Period of up to one (1) month, zero point one one four four eight per cent (0.11448%) per annum;

(b)	an Interest Period of a duration exceeding one (1) month and up to three (3) months, zero point two six one six one per cent (0.26161%) per annum; and
(c)	an Interest Period of a duration exceeding three (3) months and up to six (6) months, zero point four two eight two six per cent (0.42826%) per annum;
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"Interpolated Term SOFR" means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	the applicable Term SOFR (as of the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
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(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for the day which is two US Government Securities Business Days before the Quotation Day; and
---	---
(b)	the applicable Term SOFR (as of the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
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"Market Disruption Rate" means the percentage rate per annum which is the aggregate of the Reference Rate and the applicable Credit Adjustment Spread;

"Published Rate" means:

(a)	SOFR; or
(b)	the Term SOFR for any Quoted Tenor;
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“Published Rate Replacement Event” means, in relation to a Published Rate:

(a)	the methodology, formula or other means of determining that Published Rate has, in the opinion of the Lender and the Borrower, materially changed;
(b)
---
(i)
---
(A)	the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
---	---
(B)	information is published in any order, decree, notice, petition or filing, however described, or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
---	---

provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;

(ii)	the administrator of that Published Rate publicly announces that it has ceased or will cease, to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;
(iii)	the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or
---	---
(iv)	the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
---	---
(c)	in the opinion of the Lender and the Borrower, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement;
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“Quoted Tenor” **** means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service;

“Reference Rate” **** means, in relation to the Loan or any part of the Loan:

(a)	the applicable Term SOFR as of the Quotation Day and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b)	as otherwise determined pursuant to Clause 3.5 (Unavailability of Term SOFR),
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and if, in either case, the aggregate of that rate and the Credit Adjustment Spread is less than zero, the Reference Rate shall be deemed to be such a rate that the aggregate of the Reference Rate and the Credit Adjustment Spread is zero

**“Relevant Nominating Body”**means any applicable central bank, regulator or other competent supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board;

“Replacement Reference Rate” **** means a reference rate which is:

(a)	formally designated, nominated or recommended as the replacement for a Published Rate by:
(i)	the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
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(ii)	any Relevant Nominating Body,
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and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;

(b)	if paragraph (a) does not apply, in the opinion of the Lender and the Borrower, generally accepted in the international or any relevant domestic loan markets as the appropriate successor to a Published Rate; or
(c)	if paragraphs (a) and (b) do not apply, in the opinion of the Lender and the Borrower, an appropriate successor to a Published Rate;
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“SOFR” **** means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate);

“Term SOFR” means the Term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published by Group Benchmark Administration Limited (or any other person which takes over the publication of that rate);

“US Government Securities Business Day” means any day other than:

(a)	a Saturday or a Sunday; and
(b)	a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities;
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5.1.6	with effect on and from the Rate Switch Date, by deleting in Clause 1.2 (Definitions) thereof the definition of “Banking Day” and replacing it with the following new definition:
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“Banking Day” means:

(a)	a day on which banks are open in Athens (excluding Saturdays and Sundays);
(b)	in respect of a day on which a payment is required to be made under a Security Document, a day on which banks are open in New York City (excluding Saturdays and Sundays);
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(c)	a day on which banks are open in each country or place where a payment is required to be made under a Security Document (excluding Saturdays and Sundays); and
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(d)	(in relation to the fixing of an interest rate) a day which is a US Government Securities Business Day;”;
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5.1.7	with effect on and from the Effective Date, by adding in Clause 1.2 (Definitions) thereof the following new definitions:
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“Applicable Margin” means

(a)	in respect of the Loan less an amount equivalent the Pledged Deposit Amount, 2.70% (two point seven per cent) per annum; and

(b)	in respect of the part of the Loan equivalent the Pledged Deposit Amount, zero point nine zero per cent (0.90%) per annum;

“Money Laundering” has the meaning given to it in Article 1 of the Directive (EU) 2015/849 of the European Parliament and of the Council of the European Union of 20 May 2015;

“Pledged Deposit Amount” means the aggregate of the amounts standing to the credit of the Pledged Deposit Account in accordance with Clause 3.12

5.1.8	with effect on and from the Rate Switch Date, **** by deleting in Clause 1.2 (Definitions) thereof the definition of “Quotation Day” and replacing it with:

“Quotation Day” **** means, in relation to any period for which an interest rate is to be determined, two (2) US Government Securities Business Days before the first day of that period (unless market practice differs in the relevant loan market, in which case the Quotation Day will be determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days); ****

5.1.9	with effect on and from the Effective Date, by adding in the definition of “Security Documents” in Clause 1.2 (Definitions) thereof after the words “any Tripartite Deed” the words “, the Mortgage Addendum, the Pledged Deposit Account Pledge”;
5.1.10	with effect on and from the Effective Date, by adding in the definition of “Security Value” in Clause 1.2 (Definitions) thereof after the words “pursuant to clause 8.2.1(b)” the words “and (c) the Pledged Deposit Amount”;
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5.1.11	with effect on and from the Rate Switch Date, by adding a new Clause 1.3.15 to read as follows:
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“1.3.15	references to the Lender's ** “cost of funds” ** in relation to the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan;”;
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5.1.12	with effect on and from the Rate Switch Date, by deleting Clause 3.1 (Normal interest rate) thereof and replacing it with the following:
---	---

“3.1 Normal interest rate

The Borrower must pay interest on the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Lender to be the aggregate of (a) the Applicable Margin in respect thereof, (b) the Reference Rate and (c) in respect of the Loan less an amount equivalent the Pledged Deposit Amount, the applicable Credit Adjustment Spread for such period.”;

5.1.13	with effect on and from the Rate Switch Date, by deleting Clauses 3.4 to 3.7 thereof and replacing it with the following:

“3.4	Default interest
3.4.1	If the Borrower fails to pay any sum (including, without limitation, any sum payable pursuant to this clause 3.4 (Default interest)) on its due date for payment under any of the Security Documents, the Borrower must pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before judgment) at a rate determined by the Lender pursuant to this clause 3.4 (Default interest).
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3.4.2	The period starting on such due date and ending on such date of payment shall be divided into successive periods selected by the Lender each of which (other than the first, which shall start on such due date) shall start on the last day of the preceding such period.
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3.4.3	The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum, (b) the Applicable Margin and (c) the Reference Rate and (d) in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the applicable Credit Adjustment Spread for such periods.
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3.4.4	Such interest shall be due and payable on demand, or, if no demand is made, then on the last day of each such period as determined by the Lender and on the day on which all amounts in respect of which interest is being paid under this clause are paid, and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is an amount of principal which became due and payable by reason of a declaration by the Lender under clause 22.2 or a prepayment pursuant to clauses 7.5 (Mandatory Prepayment on sale or Total Loss), 7.6 (Mandatory prepayment on change of ownership of Guarantor), 17.14.1 (Additional security) or 7.1 (Illegality), on a date other than an Interest Payment Date relating thereto, the first such period selected by the Lender shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate of two per cent (2%) above the rate applicable thereto immediately before it shall have become so due and payable.
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3.4.5	If, for the reasons specified in clause 3.5.2, the Lender is unable to determine a rate in accordance with the foregoing provisions of this clause 3.4 (Default interest), interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Lender to be two per cent (2%) per annum above the aggregate of the Applicable Margin and the cost of funds to the Lender compounded at such intervals as the Lender selects.
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3.5	Unavailability of Term SOFR
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3.5.1	Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan
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3.5.2	Cost of funds: If clause 3.5.1 applies but it is not possible to calculate the Interpolated Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 3.7 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.
3.6	Market disruption
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If before close of business in Athens on the Quotation Day for the relevant Interest Period the Lender determines **** that its cost of funds relating to the Loan or any part of the Loan would be in excess of (a) in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the Market Disruption Rate and (b) in respect an amount equivalent to the Pledged Deposit Amount, the Reference Rate then Clause 3.7 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.

3.7	Cost of funds
3.7.1	If this Clause 3.7 (Cost of funds) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
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(a)	the Applicable Margin; and
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(b)	the rate notified to the Borrower by the 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 its cost of funds relating to the Loan or that part of the Loan.
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3.7.2	If this Clause 3.7 (Cost of funds) applies and the Lender or the Borrower so require, the Lender and the Borrower shall enter into negotiations (for a period of not more than 15 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
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3.7.3	Subject to Clause 3.11 (Changes to reference rates), any substitute or alternative basis agreed pursuant to Clause 3.7.2 above shall be binding on all parties hereto.
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3.7.4	If any rate notified by the Lender under Clause 3.7.1(b) is less than zero, the relevant rate shall be deemed to be zero.
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3.7.5	If this Clause 3.7 (Cost of funds) applies, the Lender shall, as soon as practicable, notify the Borrower.
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3.8	Notice of prepayment
---	---

If the Borrower does not agree with an interest rate set by the Lender under Clause 3.7 (Cost of funds), the Borrower may give the Lender not less than 5 Banking Days’ notice of its intention to prepay the Loan at the end of the interest period set by the Lender.

3.9	Prepayment; termination of Commitment

A notice under Clause 3.8 (Notice of prepayment) shall be irrevocable; and on the last Banking Day of the interest period set by the Lender the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Applicable Margin and the balance of all other amounts payable under this Agreement and the other Security Documents or, if the Commitment has not been advanced, the Commitment shall be reduced to zero and the Loan shall not be made to the Borrower under this Agreement thereafter.

3.10	Application of prepayment

Without prejudice to Clause 3.8 (notice of prepayment). the provisions of Clause 7 (Illegality, Prepayment and Cancellation) shall apply in relation to the prepayment made hereunder.

3.11	Changes to reference rates

If a Published Rate Replacement Event has occurred in relation to any Published Rate for dollars, any amendment or waiver which relates to:

(a)	providing for the use of a Replacement Reference Rate in place of that Published Rate; and
(b)
---
(i)	aligning any provision of any Security Document to the use of that Replacement Reference Rate;
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(ii)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
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(iii)	implementing market conventions applicable to that Replacement Reference Rate;
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(iv)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
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(v)	adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one party hereto to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
---	---

may be made with the consent of the Lender and the Borrower.

5.1.14	with effect on and from the Effective Date, by adding new Clauses 3.12 and 3.13 to read as follows:

3.12	Pledged Deposit
3.12.1	The Borrower may deposit in the Pledged Deposit Account at the beginning of an Interest Period an amount equal to either (a) the Loan or (b) the Balloon Instalment.
---	---
3.12.2	The Pledged Deposit Amount shall be held on the Pledged Deposit Accounts in the form of time deposit for a period equal to the current Interest Period applicable to the Loan.
---	---
3.12.3	The deposit rate applicable to the Pledged Deposit Amount shall be equal to the Reference Rate applicable to the current Interest Period applicable to the Loan; and
---	---
3.12.4	The Pledged Deposit Amount (or any part thereof) shall be freely available to the Borrower at the end of the current Interest Period applicable to the Loan PROVIDED THAT:
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(a)	no Event of Default has occurred and is continuing;
---	---
(b)	the Borrower shall have given the Lender notice not later than 10.00 a.m. (Athens time) on the second Banking Day before the beginning of the following Interest Period, of its intention to make use in whole or in part of the Pledged Deposit Amount;
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(c)	after such use the aggregate amount of the Pledged Deposit Amount shall comply with the provisions of Clause 3.12.1 and 3.12.2; and
---	---
(d)	the Borrower may freely use the Pledged Deposit Amount (or any part thereof) only up to an amount so that after such use the Security Value shall be no less than the Required Security Amount and any part of the Pledged Deposit Amount which cannot be withdrawn, so as to ensure that the Security Value shall be no less than the Required Security Amount, shall immediately be remitted into an account opened by the Borrower with the Lender and which shall be pledged or charged to the Lender in order to constitute further security for the Loan for the purpose of Clause 8.2.1(b).
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3.13	Interest Rate Swaps
---	---

The Borrower may not enter into any interest hedging arrangements without the prior written consent of the Lender (such consent not to be unreasonably withheld or delayed).”;

5.1.15	with effect on and from the Effective Date, by deleting in the last line of Clause 7.1.8 (Required Authorisations and legal compliance) the words “money laundering” and replacing them with the words “Money Laundering”;
5.1.16	by adding in Clause 8.1.23 thereof after the words “other than the Earnings Account Pledge” the words “and the Pledged Deposit Amount”;
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5.1.17	with effect on and from the Effective Date, by deleting Clause 10.1.26 thereof and replacing it with the following:
---	---

“10.1.26	Money Laundering: any Security Party is in breach of or fails to observe any law, requirement, measure or procedure implemented to combat Money Laundering;”;
5.1.18	with effect on and from the Effective Date, by deleting in Clause 11.1 thereof the word “Margin” and replacing it with the words “Applicable Margin”;
---	---
5.1.19	with effect on and from the Effective Date, by construing references throughout to "this Agreement", "hereunder" and other like expressions as if the same referred to the Loan Agreement as amended and supplemented by this Agreement.
---	---
5.2	Amendments to Security Documents. With effect on and from the date hereof each of the Security Documents other than the Loan Agreement, shall be, and shall be deemed by this Agreement to be, amended as follows:
---	---
(a)	the definition of, and references throughout each of the Security Documents to, the Loan Agreement and any of the other Security Documents shall be construed as if the same referred to the Loan Agreement and those Security Documents as amended and supplemented by this Agreement;
---	---
(b)	by construing all references throughout each of the Security Documents to the "Mortgage" as references to the Mortgage as amended and supplemented by the Mortgage Addendum; and
---	---
(c)	by construing references throughout each of the Security Documents to "this Agreement", "this Deed", "hereunder” and other like expressions as if the same referred to such Security Documents as amended and supplemented by this Agreement.
---	---
5.3	Security Documents to remain in full force and effect.The Security Documents shall remain in full force and effect as amended and supplemented by:
---	---
(a)	the amendments to the Security Documents contained or referred to in Clauses 5.1 (Specific amendments to Loan Agreement) and 5.2 (Amendments to Security Documents); and
---	---
(b)	such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.
---	---
6.	FURTHER ASSURANCES
---	---
6.1	Borrower to execute further documents etc. The Borrower shall, and shall procure that any other party to any Security Document shall:
---	---
(a)	execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify; and
---	---
(b)	effect any registration or notarisation, give any notice or take any other step, which the Lender may, by notice to the Borrower or other party, specify
---	---
for any of the purposes described in Clause 6.2 (Purposes of further assurances) or for any similar or related purpose.

6.2	Purposes of further assurances. Those purposes are:
(a)	validly and effectively to create any Encumbrance or right of any kind which the Lender intended should be created by or pursuant to the Loan Agreement or any other Security Document, each as amended and supplemented by this Agreement; and
---	---
(b)	implementing the terms and provisions of this Agreement.
---	---
6.3	Terms of further assurances.The Lender may specify the terms of any document to be executed by the Borrower or any other party under Clause 6.1 (Borrower to execute further documents etc.), and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its interests.
---	---
6.4	Obligation to comply with notice.The Borrower shall comply with a notice under Clause 6.1 (Borrower to execute further documents etc.) by the date specified in the notice.
---	---
6.5	Additional corporate action.At the same time as the Borrower or any other party deliver to the Lender any document executed under Clause 6.1(a) (Borrower to execute further documents etc.), the Borrower or such other party shall also deliver to the Lender a certificate signed by 2 of the Borrower’s, or that other party's directors which shall:
---	---
(a)	set out the text of resolutions of the Borrower or that other party's directors specifically authorising the execution of the document specified by the Lender; and
---	---
(b)	state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Borrower's or that other party's articles of association or other constitutional documents.
---	---
7.	FEES AND EXPENSES
---	---
7.1	Fees and Expenses.The provisions of Clause 16 (Costsand expenses) of the Loan Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.
---	---
8.	NOTICES
---	---

General. The provisions of Clause 28 (Notices) of the Loan Agreement (as amended by this Agreement) shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9.	SUPPLEMENTAL

9.1	Counterparts.This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument.
9.2	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.
---	---
10	LAW AND JURISDICTION
---	---

Incorporation of the Loan Agreement provisions. The provisions of Clause 34 (Governing Law) and Clause 35 (Enforcement) of the Loan Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.

THE BORROWER

SIGNED by **** **** )

for and on behalf of ) /s/ Stefania Karmiri

BLESSED LUCK SHIPOWNERS LTD **** ****)

in the presence of: ) /s/ Anna-Maria Matsa

THE LENDER

SIGNED by ) /s/ Olga Voutsa

and by ) /s/ Charalampos Virlis

for and on behalf of )

PIRAEUS BANK S.A. )

in the presence of: ) /s/ Anna-Maria Matsa

COUNTERSIGNED this ___12____ day of July 2023 by the following parties who, by executing the same, confirm and acknowledge that they have read and understood the terms and conditions of the above Supplemental Agreement, that they agree in all respects to the same and that the Security Documents to which they are respectively 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 above Supplemental Agreement, and each of them hereby reaffirms the Security Documents to which it is a party as the same is amended by the above Supplemental Agreement.

/s/ Aristides J. Pittas

_________________________

Aristides J. Pittas

duly authorised on behalf of

EURODRY LTD

/s/ Nikolaos Pittas

_________________________

Nikolaos Pittas

duly authorised on behalf of

EUROBULK LTD

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EXHIBIT 4.22

Supplemental Letter

From: Piraeus Bank S.A.

4 Amerikis Street

105 64 Athens

(with corporate registration number

(GCR NO) 157660660000)

To: BLESSED LUCK SHIPOWNERS LTD

80 Broad Street

Monrovia

Liberia

8 November 2023

Dear Sirs

Loan agreement dated 12 August 2021 (as amended by a supplemental letter dated 12^th^ July 2023, the “Loan Agreement”) made between ourselves as borrower and yourselves as lender in respect of a loan of up to USD 8,000,000

We refer to the Loan Agreement.

Words and expressions defined in the Loan Agreement will have the same meaning when used in this letter.

The principal amount currently outstanding of the Loan is US$4,000,000.

The Borrower and the Corporate Guarantor have requested the Lender to amend the interest provisions applying to the Pledged Deposit Amount and the Lender hereby agrees to amend the Loan Agreement accordingly.

The Lender hereby agrees that with effect from the date of this letter, the Loan Agreement shall be amended as follows:

1.	by deleting Clause 3.1 (Normal interest rate) thereof and replacing it with the following:
“3.1	Normal interest rate
---	---

The Borrower must pay interest on the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Lender to be:

(a)	in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the aggregate of (i) the Applicable Margin in respect thereof, (ii) the Reference Rate and (iii) the applicable Credit Adjustment Spread for such period; and
(b)	in respect of an amount equivalent to the Pledged Deposit Amount, the Applicable Margin in respect thereof.”;
---	---
2.	by deleting clause 3.4.3 and replacing it with:
---	---

“3.4.3	The rate of interest applicable to each such period shall be the aggregate of (as determined by the Lender):
(a)	in respect of the Loan less an amount equivalent to the Pledged Deposit Amount (a) two per cent (2%) per annum, (b) the Applicable Margin, (c) the Reference Rate and (d) the applicable Credit Adjustment Spread for such periods; and
---	---
(b)	in respect of an amount equivalent to the Pledged Deposit Amount (a) two per cent (2%) per annum and (b) the Applicable Margin.”;
---	---
3.	by deleting Clause 3.6 and replacing it with:
---	---
“3.6	Market disruption
---	---

If before close of business in Athens on the Quotation Day for the relevant Interest Period the Lender determines that its cost of funds relating to the Loan or any part of the Loan less an amount equivalent to the Pledged Deposit Amount would be in excess of the Market Disruption Rate then Clause 3.7 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.”;

4.	by deleting Clause 3.12.2 and replacing it with:

“3.12.2 The Pledged Deposit Amount shall be held on the Pledged Deposit Account without being held in the form of a time deposit for a period equal to the current Interest Period applicable to the Loan”;

5.	by deleting Clause 3.12.3 and replacing it with:

“3.12.3 the deposit rate applicable to the Pledged Deposit Amount shall be equal to zero; and”.

Save as provided above, the Loan Agreement and the other Security Documents shall be and are hereby re-affirmed and remain in full force and effect.

This letter may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.

This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with English law and the terms of Clause 18 of the Loan Agreement shall apply as if set out herein in full, updated mutatis mutandis.

Please confirm your agreement to the terms of this letter by signing the acknowledgement set out below.

Yours faithfully,

/s/ Alexandros Kokkinis	/s/ Evgenia Kouvara
ALEXANDROS KOKKINIS	EVGENIA KOUVARA
for and on behalf of
PIRAEUS BANK SA

On this 8^th^ day of November 2023, we hereby confirm our acceptance of and our agreement to the terms of the above letter.

/s/ Stefania Karmiri

____________________________

STEFANIA KARMIRI

for and on behalf of

BLESSED LUCK SHIPOWNERS LTD

COUNTERSIGNED this 8^th^ day of November 2023 by the following party which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above letter, that it agrees in all respects to the same and that the Security Documents to which it is 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 above letter, and it hereby reaffirms the Security Documents to which it is a party as the same is amended by the above letter.

/s/ Aristides J. Pittas

____________________________

ARISTIDES J. PITTAS

duly authorised for and on behalf of

EURODRY LTD.

/s/ Nikolaos Pittas

____________________________

NIKOLAOS PITTAS

duly authorised for and on behalf of

EUROBULK LTD.

HTML Editor

EXHIBIT 4.23

Supplemental Letter

From: Piraeus Bank SA

4 Amerikis Street

105 64 Athens

(with corporate registration number

(GCR NO) 157660660000)

To: MOLYVOS SHIPPING LTD

Trust Company Complex

Ajeltake Road, Ajeltake Island

Majuro, Marshall Islands MH96960

SANTA CRUZ SHIPOWNERS LTD

80 Broad Street

Monrovia

Liberia

12 July 2023

Dear Sirs

Loan agreement (the “Loan Agreement”) dated 30 September 2022 made between ourselves as joint and several borrowers and yourselves as lender in respect of a loan of up to USD20,000,000

We refer to the Loan Agreement.

Words and expressions defined in the Loan Agreement will have the same meaning when used in this letter.

The principal amount currently outstanding of the Loan is US$17,075,000.

The Borrower and the Corporate Guarantor have requested the Lender to reduce the amount of the Margin applicable to a part of the Loan equivalent to the aggregate of deposits held in an account held by Borrower B with the Lender and pledged in favour of the Lender, and the Lender hereby agrees, subject to the terms of this letter and the fulfilment of the Conditions Precedent, to amend the Loan Agreement accordingly.

The Lender hereby agrees that with effect from the date on which it certifies that the Conditions Precedent have been fulfilled, the Loan Agreement shall be amended as follows:

1.	by deleting the definition of “Margin” in Clause 1.2 thereof;
2.	by adding in Clause 1.2 thereof the following definitions:
---	---

“Applicable Margin” means:

(a)	in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, 2.25% (two point twenty five per cent) per annum; and
(b)	in respect of the part of the Loan equivalent to the Pledged Deposit Amount, zero point nine zero per cent (0.90%) per annum,
---	---

as the same may be reduced by the Sustainability Pricing Adjustment in accordance with clause 3.13 (Sustainability Pricing Adjustment);

“Pledged Deposit Account” means an interest-bearing USD current account opened by Borrower B with the Lender and includes any sub-accounts thereof and any other account designated in writing by the Lender to be a Pledged Deposit Account for the purposes of this Agreement, and in the plural means all of them;

“Pledged Deposit Account Pledge” means a first priority charge required to be executed hereunder between Borrower B and the Lender in respect of the relevant Pledged Deposit Account in such form as the Lender may require;

“Pledged Deposit Amount” means the aggregate of the amounts standing to the credit of the Pledged Deposit Account in accordance with Clause 3.14;

3.	by deleting in the definition of “Earnings Account” in Clause 1.2 thereof the words “in respect of each Earnings Account” and replacing them with the words “in respect of each Borrower”;
4.	by adding in the definition of “Security Documents” in Clause 1.2 thereof after the words “any Tripartite Deed” the words “the Pledged Deposit Account Pledge”;
---	---
5.	by adding in the definition of “Security Value” in Clause 1.2 (Definitions) thereof after the words “pursuant to clause 8.2.1(b)” the words “and (c) the Pledged Deposit Amount”;
---	---
6.	by deleting in Clauses 3.1, 3.4, 3.7.1, 3.9, 3.13 and 11.1 the word “Margin” and replacing it with the words “Applicable Margin”;
---	---
7.	by deleting Clause 3.1 (Normal interest rate) thereof and replacing it with the following:
---	---
“3.1	Normal interest rate
---	---

The Borrower must pay interest on the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Lender to be the aggregate of (a) the Applicable Margin in respect thereof, (b) the Reference Rate and (c) in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the applicable Credit Adjustment Spread for such period.”;

8.	by deleting clause 3.4.3 and replacing it with:
“3.4.3	The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum, (b) the Applicable Margin and (c) the Reference Rate and (d) in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the applicable Credit Adjustment Spread for such periods.”;
---	---

9.	by deleting Clause 3.6 and replacing it with:
“3.6	Market disruption
---	---

If before close of business in Athens on the Quotation Day for the relevant Interest Period the Lender determines that its cost of funds relating to the Loan or any part of the Loan would be in excess of (a) in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the Market Disruption Rate and (b) in respect an amount equivalent to the Pledged Deposit Amount, the Reference Rate then Clause 3.7 (

10.	by deleting in Clause 3.13.2 the words “(initially of 2.25% per annum)”;
11.	by deleting Clause 3.13.3 and replacing it with:
---	---

“3.13.3 At the expiry of a Pricing Adjustment Period, the Applicable Margin applicable to the relevant Advance or part thereof shall revert to 2.25% or 0.90% per annum (as the case may be).”;

12.	by deleting Clause 3.13.5 and replacing it with:

“3.13.5 If an Event of Default occurs, the Sustainability Pricing Adjustment shall no longer apply and the original Applicable Margin (of 2.25% or 0.90% per annum (as the case may be)) shall apply in respect of all the Advances.”;

13.	by adding a new Clause 3.14 to read:
“3.14	Pledged Deposit
---	---
3.14.1	Borrower B may deposit in the Pledged Deposit Account on the first day of an interest period an amount equal to (a) an Advance, or (b) the Loan or (c) either Balloon Instalment or (d) the aggregate of the Balloon Instalments.
---	---
3.14.2	The Pledged Deposit Amount shall be held on the Pledged Deposit Accounts in the form of time deposit for a period equal to the current Interest Period applicable to the Loan.
---	---
3.14.3	the deposit rate applicable to the Pledged Deposit Amount shall be equal to the Reference Rate applicable to the current Interest Period applicable to the Loan; and
---	---
3.14.4	the Pledged Deposit Amount (or any part thereof) shall be freely available to Borrower B at the end of the current Interest Period applicable to the Loan PROVIDED THAT:
---	---
(a)	no Event of Default has occurred and is continuing;
---	---
(b)	Borrower B shall have given the Lender notice not later than 10.00 a.m. (Athens time) on the second Banking Day before the beginning of the following Interest Period, of its intention to make use in whole or in part of the Pledged Deposit Amount;
---	---

(c)

after such use the aggregate amount of the Pledged Deposit Amount shall comply with the provisions of Clause 3.14.1 and 3.14.2; and

(d)

Borrower B may freely use the Pledged Deposit Amount (or any part thereof) only up to an amount so that after such use the Security Value shall be no less than the Required Security Amount and any part of the Pledged Deposit Amount which cannot be withdrawn, so as to ensure that the Security Value shall be no less than the Required Security Amount, shall immediately be remitted into an account opened by the Borrowers or any of them with the Lender and which shall be pledged or charged to the Lender in order to constitute further security for the Loan for the purpose of Clause 8.2.1(b).”,

---

where “Conditions Precedent” means the delivery to the Lender or its lawyers of:

(a)	Corporate authorities
(i)	a list of directors and officers of the Borrowers specifying the names and positions of such persons, certified by an officer of the Borrower to be true, complete and up to date;
---	---
(ii)	Certified Copies of resolutions of the directors and shareholders of the Borrowers approving this Letter and authorising the execution and delivery hereof and of the Pledged Deposit Account Pledge; and
---	---
(iii)	an original or a Certified Copy of any power of attorney issued by the Borrowers pursuant to such resolutions; and
---	---
(b)	the Pledged Deposit Account Pledge duly executed and delivered, together with the process agent letters duly executed and delivered under the Pledged Deposit Account Pledge.
---	---

Save as provided above, the Loan Agreement and the other Security Documents shall be and are hereby re-affirmed and remain in full force and effect.

This letter may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.

Please confirm your agreement to the terms of this letter by signing the acknowledgement set out below.

Yours faithfully,

/s/ Olga Voutsa	/s/ Charalampos Birlis
for and on behalf of
PIRAEUS BANK SA

On this 12^th^ day of July 2023, we hereby confirm our acceptance of and our agreement to the terms of the above letter.

/s/ Stefania Karmiri

____________________________

for and on behalf of

MOLYVOS SHIPPING LTD

SANTA CRUZ SHIPOWNERS LTD

COUNTERSIGNED this 12^th^ day of July 2023 by the following party which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above letter, that it agrees in all respects to the same and that the Security Documents to which it is 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 above letter, and it hereby reaffirms the Security Documents to which it is a party as the same is amended by the above letter.

/s/ Aristides J. Pittas

_____________________________

duly authorised for and on behalf of

EURODRY LTD.

/s/ Nikolaos Pittas

_____________________________

duly authorised for and on behalf of

EUROBULK LTD.

HTML Editor

EXHIBIT 4.24

Supplemental Letter

From: Piraeus Bank SA

4 Amerikis Street

105 64 Athens

(with corporate registration number

(GCR NO) 157660660000)

To: MOLYVOS SHIPPING LTD

Trust Company Complex

Ajeltake Road, Ajeltake Island

Majuro, Marshall Islands MH96960

SANTA CRUZ SHIPOWNERS LTD

80 Broad Street

Monrovia

Liberia

8 November 2023

Dear Sirs

Loan agreement dated 30 September 2022 (as amended by a supplemental letter dated 12 July 2023, the “Loan Agreement”) made between ourselves as joint and several borrowers and yourselves as lender in respect of a loan of up to USD20,000,000

We refer to the Loan Agreement.

Words and expressions defined in the Loan Agreement will have the same meaning when used in this letter.

The principal amount currently outstanding of the Loan is US$16,100,000.

The Lender hereby agrees that with effect from the date of this letter, the Loan Agreement shall be amended as follows:

1.	by deleting Clause 3.1 (Normal interest rate) thereof and replacing it with the following:
“3.1	Normal interest rate
---	---

The Borrower must pay interest on the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Lender to be:

(a)	in respect of the Loan less an amount equivalent to the Pledged Deposit Amount, the aggregate of (i) the Applicable Margin in respect thereof, (ii) the Reference Rate and (iii) the applicable Credit Adjustment Spread for such period; and
(b)	in respect of an amount equivalent to the Pledged Deposit Amount, the Applicable Margin in respect thereof.”;
---	---
2.	by deleting clause 3.4.3 and replacing it with:
---	---
“3.4.3	The rate of interest applicable to each such period shall be the aggregate of (as determined by the Lender):
---	---
(a)	in respect of the Loan less an amount equivalent to the Pledged Deposit Amount (a) two per cent (2%) per annum, (b) the Applicable Margin and (c) the Reference Rate and (d) the applicable Credit Adjustment Spread for such periods; and
---	---
(b)	in respect of an amount equivalent to the Pledged Deposit Amount (a) two per cent (2%) per annum and (b) the Applicable Margin.”;
---	---
3.	by deleting Clause 3.6 and replacing it with:
---	---
“3.6	Market disruption
---	---

4.	by deleting Clause 3.14.2 and replacing it with:
“3.14.2	The Pledged Deposit Amount shall be held on the Pledged Deposit Account without being held in the form of a time deposit for a period equal to the current Interest Period applicable to the Loan”;
---	---
5.	by deleting Clause 3.14.3 and replacing it with:
---	---
“3.14.3	the deposit rate applicable to the Pledged Deposit Amount shall be equal to zero; and”.
---	---

Save as provided above, the Loan Agreement and the other Security Documents shall be and are hereby re-affirmed and remain in full force and effect.

This letter may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.

Please confirm your agreement to the terms of this letter by signing the acknowledgement set out below.

Yours faithfully,

/s/ Alexandros Kokkinis	/s/ Evgenia Kouvara
ALEXANDROS KOKKINIS	EVGENIA KOUVARA
for and on behalf of
PIRAEUS BANK SA

On this 8^th^ day of November 2023, we hereby confirm our acceptance of and our agreement to the terms of the above letter.

/s/ Stefania Karmiri

____________________________

STEFANIA KARMIRI

for and on behalf of

MOLYVOS SHIPPING LTD

SANTA CRUZ SHIPOWNERS LTD

/s/ Aristides J. Pittas

_____________________________

ARISTIDES J. PITTAS

duly authorised for and on behalf of

EURODRY LTD.

/s/ Nikolaos Pittas

_____________________________

NIKOLAOS PITTAS

duly authorised for and on behalf of

EUROBULK LTD.

HTML Editor

EXHIBIT 4.25

EXECUTION **** VERSION

Dated 6 September 2023

between

EIRINI SHIPPING LTD

as Borrower

with

EURODRY LTD.

as Corporate Guarantor and Shareholder

with

EUROBULK LTD.

as Manager

with

SINOPAC CAPITAL INTERNATIONAL (HK) LIMITED

as Lender

SUPPLEMENTAL AGREEMENT

to the Loan Agreement dated 22 February 2021

in respect of a loan of up to USD5,000,000

TABLE OF CONTENTS

Clause No.		Page No.
1.	INTERPRETATION	1
2.	CONDITIONS PRECEDENT	1
3.	AMENDMENTS TO THE LOAN AGREEMENT	2
4.	BORROWER'S CONFIRMATION	8
5.	CORPORATE GUARANTOR'S CONFIRMATION	8
6.	SHAREHOLDER'S CONFIRMATION	8
7.	MANAGER'S CONFIRMATION	8
8.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999	8
9.	MISCELLANEOUS	8
SCHEDULE 1		9
EXECUTION PAGE		19

THIS SUPPLEMENTAL AGREEMENT (the "Agreement") is made the 6 day of September 2023

BETWEEN:

(1)	EIRINI ** SHIPPING LTD, ** a corporation incorporated in the Republic of Liberia with its registered office at 80 Broad Street, Monrovia, Liberia, as borrower (the "Borrower");
(2)	EURODRY LTD., a corporation incorporated in the Republic of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960, as corporate guarantor (the "Corporate Guarantor");
---	---
(3)	EURODRY LTD., a corporation incorporated in the Republic of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960, as shareholder (the "Shareholder");
---	---
(4)	EUROBULK LTD., a corporation incorporated in the Republic of Liberia with its registered office at 80 Broad Street, Monrovia, Liberia and having its place of business at 4 Messogiou & Evropis Street, 151 24 Maroussi, Greece, as manager of the Vessel (the "Manager"); and
---	---
(5)	SINOPAC CAPITAL INTERNATIONAL (HK) LIMITED, a company incorporated in Hong Kong with its registered office at Suites 3306, 33/F., Tower 1, The Gateway, 25 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong, as lender (the "Lender").
---	---

WHEREAS:

(A)	Pursuant to a Loan Agreement dated 22 February 2021 (the "Loan Agreement") entered into between (i) the Borrower, as borrower, and (ii) the Lender, as lender, the Lender agreed to make available to the Borrower a loan facility of (originally) up to USD5,000,000 of which USD2,900,000 remains outstanding on even date, for the purpose and upon the terms and conditions set out in the Loan Agreement.
(B)	The Borrower and the Lender have agreed to amend the terms of the Loan Agreement on and subject to the terms and conditions herein contained.
---	---

NOW IT IS HEREBY AGREED as follows:

1.	INTERPRETATION
1.1	Definitions
---	---

In this Agreement, all words and phrases defined in the Loan Agreement and not otherwise defined herein shall bear the meanings ascribed to them in the Loan Agreement.

1.2	All references in the Loan Agreement to "this Agreement" or "hereunder" or "herein" shall be construed as "this Agreement as amended and supplemented by this Agreement".
2.	CONDITIONS ** PRECEDENT**
---	---
2.1	The amendments to be made to the Loan Agreement by this Agreement shall take effect on and from the date that the Lender receives all of the documents and other items listed in Schedule 1 (Conditions Precedent) of this Agreement, in form and substance satisfactory to the Lender (the "Effective Date").
---	---

2.2	The ** Lender shall notify the Borrower promptly upon being so satisfied.**
3.	AMENDMENTS ** TO THE LOAN AGREEMENT**
---	---

With effect from the Rate Switch Date, the Loan Agreement shall be amended as follows:

3.1	The following new definitions shall be inserted to the Loan Agreement and arranged in alphabetical order with other definitions under clause 1.2 (Definitions) of the Loan Agreement:

"Credit Adjustment Spread" means 0.26161% (zero point two six one six one per cent) per annum;

"Interpolated Term SOFR" means, in relation to the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

(a)	either:
(i)	Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan; or
---	---
(ii)	if no such Term SOFR is available for a period which is less than the Interest Period of the Loan, Overnight SOFR for the day which is 2 US Government Securities Business Days before the Quotation Day; and
---	---
(b)	Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan;
---	---

"Market Disruption Rate" means the percentage rate per annum which is the aggregate of the Reference Rate and the applicable Credit Adjustment Spread;

"Overnight SOFR" means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate);

"Rate Switch Date" means 24 August 2023;

"Reference Rate" means, in relation to the Loan:

(a)	Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan; or
(b)	as otherwise determined pursuant to clause 3.4 (Market disruption; non- availability),
---	---

and if, in either case, the aggregate of that rate and the applicable Credit Adjustment Spread is less than zero, the Reference Rate shall be deemed to be such a rate that the aggregate of the Reference Rate and the applicable Credit Adjustment Spread is zero;

"Term SOFR" means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate);

"US Government Securities Business Day" means any day other than:

(a)	a Saturday or a Sunday; and
(b)	a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.”
---	---
3.2	The definition of "Banking Day" under clause 1.2 (Definitions) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:
---	---

"Banking Day" means a day (other than a Saturday or Sunday):

(a)	(in relation to the fixing of an interest rate) which is a US Government Securities Business Day; and
(b)	on which banks are open for business in London, Athens, Hong Kong, Taipei, and New York City (or any other relevant place of payment under clause 6);”
---	---
3.3	The definition of "Quotation Day" under clause 1.2 (Definitions) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:
---	---

"Quotation Day" means, in relation to any period for which an interest rate is to be determined under any provision of a Security Document, the day which is 2 US Government Securities Business Days before the first day of that period unless market practice differs in the relevant loan market, in which case the Quotation Day will be determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days);”

3.4	The definition of "Specified Time" under clause 1.2 (Definitions) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:

"Specified Time" means the Quotation Day.”

3.5	The definition of "LIBOR" under clause 1.2 (Definitions) of the Loan Agreement shall be deleted in its entirety.
3.6	Clause 3.1 (Normal interest rate) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:
---	---

“3.1 **** Normal interest rate

The Borrower must pay interest on the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Lender to be the aggregate of (a) the Margin in respect thereof, (b) the Reference Rate for such period and (c) the Credit Adjustment Spread.”

3.7	Each of Clause 3.3 (Default interest) and Clause 3.4 (Market disruption; non- availability) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:

“3.3 Default interest

If the Borrower fails to pay any sum (including, without limitation, any sum payable pursuant to this clause 3.3) on its due date for payment under any of the Security Documents, the Borrower must pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before judgment) at a rate determined by the Lender pursuant to this clause 3.3. The period starting on such due date and ending on such date of payment shall be divided into successive periods selected by the Lender each of which (other than the first, which shall start on such due date) shall start on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum, (b) the Margin, (c) the Reference Rate and (d) the Credit Adjustment Spread for such periods. Such interest shall be due and payable on demand, or, if no demand is made, then on the last day of each such period as determined by the Lender and on the day on which all amounts in respect of which interest is being paid under this clause are paid, and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is an amount of principal which became due and payable by reason of a declaration by the Lender under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 4.4, 8.2.1(a) or 12.1, on a day other than an Interest Payment Date relating thereto, the first such period selected by the Lender shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate of two per cent (2%) above the rate applicable thereto immediately before it shall have become so due and payable. If, for the reasons specified in clause 3.4.1, the Lender is unable to determine a rate in accordance with the foregoing provisions of this clause 3.3, interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Lender to be two per cent (2%) per annum above the aggregate of the Margin and the cost of funds to the Lender compounded at such intervals as the Lender selects.

3.4	Market ** disruption; non availability**
3.4.1	If at any time prior to the commencement of any Interest Period:
---	---
(a)	no Term SOFR is available for the Interest Period of the Loan; or
---	---
(b)	the Lender considers that the cost to it of funding the Loan (or any part of them) during that Interest Period would be in excess of the Market Disruption Rate,
---	---

then the Lender must promptly give notice (a "Determination Notice") thereof to the Borrower. A Determination Notice shall contain particulars of the relevant circumstances giving rise to its issue. After the giving of any Determination Notice, regardless of any other provision of this Agreement, no Commitment shall be borrowed until notice to the contrary is given to the Borrower by the Lender.

3.4.2

Within ten (10) Banking Days of any Determination Notice being given by the Lender under clause 3.4.1, the Lender must certify an alternative basis in place of the Reference Rate (the "Alternative Basis") for maintaining the Loan. The Alternate Basis may at the Lender's sole discretion include (without limitation) alternative interest periods, alternative currencies or alternative rates of interest but shall include the relevant Margin above the cost of funds to the Lender.

Once the Alternative Basis has been received by the Borrower, the Borrower and the Lender shall negotiate in good faith for a period of thirty (30) Banking Days in order to arrive at a mutually acceptable substitute basis for the Lender to continue to make available the Loan and, if within such thirty (30) Banking Day period the Borrower and the Lender shall agree in writing upon such an alternative basis (the "Substitute Basis") the Substitute Basis should be retroactive to and effective from the first day of the Interest Period.

The Substitute Basis so certified shall be binding upon the Borrower, and shall take effect in accordance with its terms from the date specified in the Determination Notice until such time as the Lender notifies the Borrower that none of the circumstances specified in clause 3.4.1 continues to exist whereupon the normal interest rate fixing provisions of the Agreement shall again apply and, subject to the other provisions of this Agreement, the Commitment my again be borrowed.

If the Borrower does not agree the Substitute Basis, then the Borrower shall have the right to repay the Loan without any premium or penalty on the next Interest Payment Date after receiving notice of the Substitute Basis, together with accrued interest thereon payable to the Lender at the rate certified by the Lender and notified to the Borrower as being a reasonable interest reflecting the cost to the Lender of funding the Loan during the period ending on the date of such prepayment, plus the Margin.

So long as any Substitute Basis is in force, the Lender shall from time to time (but at least monthly) review whether or not the circumstances are such that such Substitute Basis is no longer necessary and, if the Lender so determines it shall notify the Borrower that the Substitute Basis shall cease to be effective from such date as the Lender shall reasonably specify.”

3.9	Clause 13.9 (Replacement of Screen Rate) of the Loan Agreement shall be deleted in its entirety and be replaced with the following:
“13.9	Changes to reference rates
---	---
13.9.1	If a Published Rate Replacement Event has occurred in relation to the Published Rate, any amendment or waiver which relates to:
---	---
(a)	providing for the use of a Replacement Reference Rate; and (b)
---	---
(i)	aligning any provision of any Security Document to the use of that Replacement Reference Rate;
---	---
(ii)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
---	---

(iii)	implementing market conventions applicable to that Replacement Reference Rate;
(iv)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
---	---
(v)	adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
---	---

may be made with the consent of the Lender and the Borrower.

13.9.2	In this clause 13.9:

"Published Rate" means:

(a)	Overnight SOFR; or
(b)	Term SOFR for any Quoted Tenor.
---	---

"Published Rate Replacement Event" means, in relation to a Published Rate:

(a)	the methodology, formula or other means of determining that Published Rate has, in the opinion of the Lender and the Borrower, materially changed;
(b)
---
(i)
---
(A)	the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
---	---
(B)	information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
---	---

provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;

(ii)	the administrator of that Published Rate publicly announces that it has ceased or will cease to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;

(iii)	the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or
(iv)	the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
---	---
(c)	the administrator of that Published Rate determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
---	---
(i)	the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender and the Borrower) temporary; or
---	---
(ii)	that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than 10 Banking Days; or
---	---
(d)	in the opinion of the Lender and the Borrower, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
---	---

"Quoted Tenor" means, any period for which Term SOFR is customarily displayed on the relevant page or screen of an information service.

"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

"Replacement Reference Rate" means a reference rate which is:
(a)	formally designated, nominated or recommended as the replacement for a Published Rate by:
---	---
(i)	the administrator of that Published Rate; or
---	---
(ii)	any Relevant Nominating Body,
---	---

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under paragraph (ii) above;

(b)	in the opinion of the Lender and the Borrower, generally accepted in the international or any relevant domestic loan markets as the appropriate successor to a Published Rate; or
(c)	in the opinion of the Lender and the Borrower, an appropriate successor to a Published Rate.”
---	---

4.	BORROWER'S CONFIRMATION
The Borrower hereby confirms its approval of the contents of this Agreement, and confirms and agrees that its obligations under the Loan Agreement and other Security Documents to which it is a party shall continue to be in full force and effect and shall extend to cover all sums from time to time owing by it under the Loan Agreement as supplemented by this Agreement and the other Security Documents.
---
5.	CORPORATE ** GUARANTOR'S CONFIRMATION**
---	---
The Corporate Guarantor hereby confirms its approval of the contents of this Agreement, and confirms and agrees that its obligations under the Security Documents to which it is a party shall continue to be in full force and effect and shall extend to cover all sums from time to time owing by the Borrower under the Loan Agreement as supplemented by this Agreement and the other Security Documents.
---
6.	SHAREHOLDER'S ** CONFIRMATION**
---	---
The Shareholder hereby confirms its approval of the contents of this Agreement, and confirms and agrees that its obligations under the Security Documents to which it is a party shall continue to be in full force and effect and shall extend to cover all sums from time to time owing by the Borrower under the Loan Agreement as supplemented by this Agreement and the other Security Documents.
---
7.	MANAGER'S CONFIRMATION
---	---
The Manager hereby confirms its approval of the contents of this Agreement, and confirms and agrees that its obligations under the Security Documents to which it is a party shall continue to be in full force and effect and shall extend to cover all sums from time to time owing by the Borrower under the Loan Agreement as supplemented by this Agreement and the other Security Documents.
---
8.	CONTRACTS ** (RIGHTS OF THIRD PARTIES) ACT 1999**
---	---
This Agreement does not give rise to any rights enforceable by a person who is not a party hereto. Without prejudice to the generality of the foregoing, rights that would otherwise arise in favour of third parties under the Contracts (Rights of Third Parties) Act 1999 are hereby excluded.
---
9.	MISCELLANEOUS
---	---
9.1	This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
---	---
9.2	This Agreement and any non-contractual obligations arising out of or in connection with it, are governed by and construed in accordance with English law.
---	---
9.3	Save as amended hereinabove, all other terms and conditions of the Loan Agreement shall remain unchanged and in full force and effect in accordance with the terms and conditions thereof.
---	---

SCHEDULE 1 CONDITIONS PRECEDENT

1.	Security Parties' documents
1.1	A copy of the Constitutional Documents of each Security Party.
---	---
1.2	A copy of a resolutions of the board of directors of each Security Party:
---	---
(i)	approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute, deliver and perform this Agreement; and
---	---
(ii)	authorising a specified person or persons to execute this Agreement on its behalf.
---	---
1.3	A specimen of the signature of each person authorised by the resolutions referred to in paragraph 1.2 above.
---	---
1.4	A copy of a resolutions signed by all the holders of the issued shares in each Security Party (other than the Corporate Guarantor and the Shareholder) approving the terms of, and the transactions contemplated by, this Agreement.
---	---
1.5	The original of any power of attorney under which any person is to execute this Agreement on behalf of any Security Party.
---	---
1.6	A certificate of an authorised signatory of each Security Party certifying that each copy document relating to it specified in this Schedule 1 is correct, complete and in full force and effect and has not been amended or superseded as at a date no earlier than the date of this Agreement and that any resolutions or power of attorney relating to it have not been revoked or amended.
---	---
2.	Security Documents
---	---
2.1	Duly executed originals of this Agreement.
---	---
2.2	The Mortgage, as amended, duly executed by the Borrower.
---	---
3.	Legal opinions
---	---
3.1	A legal opinion addressed to the Lender as to English law, substantially in the form approved by the Lender prior to signing this Agreement.
---	---
3.2	A legal opinion of the legal advisers to the Lender in each jurisdiction (other than England) in which a Secured Party is incorporated and/or which is or is to be the Flag State of the Vessel, each substantially in the form approved by the Lender prior to the signing this Agreement.
---	---

EXECUTION PAGE

THE BORROWER

SIGNED by /s/ Stefania Karmiri

attorney- in-fact for and on behalf of

EIRINI SHIPPING LTD

pursuant to a Power of Attorney dated 23 August 2023

THE CORPORATE GUARANTOR

SIGNED by /s/ Stefania Karmiri

attorney-in-fact for and on behalf of

EURODRY LTD.

pursuant to a Power of Attorney dated 23 August 2023

THE SHAREHOLDER

SIGNED by /s/ Stefania Karmiri
attorney-in-fact for and on behalf of
EURODRY LTD.
pursuant to a Power of Attorney dated 23 August 2023

THE MANAGER

SIGNED by /s/ Stefania Karmiri

attorney-in-fact for and on behalf of

EUROBULK LTD.

pursuant to a Power of Attorney dated 23 August 2023

THE LENDER

SIGN ED by /s/ Lin Chia-Heng

for and on behalf of

SINOPAC CAPITAL INTERNATIONAL (HK) LIMITED

in the presence of:

Name: /s/ Hsieh Yun-Ta

Title: Senior Clerk

ex_655480.htm

EXHIBIT 4.26

THIS AGREEMENT is made on the 12^th^ day of October 2023

BETWEEN:

(1)	YANNIS NAVIGATION LTD, a corporation incorporated in accordance with the laws of the Republic of the Marshall Islands whose registered office is situated at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the “Borrower”);
(2)	THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as lenders (the “Lenders”);
---	---
(3)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as arranger through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Arranger”);
---	---
(4)	EUROBANK S.A., ** a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as account bank through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Account Bank**”);
---	---

(5)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as agent through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Agent”); and
(6)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as security trustee through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Security Trustee”). ****
---	---

AND IT IS HEREBY AGREED as follows:

1.	PURPOSE, DEFINITIONS AND INTERPRETATION
1.1	Purpose
---	---

This Agreement sets out the terms and conditions upon and subject to which it is agreed that the Lenders will make available to the Borrower a senior secured term loan of the lesser of (a) $10,500,000 and (b) 50% of the Market Value of the Ship, by way of one (1) advance for the purpose of financing part of the Purchase Price of the Ship and/or refinancing part of the Borrower’s equity for the acquisition cost of the Ship, if applicable, in case the Borrower has paid the Purchase Price of the Ship (or part of it) with its own funds.

1.2	Definitions.

In this Agreement, unless the context otherwise requires each term or expression defined in the recital of the parties and in this Clause shall have the meaning given to it in the recital of the parties, in this Clause:

“Account” means (a) each of the Earnings Account(s), the Retention Account and the Cash Collateral Account and (b) any other account opened, made or established for the purposes of this Agreement;

“Account Bank” means, in relation to any of the Earnings Account(s) or the Retention Account and the Cash Collateral Account, Eurobank S.A., acting through its Shipping Division at 83, Akti Miaouli, 185 38 Piraeus, Greece, or any other branch or financial institution designated by the Agent from time to time at its sole discretion;

“Accounting Information” means the annual audited accounts for the Guarantor to be provided to the Agent in accordance with Clause 11.6 (a) of this Agreement (as the context may require);

“Accounts Pledges” means, together, the deed or deeds of pledge creating security over the Earnings Account, the Retention Account, the Cash Collateral Account, to be executed by the Borrower or, as the case may be, the Guarantor, or the Approved Manager or any other entity acceptable to the Agent in favour of the Lenders and/or Security Trustee and/or the Account Bank, in such form as the Agent may approve or require in compliance always with the laws governing same;

“Affiliate” **** means a subsidiary of that person or a parent company of that person or any other subsidiary of that parent company;

“Agency and Trust Deed” means the agency and trust deed executed or to be executed between the Borrower, the Lenders, the Arranger, the Account Bank the Agent and the Security Trustee, in such form as the Agent may approve or require, as the same may from time to time be amended and/or supplemented;

“Agent” means EUROBANK S.A., having its registered office at 8, Othonos Street, Athens, Greece and acting through its office at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece or any successor of it appointed under clause 5 of the Agency and Trust Deed;

“Applicable Margin” means:

(a)	two point per cent (2.00%) per annum on the amount of the Loan outstanding as the same may be reduced by the Sustainability Pricing Adjustment in accordance with Clause 5.10 (Sustainability Pricing Adjustment); or
(b)	if a Cash Collateral is standing to the credit of the Cash Collateral Account:
---	---
(i)	one percent (1%) per annum on the amount of the Loan which is equivalent to the Cash Collateral standing to the credit of the Cash Collateral Account at any relevant time (on a dollar for dollar basis for the same rollover period as the Loan) and pledged in favour of the Lenders or the Security Trustee; and
---	---
(ii)	two point per cent (2.00%) per annum on the amount of the Loan outstanding minus the Cash Collateral, as the same may be reduced in accordance with Clause 5.10 (Sustainability Pricing Adjustment);
---	---

“Approved Flag” means the flag of the Republic of the Marshall Islands or such other flag as the Agent may, in its sole and absolute discretion, approve as the flag on which the Ship shall be registered;

“Approved Flag State” means the Republic of the Marshall Islands or any other country in which the Agent may, in its sole and absolute discretion, approve that the Ship be registered;

“Approved Manager” means for the time being EUROBULK LTD, **** a company lawfully incorporated in, and validly existing under the laws of, the Republic of Liberia, whose registered office is at 80, Broad Street, Monrovia, Liberia and having an office established in Greece (at 4, Messogiou & Evropis Street, 151 24, Maroussi, Greece) pursuant to the Greek laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof) or any other company appointed by the Borrower with the prior written consent of the Agent (such consent not to be unreasonably withheld) from time to time as the commercial, technical and operational manager of the Ship;

“Approved Manager’s Undertaking-Assignment” means, in relation to the Ship, a letter of undertaking executed or (as the context may require) to be executed **** by the Approved Manager in favour of the Security Trustee for the Ship in the terms reasonably required by the Security Trustee, agreeing certain matters in relation to the Approved Manager and subordinating the rights of the Approved Manager against the Ship and the Borrower to the rights of the Creditor Parties under the Finance Documents and incorporating also a first priority assignment of all the rights which the Approved Manager may have in the Insurances relating to the Ship (other than the right to be reimbursed for P&I claims under the “pay and be paid” rule), in such form as the Agent, acting on the instructions of the Majority Lenders, may approve or require, as the same may from time to time be amended and/or supplemented; ****

“Arranger” means EUROBANK S.A., having its registered office at 8, Othonos Street, Athens, Greece and acting through its office at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece;

“Asset Cover Ratio” means one hundred and twenty per cent (120%) of the outstanding balance of the Loan;

“Availability Period” means the period commencing on the date of this Agreement and ending on:

(a)	the Latest Permissible Drawdown Date or such later date as the Lenders may agree with the Borrower; or
(b)	if earlier, the date on which the Commitment is fully borrowed, cancelled or terminated;
---	---

“Bail-In Action” means the exercise of any Write-down and Conversion Powers;

“Bail-In Legislation” means:

(a)	in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
(b)	in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;
---	---

“Basel II” means:

(a)	(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel II: International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 as amended, supplemented or restated; and
(b)	(b) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel II";
---	---

“Basel III” means:

(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 the Borrower as specified in the beginning of this Agreement;

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in Athens, Piraeus, and New York City and, in relation to the fixing of an interest rate, which is a US Government Securities Business Day;

“Cash Collateral” means, at any relevant time, all sums standing to the credit of the Cash Collateral Account for the whole of an Interest Period in respect of which the Applicable Margin has been calculated and pledged in favour of the Lenders or the Security Trustee, at the Borrower’s option and which may be released in whole or in part at the request of the Borrower, provided always that no Event of Default has occurred which is continuing or would occur as a result of any such release;

“Cash Collateral Account” means an account and fixed time deposit account connected thereto or its renewals in the name of the Borrower and/or the Guarantor or the Approved Manager or any other entity acceptable to the Agent, as the case may be, with the Account Bank designated by the Agent as the Cash Collateral Account where any Cash Collateral is or may be deposited, at Borrower’s option, throughout the Security Period;

“Charged Property” means all of the assets of the Borrower or any other Security Party which from time to time are, or are expressed or intended to be, the subject of the Finance Documents;

“Charter” means, in relation to the Ship, any charter or other contract of employment whether already in existence, or not, of more than twelve months’ duration (taking into account any options to extend or renew contained therein) in respect of the employment of the Ship acceptable to the Agent;

“Charter Assignment” means in relation to any Charter, a first priority assignment of any rights granted by the Borrower in favour of the Security Trustee, **** in such form as the Agent, acting on the instructions of the Majority Lenders, may approve or require, as the same may from time to time be amended and/or supplemented and respective notices of assignment and acknowledgements thereof;

“Charterer” **** in respect of any Charter, means a first class charterer in the opinion of the Agent and acceptable to the Agent in its discretion, the Agent’s approval not to be unreasonably withheld;

“Classification Society” **** means in respect of the Ship, DNV or such other classification society which the Agent shall, at the request of the Borrower, have agreed in writing and shall be treated as the Classification Society of the Ship for the purpose of the Finance Documents;

“Code” means the United States Internal Revenue Code of 1986 (as amended);

“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);

“Commitment Fee” **** means the fee to be paid by the Borrower to the Agent pursuant to Clause 20.1 (b);

“Commitment Letter” **** means the commitment letter dated 12 October 2023 addressed by the Agent to the Approved Manager duly accepted by the Borrower and the Guarantor on the same day;

“Compliance Certificate” means a certificate referring to a compliance date in the form set out in Schedule 5 (or in any other form which the Agent approves) to be provided together with the financial accounts provided in accordance with Clauses 11.7 and 12.8;

“Compliance Date” means 31 December of each calendar year (or such other dates as the Agent may agree pursuant to Clause 12.8);

“Contractual Currency” has the meaning given in Clause 21.5;

“Contribution” means, in relation to a Lender, the part of the Loan which is owing to that Lender;

“CRD IV” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC;

“Creditor Party” means the Agent, the Security Trustee, the Arranger, the Account Bank and any Lender, whether as at the date of this Agreement or at any later time;

“CRR” means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

“DAC6” means the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU or any replacement legislation applicable in the United Kingdom;

“Delivery” means the delivery of the Ship from the Sellers thereof to, and the acceptance of the Ship by, the Borrower pursuant to the MOA;

“Delivery Date” means the date upon which the Delivery of the Ship occurs;

“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code;

“Dollars” and “$” means the lawful currency for the time being of the United States of America;

“Drawdown Date” means the date, being a Business Day falling not later than the Latest Permissible Drawdown Date on which the Loan is or, as the context may require, shall be advanced to the Borrower;

“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 the Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or (as the case may be) to the Security Trustee pursuant to the General Assignment or the Charter Assignment and which arise out of the use or operation of the Ship, including (but not limited to):

(a)	all freight, hire and passage moneys, compensation payable to the Borrower or (as the case may be) to the Security Trustee pursuant to the General Assignment in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;
(b)	all moneys which are at any time payable under Insurances in respect of loss of earnings;
---	---
(c)	contributions of any nature whatsoever in respect of general average; and
---	---
(d)	if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above 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;
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“Earnings Account” means, in relation to the Ship, the account(s) and fixed time deposit account connected thereto or its renewals opened or to be opened in the name of the Borrower with the Account Bank, which is designated by the Agent, as an Earnings Account(s) for the Ship for the purposes of this Agreement;

“EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway;

“Environmental Approval” means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to the Ship or her operation or the carriage of cargo and/or passengers thereon and/or provisions of goods and/or services on or from the Ship required under any Environmental Law;

“Environmental Incident” means:

(a)	any release of Environmentally Sensitive Material from the Ship; or
(b)	any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager 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 the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where the Borrower 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;
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“Environmental Claim” means any and all enforcement, clean up, removal or other governmental or regulatory actions or orders instituted or completed pursuant to any Environmental Law or any Environmental Approval together with claims made by any third party relating to damage, contribution, loss or injury, resulting from any actual or threatened emission, spill, release or discharge of an Environmentally Sensitive Material from the Ship;

“Environmental Laws” means all national, international and state laws, rules, regulations, treaties and conventions applicable to any vessel owned, managed or crewed by or chartered to any Security Party pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage of Environmentally Sensitive Material and actual or threatened emissions, spills, releases or discharges of Environmentally Sensitive Material from the Ship;

“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;

“EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

“Evaluation Costs and Expenses” **** means the amounts to be paid by the Borrower under Clause 20.1 (a) hereof; ****

“Event of Default” means any of the events or circumstances described in Clause 19.1;

“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 any treaty, law, regulation or other official guidance referred to in 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 Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA;

“FATCA Exempt Party” means a Party 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, if any Creditor Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction;

“Final Maturity Date” means six (6) years after the Drawdown Date;

“Finance Documents” means:

(a)	this Agreement;
(b)	the Agency and Trust Deed;
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(c)	the Guarantee;
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(d)	the Accounts Pledges;
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(e)	the Mortgage;
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(f)	the General Assignment;
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(g)	any Charter Assignment;
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(h)	the Approved Manager’s Undertaking;
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(i)	the Guarantor’s Undertaking-Assignment; and
---	---
(j)	any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower 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 under this Agreement or any of the documents referred to in this definition;
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“Financial	Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:
---	---
(a)	for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
---	---

(b)	under any loan stock, bond, note or other security issued by the debtor;
(c)	under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
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(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; 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 (a) to (e) if the references to the debtor referred to the other person;
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“Financial Year” means, in relation to the Borrower, each period of 1 year commencing on 1 January thereof in respect of which its accounts are or ought to be prepared;

“Funding Rate” means an individual rate notified by the Lenders to the Borrower pursuant to paragraph (b) of Clause 5.4;

“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 the Ship, a first priority deed of assignment collateral to the Mortgage registered or to be registered thereon, executed or (as the context may require) to be executed by the Borrower in favour of the Security Trustee, whereby the Borrower shall assign to the Security Trustee the Insurances, the Earnings and any Requisition Compensation of the Ship, in such form as the Agent (acting on the instructions of the Majority Lenders) may approve or require, as the same may from time to time be amended and/or supplemented and respective notices of assignment and acknowledgements thereof;

“Group” means the Guarantor and its subsidiaries (including the Borrower);

“Guarantee" means the guarantee and indemnity given or, as the context may require, to be given by the Guarantor in favour of the Security Trustee in form and substance satisfactory to the Agent, as security for the Secured Liabilities and any and all obligations of the Borrower under this Agreement;

“Guarantor” **** means EURODRY LTD. being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any other legal entity nominated by the Borrower and accepted by the Agent which have, or as the context may require, shall or may at any time guarantee the obligations of the Borrower under this Agreement and/or those of the other Security Parties to the Lenders and/or any other Creditor Party;

“Guarantor’s Undertaking-Assignment” **** means, in relation to the Ship, an undertaking to the Security Trustee in respect of the Ship executed or (as the context may require) to be executed by the Guarantor, being nominated as co-assured in the insurance policies for the Ship whereby the Guarantor would undertake throughout the Security Period, to subordinate any and all claims it may have against the Borrower and/or the Ship to the claims of the Lenders under the Loan Agreement and the Finance Documents and would incorporate also a first priority assignment of all the rights which the Guarantor may have in the Insurances relating to the Ship (other than the right to be reimbursed for P&I claims under the “pay and be paid” rule);

“IACS” means the International Association of Classification Societies;

“Insurances” means, in relation to the Ship:

(a)	all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, which are effected in respect of the Ship, the Earnings or otherwise in relation to the 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;
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“Interest Payment Date” means in respect of the Loan or any part thereof in respect of which a separate Interest Period is fixed the last day of the relevant Interest Period and in case of any Interest Period longer than three (3) months the date(s) falling at successive three (3) monthly intervals during such longer Interest Period and the last day of such Interest Period;

“Interest Period” means in relation to the Loan or any part thereof, each period for the calculation of interest in respect of the Loan ascertained in accordance with Clause 6;

(a)	either:

(i) the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or

(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for a day which is no more than six US Government Securities Business Days (and no less than three US Government Securities Business Days) before the Quotation Day; and

(b)	the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;

(a)	either:

(i) the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or

(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for the day which is three US Government Securities Business Days before the Quotation Day; and

(b)	the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) (as amended by MSC 104 (73)) and A.913(22) (superseding Resolution A.788(19)), as the same may be amended, supplemented or superseded 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 adopted by the International Maritime Organisation (as the same may be amended, supplemented or superseded from time to time);

“ISSC” means a valid and current International Ship Security Certificate issued under the ISPS Code;

“Latest Permissible Drawdown Date” means the 30^th^ October 2023, being the latest date for drawdown of the Loan pursuant to Clause 4 hereof;

“Lender” means, subject to Clause 26.6:

(a)	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 Borrower under Clause 26.14), its successor or assign, unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

(b)	the holder for the time being of a valid Transfer Certificate;

“Major Casualty” means, in relation to the 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 $750,000 or the equivalent in any other currency;

“Majority Lenders” means:

(a)	before the Loan has been made, Lenders whose Commitments are equal to or greater than 66 ⅔ per cent. of the Total Commitments; and
(b)	after the Loan has been made, Lenders whose Contributions are equal to or greater than 66 ⅔ per cent. of the Loan;
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“Management Agreement” **** means the agreement made between the Borrower and the Approved Manager providing (inter alia) for the Manager to manage the Ship);

“Mandatory Costs” shall have the meaning given to it in Clause 21.8;

“Market Disruption Rate” means the Reference Rate;

“Market Value” means, in relation to the Ship, the market value of the Ship determined not earlier than one month prior to the Drawdown Date and at least once a year thereafter by one separate, independent and reputable first class sale and purchase broker, appointed by and reporting to the Agent certifying the market value of the Ship on the basis set out in Clause 15.4 at the expense of the Borrower in accordance with Clause 15.4 and 15.9 hereof; ****

“Material Adverse Change” means any event or series of events which, in the reasonable opinion of the Majority Lenders, has or will have a Material Adverse Effect;

“Material Adverse Effect” means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:

(a)	the business, operations, property, condition (financial or otherwise) or prospects of the Borrower or any other Security Party (other than the Approved Manager, only in the case Clause 5.9 is not applicable); or
(b)	the ability of the Borrower or any other Security Party (other than the Approved Manager, only in the case Clause 5.9 is not applicable) to perform its respective obligations under 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 pursuant to any of the Finance Documents or the rights or remedies of any Creditor Party under any of the Finance Documents;
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“Maximum Facility Amount” means an amount equal to the lesser of (i) $10,500,000 and (ii) 50% of the Market Value of the Ship; ****

“Minimum Liquidity” means free and unencumbered (other than in favour of the Lender(s)/Lender(s)’s banking group or the Agent or the Account Bank) minimum liquidity balances in aggregate of at least Three Hundred Thousand Dollars ($300,000), including but not limited to any amounts held in the Cash Collateral Account which is to be held from the Drawdown Date and at all times thereafter during the Security Period in the form of cash deposited in an account or accounts opened or to be opened with the Lender(s)/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrower or the Guarantor or any other entity acceptable to the Agent to be assessed on an annual average basis;

“MOA” means the memorandum of agreement dated 8 September 2023, as amended by Addendum No 1 thereto dated 2 October 2023 and Addendum No 2 thereto dated 2 October 2023 entered into between the Sellers, as sellers Eurobulk Ltd as original buyers and the Borrower as nominated buyers, in respect of the sale by such Sellers and the purchase by the Borrower of the Ship and any and all further Addenda thereto;

“month” means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (i) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (ii) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and “months” and “monthly” shall be construed accordingly;

“Mortgage” means, in relation to the Ship, the first priority or first preferred ship mortgage (as the case may be) on the Ship executed or to be executed by the Borrower in favour of the Security Trustee under an Approved Flag (and Deed of Covenant collateral thereto if applicable), in such form as the Security Trustee may approve or require, as the same may from time to time be amended and/or supplemented;

“Net Worth” **** means the value of the total assets of the Guarantor minus total liabilities, as expressed in its financial statements; ****

“Notifying Lender” has the meaning given in Clause 23.1;

“Operator” means any person who is from time to time during the Security Period concerned in the operation of the Ship and falls within the definition of “Company” set out in rule 1.1.2. of the ISM Code;

“Protocol of Delivery and Acceptance” means the protocol of delivery and acceptance in respect of the Ship executed and delivered or (as the context may require) to be executed and delivered by or on behalf of the Sellers and the Borrower, evidencing the delivery and acceptance of the Ship pursuant to the MOA, such protocol to be in a form satisfactory to the Agent;

“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union;

“Party” means a party to this Agreement or a Finance Document (together the “Parties”);

“PATRIOT Act” means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

“Payment Currency” has the meaning given in Clause 21.5;

“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;
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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 the Ship not prohibited by this Agreement;
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(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 the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(h);
---	---
(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 where the 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;
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“Potential Event of Default” means an event or circumstance which, with the giving of any notice, the lapse of time and/or the satisfaction of any other condition, would constitute an Event of Default;

“Purchase Price” means in relation to the Ship, the price to be paid the Borrower to the Sellers pursuant to the terms of the MOA or such other sum as is determined in accordance with the terms and conditions of the MOA;

“Reference Rate” means, in relation to the Loan or any part of the Loan:

(a)	the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or

(b)	as otherwise determined pursuant to Clause 7,

and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero;

“Relevant Jurisdiction” means, in relation to the Borrower or any other Security Party:

(a)	its jurisdiction of incorporation;
(b)	any jurisdiction where any Charged Property owned by it is situated;
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(c)	any jurisdiction where it conducts its business; and
---	---
(d)	any jurisdiction whose laws govern the perfection of any of the Finance Documents entered into by it;
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“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them;

“Relevant Market” means the market for overnight cash borrowing collateralised by US Government Securities;

“Repayment Date” means a date on which a repayment is required to be made under Clause 8;

“Repayment Instalment” means each instalment of the Loan which becomes due for repayment by the Borrower on a Repayment Date pursuant to 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”;

“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers;

“Restricted Party” means a person that is:

(a)	listed on, owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; or
(b)	located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person located in or organised under the laws of a Sanctioned Country; or
---	---
(c)	otherwise a target of Sanctions ("target of Sanctions" signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed);
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“Retention Account” means an interest bearing account in the name of the Borrower with the Lenders and/or the Account Bank, or any other account which is designated by the Agent as the Retention Account at its discretion for the purposes of this Agreement;

“Sanctioned Country” means a country or territory that is, or whose government is, the target of Sanctions broadly prohibiting dealings with such government, country or territory (currently including, without limitation, Cuba, Iran, North Korea, Crimea, and Syria);

“Sanctions” means any economic, financial or trade sanctions laws, regulations, embargoes or other restrictive measures adopted, administered, enacted or enforced by any Sanctions Authority and/or any other body notified from time to time in writing to the Borrower by the Agent, or otherwise imposed by any law or regulation to which the Borrower, any other Security Party and the Lenders are subject (which shall include without limitation, any extra-territorial sanctions imposed by law or regulation of the United States of America);

“Sanctions Authorities” means together:

(a)	the United States government;
(b)	the United Nations Security Council;
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(c)	the European Union or its member states ;
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(d)	the United Kingdom; or
---	---
(e)	the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, and Her Majesty's Treasury (HMT);
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“Sanctions List” means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, any list maintained by OFAC within its “the Consolidated Sanctions List”, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities;

“Secured Liabilities” means all liabilities which any Security Party, at the date of this Agreement or at any later time or times, has under or by virtue of any Finance Document and in the case of the Approved Manager under or by virtue of the Approved Manager’s Undertaking-Assignment or by virtue of the Account Pledge on the Cash Collateral Account if same is opened in the name of the Approved Manager 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 Interest” means:

(a)	any 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 the 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 (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;
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“Security Party” means the Borrower, the 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 paragraph (j) of the definition of “Finance Documents”;

“Security Period” means the period commencing on the date of this Agreement and ending on such date as all obligations whatsoever of all of the Security Parties under or pursuant to the Finance Documents whensoever arising have been irrevocably paid, performed and/or complied with;

“Security Trustee” means EUROBANK S.A., having its registered office at 8, Othonos Street, Athens, Greece and acting through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece or any successor of it appointed under clause 5 of the Agency and Trust Deed;

“Sellers” means the entity specified as “Sellers” in the MOA;

“Ship” means the m.v “Galileo” the 2014 built bulk carrier of 35,873.00 gross tons and 21,223.00 net tons, with IMO 9698317, currently registered under the British flag in the ownership of the Sellers, which upon acquisition by the Borrower shall be registered in its ownership under the laws and flag of the Republic of the Marshall Islands under the name “YANNIS PITTAS”;

“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate);

“Specified Time” means a day or time determined in accordance with Schedule 7 (Timetables);

“Total Loss” means:

(a)

actual, constructive, compromised, agreed or arranged total loss of the Ship;

(b)

any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than her proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, excluding a requisition for hire unless she is within 40 days redelivered to the full control of Borrower;

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(c)	any arrest, capture, seizure or detention of the Ship unless she is within 40 days redelivered to the full control of Borrower;
(d)	any hijacking or theft of the Ship unless she is within 6 months redelivered to the full control of the Borrower;
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“Total Loss Date” means:

(a)	in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;
(b)	in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of:
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(i)	the date on which a notice of abandonment is given to the insurers; and
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(ii)	the date of any compromise, arrangement or agreement made by or on behalf of the Borrower, with the Ship's insurers in which the insurers agree to treat the 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, provided that the Agent shall notify the Borrower of such date as soon as practicable;
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“Transfer Certificate” has the meaning given in Clause 26.2;

“Trust Property” has the meaning given in clause 3.1 of the Agency and Trust Deed;

“UK Bail-In Legislation” **** means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 BRRD) Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their Affiliates (otherwise than through liquidation, administration or other insolvency proceedings);

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower or a Security Party under the Finance Documents;

"US Government Securities Business Day" means any day other than:

(a)	a Saturday or a Sunday; and
(b)	a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities;
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“US Tax Obligor” means:

(a)	the Borrower which is resident for tax purposes in the United States of America; or
(b)	a Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes;
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“VAT" means:

(a)	any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(b)	any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere;
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“Write-down and Conversion Powers” means:

(a)	in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b)	in relation to any other applicable Bail-In Legislation:
---	---
(i)	any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or Affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---
(ii)	any similar or analogous powers under that Bail-In Legislation; and
---	---
(c)	in relation to any UK Bail-In Legislation:
---	---
(i)	(i) any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or Affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---

(ii)	any similar or analogous powers under that UK Bail-In Legislation.
1.3	Construction of certain terms. In this Agreement:
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“approved” means, for the purposes of Clause 13, 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 corporation, partnership, joint venture and unincorporated association;

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

“document” includes a deed; also a letter, fax or electronic mail;

“excess risks” means 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 her 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 tax including VAT;

“law” includes any form of delegated legislation, any order or decree, 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;

a Lender's "cost of funds" in relation to its participation in the Loan (or any part of the Loan) is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan (or that part of the Loan) for a period equal in length to the Interest Period of the Loan (or that part of the Loan);

“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 1.4;

“obligatory insurances” means all insurances effected, or which the Borrower is obliged to effect, under Clause 13 below or any other provision of this Agreement or another Finance Document;

“parent company” has the meaning given in Clause 1.5;

“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 therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision in the Norwegian Marine Insurance Plan;

“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 1.5;

“successor” includes any person who is entitled (by assignment, novation, merger or otherwise) to any other 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 24 of the Institute Time Clauses (Hulls) (1/10/83) or clause 25 of the Institute Time Clauses (Hulls) (1/11/1995).

1.4	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
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(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.

1.5	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
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(b)	P has direct or indirect control over a majority of the voting rights attached to the issued shares of S; or
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(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.

1.6	General Interpretation.
(a)	In this Agreement:
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(i)	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;
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(ii)	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; and
---	---
(iii)	words denoting the singular number shall include the plural and vice versa.
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(b)	Clauses 1.1 to 1.5 and paragraph (a) of this Clause 1.6 apply unless the contrary intention appears.
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(c)	References in Clause 1.2 to a document being in the form of a particular Schedule or Appendix include references to that form with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.
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(d)	The clause headings shall not affect the interpretation of this Agreement.
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(e)	This Agreement contains the entire agreement of the parties and its provisions supersede the provisions of the Commitment Letter any and all other prior correspondence and oral negotiation by the parties in respect of the matters regulated by this Agreement.
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1.7	Event of Default. A Potential Event of Default and/or an Event of Default are “continuing” if either of them has not been remedied or waived in writing.
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2.	LOAN
---	---
2.1	Amount of loan. Subject to the satisfaction of all conditions precedent and in reliance on the representations and warranties made in or in accordance with them and furthermore subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower in one (1) advance a principal amount being the lesser of (i) $10,500,000 and (ii) 50% of the Market Value of the Ship.
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2.2	Lenders' participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.
2.3	Purpose of Loan. The Borrower undertakes with each Creditor Party to use the Loan only for the purpose stated in Clause 1.1 to this Agreement.
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2.4	Application of Proceeds. The Lenders shall have no responsibility for the application of the proceeds of the Loan (or any part thereof) by the Borrower.
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2.5	Duration of Lenders’ commitment. The Lenders will be under no liability to advance their respective Commitments or any part of them after the date of the expiry of the Availability Period, whereas any part of the Commitment undrawn and not cancelled at close of business on the date of expiry of the Availability Period shall automatically be cancelled.
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2.6	Borrower’s right of cancellation
---	---
2.6.1	The Borrower shall be entitled to cancel the Loan under this Agreement upon giving the Lender not less than ten (10) days’ notice in writing to that effect.
---	---
2.6.2	Any notice of cancellation once given by the Borrower shall be irrevocable whereas any amount cancelled may not be drawn.
---	---
2.6.3	Notwithstanding any cancellation pursuant to sub-clause 2.6.1, the Borrower shall continue to be liable for any and all amounts due to the Lenders under this Agreement, including without limitation any amounts due under Clause 24 (Increased Costs).
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3.	POSITION OF THE LENDERS
---	---
3.1	Interests of Lenders several. The rights of the Lenders under this Agreement (but without prejudice to the provisions of this Agreement relating to or requiring action by the Majority Lenders) are several; accordingly each Lender shall have the right to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender and/or any other Creditor Party to be joined as an additional party in any proceedings for this purpose.
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3.2	Independent action by a Lender. None of the Lenders shall enforce, exercise any rights, remedies or powers or grant any consents or releases under or pursuant to, or otherwise have a direct recourse to the security and/or guarantees constituted by any of the Finance Documents without the prior written consent of the Majority Lenders but, provided such consent has been obtained, it shall not be necessary for any other Lender to be joined as an additional party in any proceedings for this purpose.
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3.3	Obligations of Lenders several. The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement to which it is a party shall not result in:
(a)	the obligations of the other Lenders being increased; nor
---	---
(b)	the Borrower, any Security Party, any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
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and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.

3.4	Parties bound by certain actions of Majority Lenders. Every Lender and any other Creditor Party, the Borrower and each Security Party shall be bound by:
(a)	any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;
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(b)	any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document;
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(c)	any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.
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3.5	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.
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3.6	Construction. In Clauses 3.4 and 3.5 references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.
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4.	DRAWDOWN
---	---
4.1	Request for Loan. Subject to the following conditions, the Borrower may request the Loan to be advanced by ensuring that the Agent receives the Drawdown Notice not later than 11.00 a.m. (Athens time) two (2) Business Days prior to the intended Drawdown Date.
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4.2	Availability. The conditions referred to in Clause 4.1 are that:
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(a)	the Drawdown Date has to be a Business Day up to and including the Latest Permissible Drawdown Date; and
---	---
(b)	the amount of the Loan shall not exceed the lesser of (i) $10,500,000 and (ii) 50% of the Market Value of the Ship as determined up to thirty days prior to the Drawdown Date and shall be used for the purposes set out in Clause 1.1 of this Agreement; and
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(c)	the Loan shall be advanced in a single amount;
(d)	the Borrower has complied with the provisions of Clause 9.1 with respect to the Loan.
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4.3	Notification to Lenders of receipt of the Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the Drawdown Notice and shall inform each Lender of:
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(a)	the amount of the Loan drawn down and the Drawdown Date;
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(b)	the amount of that Lender's participation in the Loan; and
---	---
(c)	the duration of the first Interest Period.
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4.4	Drawdown Notice irrevocable. The Drawdown Notice shall specify the amount of the Loan and Business Day upon which same is required to be advanced as well as the proposed duration of the first Interest Period, shall give full details of the place and account to which the proceeds of the Loan are to be paid, which must both be acceptable to the Lenders and shall be signed by a director or an authorised attorney-in-fact of the Borrower, and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.
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4.5	Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on the Drawdown Date under Clause 2.2.
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4.6	Disbursement of Loan. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5 and that payment to the Borrower shall be made to the account which the Borrower specifies in the Drawdown Notice and in the same funds as the Agent received the payments from the Lenders.
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4.7	Disbursement of the Loan to the Sellers. Notwithstanding the foregoing provisions of this Clause 4, in the event that any part of the Loan is required to be drawn down prior to the satisfaction of the conditions precedent set out in Clause 9.1 and remitted in accordance with the relevant clauses of the MOA and an escrow letter dated 20 September 2023 (herein called the “Escrow Letter”) to Watson Farley & Williams LLP (the “Escrow Agent”), the Agent may in its absolute discretion agree to remit such amount to the Escrow Agent prior to the satisfaction of the conditions precedent set out in Clause 9.1 expressly subject to the following conditions:
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(a)	such amount is remitted pursuant to the terms and conditions of the MOA and the Escrow Letter to the Escrow Agent to be held by it to the order of the Agent;
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(b)	the principal amount (the “deposited amount”) of such funds will only be released to the Sellers strictly in accordance with the Agent’s instructions set out in the Escrow Letter;
(c)	the deposited amount so released may be used only for payment to the account of the Sellers in satisfaction of the balance of the Purchase Price of the Ship plus extras; and
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(d)	in the event that:
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(i)	none of the said amount so remitted is released (whether on the expected Delivery Date or thereafter) in accordance with the Escrow Letter or any part thereof is not so released, or
---	---
(ii)	the Escrow Agent fails to remit the said amount in accordance with the Agent’s instructions,
---	---

in case of continued failure of the Escrow Agent to comply with the Agent’s instructions, the Borrower shall forthwith upon demand by the Agent pay to the Agent such amounts that may be certified by the Agent as being the amount required to indemnify the Agent in respect of any cost transferred to the Agent in relation to the deposited amount from the date of payment thereof to the Escrow Agent to the date of disbursement of the deposited amount to the Sellers or the refund of the deposited amount to the Agent less the amount (if any) of the earned interest received by the Agent from the Escrow Agent.

(e)	Without prejudice to the obligations of the Borrower to indemnify the Agent on demand, the Agent shall in good faith take reasonable and proper steps diligently to seek recovery of the deposited amount from the Escrow Agent (provided that prior to taking such action the Borrower shall have agreed to indemnify the Agent for all costs and expenses which may be incurred in seeking recovery of such amount, including, without limitation, all legal fees and disbursements reasonably and properly incurred) and if the Agent shall recover any part of the deposited amount (and provided that it has previously recovered full indemnification under Clause 4.7(d)) the Agent shall, so long as no Event of Default has occurred and is continuing, pay to the Borrower the amount so recovered after subtracting any tax suffered or incurred thereon or expenses incurred by the Agent.
(f)	The Agent shall have no liability whatsoever to the Borrower or any other person for any loss caused by the failure of the Escrow Agent for any reason whatsoever to remit the said amount and any earned interest to the designated account or to comply fully in accordance with the Agent’s instructions.
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(g)	Any amounts remitted by the Escrow Agent to the Agent and returned pursuant to this Clause 4.7 will be applied as follows, and express authority is hereby given by the Borrower to the Agent to make such application, in case the purchase of the Ship has been cancelled or delayed beyond the Cancelling Date (as defined in the MOA) these amounts shall be applied in or towards prepayment of the outstanding indebtedness in full, and the remaining amount (if any) shall be freely available to the Borrower,
---	---

provided that if any such amount so returned is not a part of the amount of the Loan but part of the Borrower’s equity such amount shall be freely available to the Borrower.

The provisions of Clause 8.10 shall apply to any prepayment of the Loan made under this Clause 4.7.

4.8	Satisfaction of Conditions Precedent. Notwithstanding the giving of the Drawdown Notice pursuant to Clause 4.1, the Lenders shall not be obliged to disburse any funds until all the conditions precedent set out in Clause 9.1 have been satisfied, save as provided in Clause 9.2.
4.9	Deemed Indebtedness. The relevant payment by the Agent under Clause 4.6 shall constitute the advancement of the Loan and the Borrower shall thereupon become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.
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5.	INTEREST
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5.1	Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan or any part of the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.
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5.2	Calculation of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan or any part of the Loan in respect of each Interest Period is a percentage rate per annum which is the aggregate of:
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(i)	the Applicable Margin; and
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(ii)	Reference Rate.
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5.3	Payment of accrued interest. The Borrower shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (and, if an Interest Period is longer than 3 months, on the dates falling at three (3) monthly intervals after the first day of the Interest Period).
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5.4	Notification of rates of interest. The Agent shall notify the Borrower and each Lender of:
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(a)	the determination of a rate of interest under this Agreement; and
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(b)	each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
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5.5	Unavailability of Term SOFR
---	---
(a)	Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
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(b)	Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
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(c)	Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of Loan or that part of the Loan.
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(d)	Cost of funds: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 5.7 shall apply to the Loan or that part of the Loan for that Interest Period.
5.6	Market disruption
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If before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 50 per cent (50%) of the Loan or that part of the Loan as appropriate) that its cost of funds relating to its participation in the Loan or that part of the Loan would be in excess of the Market Disruption Rate, then Clause 5.7 shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.

5.7	Cost of funds
(a)	If this Clause 5.7 applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
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(i)	the Applicable Margin; and
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(ii)	the rate notified to the Agent (and the Borrower) 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 its cost of funds relating to its participation in the Loan or that part of the Loan.
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(b)	If this Clause 5.7 applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
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(c)	Subject to Clause 24.7, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
(d)	If paragraph (e) below does not apply and any rate notified to the Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
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(e)	If this Clause 5.7 applies pursuant to Clause 5.6 and
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(i)	a Lender's Funding Rate is less than the Market Disruption Rate; or
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(ii)	a Lender does not notify a rate by the time specified in sub-paragraph (ii) of paragraph (a) above,
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5.8	Break Costs
(a)	The Borrower shall, within three (3) Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
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(b)	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become or may become payable.
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5.9	Applicable Margin.
---	---
(a)	The Borrower may, at his option and subject to:
---	---
(i)	serving a written notice to the Agent not less than 2 Business Days prior to the commencement of an Interest Period (or at any other time during an Interest Period as the Agent may agree in its absolute discretion) (the "Commencement Date"); and
---	---
(ii)	no Event of Default having occurred; and
---	---
(iii)	no Event of Default resulting from the relevant application,
---	---

credit or procure that the Cash Collateral Account be credited with the Cash Collateral and apply the Cash Collateral or procure the application of the Cash Collateral on the Commencement Date in reducing the Margin to 1.00 per cent. (1%) per annum and such reduced Margin shall apply to an amount of the Loan equal to the Cash Collateral for a duration to be agreed between the Borrower and the Agent but having the same duration of an Interest Period of the Loan (the "Fixing Period") which should be the same for both the Loan and the Cash Collateral on or prior to the relevant Commencement Date. The Cash Collateral (or any part thereof) may only be withdrawn or transferred at the end of any Fixing Period;

(b)	If the Borrower, or as the case may be, the Approved Manager or any other entity in whose name the Cash Collateral Account is opened withdraws or transfers the Cash Collateral (or any part thereof) prior to the end of a Fixing Period in accordance with paragraph (a) above or otherwise with the Agent's prior consent, the Margin for the amount of the Loan equal to the Cash Collateral which has been withdrawn or transferred will revert to the Margin which applies at that time in accordance with the terms of the Loan Agreement and the Borrower will indemnify the Lenders on demand in respect of all breakage costs which result from such withdrawal or transfer effected prior to the end of a Fixing Period.
5.10	Sustainability pricing adjustment
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5.10.1	On the first day of each Pricing Adjustment Period, the Applicable Margin (initially of 2.00% per annum) applicable to the Loan outstanding shall be reduced by up to 0.05% (zero point zero five percent) per annum, in case (i) the Ship’s CII Rating for the previous year remains at least “C”, and shall remain at least “C” for the whole duration of such Pricing Adjustment Period, (ii) the Ship’s Reported EEOI for the same period is 9,25gCO2 per cargo ton transported/nautical mile or less and (iii) the Borrower shall have at least two (2) of its directors being female (the “Sustainability Pricing Adjustment”);
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5.10.2	At the expiry of a Pricing Adjustment Period the Applicable Margin to the Loan shall revert to 2.00% per annum.
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5.10.3	The Sustainability Pricing Adjustment applicable to the Loan shall at no time exceed 0.05% per annum for the duration of the Security Period and shall not be reduced further during a subsequent Pricing Adjustment Period and for the avoidance of doubt, a Sustainability Pricing Adjustment can only occur once per calendar year.
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5.10.4	If an Event of Default occurs, the Sustainability Pricing Adjustment shall no longer apply and the Applicable Margin of 2.00% per annum shall apply instead.
5.10.5	In this Clause 5.10:
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“CII” **** means Carbon Intensity Indicator, as provided in the MARPOL Carbon Intensity Regulations;

“CII Rating” **** means the Ship’s attained operational carbon intensity rating, expressed as a rating from A-E in a calendar year, as calculated in accordance with the MARPOL Carbon Intensity Regulations.

“EEOI” **** means Energy Efficiency Operational Index as per IMO MEPC.1/Circ.684, 2009;

“Reported EEOI” **** is the operational efficiency of the Ship quantified by measuring the annual average carbon intensity of the Ship per transport work which is reported annually in gCO2 per ton of cargo shipped/nautical mile travelled and it is verified by the company’s approved Classification Society or other competent authority in respect of the Ship or in case said entities are unable to provide such a verification by the Approved Manager.

“Pricing Adjustment Period” **** means, the period commencing on the first day of the Interest Period after a Sustainability Performance Certificate related to the Ship has been delivered to the Agent and ending on the first anniversary thereof provided that the last such period may last only few months as it will reach the Final Maturity Date;

“Sustainability Performance Certificate” **** means a certificate in the form set out in Schedule 6 (Form of Sustainability Performance Certificate) signed by a director of the Borrower or the Chief Executive Officer or Chief Financial Officer of the Guarantor, that shows the Ship’s CII Rating and sets forth the Ship’s CII Rating, and Reported EEOI certified by the approved classification society or other competent authority in respect of the Ship.

“Sustainability Period” **** means, in respect of the Ship, the period commencing on the 1^st^ January 2024 and ending on the 31^st^ December 2024 and each subsequent 12-month period thereafter.

5.10.6	If any confirmation, representation or statement made under or in connection with any Sustainability Performance Certificate is or proves to have been incorrect or misleading in any material respect when made, the Applicable Margin shall revert to 2.00% per annum (if necessary with retrospective effect from the applicable Pricing Adjustment Period).

6.	INTEREST PERIODS
6.1	Selection of Interest Periods
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(a)	The Borrower may select the Interest Period for the Loan in the Drawdown Notice. Subject to paragraphs (f) and (h) below and Clause 6.2, the Borrower may select each subsequent Interest Period in respect of the Loan in a selection notice.
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(b)	Each selection notice is irrevocable and must be delivered to the Agent by the Borrower not later than the Specified Time.
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(c)	If the Borrower fails to select an Interest Period in the Drawdown Notice or fails to deliver a selection notice to the Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to Clause 6.2, be three (3) Months.
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(d)	Subject to this Clause 6, the Borrower may select an Interest Period of three (3) or six (6) Months or such longer or shorter period as the Agent may, in its sole discretion, agree with the Borrower.
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(e)	An Interest Period in respect of the Loan shall not extend beyond the final Repayment Date.
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(f)	In respect of a Repayment Instalment, the Borrower may request in the relevant selection notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
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(g)	The first Interest Period for the Loan shall start on the Drawdown Date and, subject to paragraph (h) below, each subsequent Interest Period shall start on the last day of its preceding Interest Period.
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(h)	Except for the purposes of paragraph (f) above and Clause 6.2, the Loan shall have one Interest Period only at any time.
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6.2	Changes to Interest Periods
---	---
(a)	In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Agent may establish an Interest Period that is shorter than the Interest Period selected in the relevant selection notice for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant selection notice, subject to paragraph 6.1.(d) of Clause 6.1. ****
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(b)	If the Agent makes any change to an Interest Period referred to in this Clause 6.2, it shall promptly notify the Borrower and the Lenders.
6.3	Non-Business Days
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If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
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7.	DEFAULT INTEREST
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(a)	If the Borrower or a Security Party fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the relevant due date for payment thereunder, that is: (i) the date on which such Finance Documents provide that such amount is due for payment; or (ii) if a Finance Document provides that such amount is payable on demand, three (3) days following the date on which the demand is served; or (iii) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable, up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two point five per cent. (2.5%) per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this Clause 5.3 shall be immediately payable by the Borrower and the Security Parties on demand by the Agent.
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(b)	If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
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(i)	the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
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(ii)	the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two and a half per cent (2.5%) per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
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(c)	Default Interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
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8.	REPAYMENT AND PREPAYMENT
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8.1	Amount of repayment instalments. The Borrower shall repay the Maximum Facility Amount by twenty four (24) consecutive equal quarterly instalments, each being in the amount of two hundred fifty thousand Dollars ($250,000), followed by a balloon payment of four million five hundred thousand Dollars ($4,500,000) (the “Balloon Instalment”).
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8.2

Repayment Dates. The first instalment of the Loan shall be repaid on the date falling three (3) months after the Drawdown Date and each subsequent instalment shall be repaid at three monthly intervals thereafter and the Balloon Instalment shall be repaid concurrently with the twenty fourth (24^th^) and final repayment instalment, which shall be repaid on the final Repayment Date being the date falling on the Final Maturity Date,

Provided always that if the amount of the Loan drawn down hereunder is less than $10,500,000 then the amount of the repayment instalments and of the Balloon Instalment shall be reduced on a pro rata basis.

8.3	Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to the Lenders 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 part of the Loan on the last day of an Interest Period.
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8.5	Conditions for voluntary prepayment. The conditions referred to in Clause 8.4 are that:
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(a)	a partial prepayment shall be in the minimum amount of One Hundred Thousand Dollars ($100,000) or a multiple thereof;
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(b)	the Agent has received from the Borrower at least ten (10) Business Days prior written confirmative and irrevocable notice specifying the amount to be prepaid in connection with the Loan and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period); and
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(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.
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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 authority 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.
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8.7	Notification of notice of prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.5(c).
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8.8	Mandatory prepayment. The Borrower shall be obliged to prepay the Loan in full together with accrued interest to the date of prepayment and all other sums payable by the Borrower to the Lenders pursuant to this Agreement and the other Finance Documents (and if the Commitment or any portion thereof has not been drawn yet, it shall be reduced to zero) if the Ship is sold (provided that no Event of Default has occurred and is continuing and then, subject to the prior written consent of the Agent, not to be unreasonably withheld), refinanced by another bank or financial institution or becomes a Total Loss:
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(a)	in the case of a sale of the Ship (whether for further trading or scrapping), on the earlier of (i) the date on which the sale is completed by delivery of the Ship to the buyer and (ii) the date of receipt by the Borrower of the sale proceeds; or
(b)	in the case of a refinancing of the Ship, on or before the date on which the refinancing takes place; or
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(c)	in the case of a Total Loss of the Ship, on the earlier of (i) the date falling one hundred eighty (180) days after the Total Loss Date and (ii) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.
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8.9	Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 below or otherwise) in respect of the Loan and, together with any sums payable under Clause 21.2) but, subject to Clause 5.8, without premium or penalty.
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8.10	Application of partial prepayment. Each voluntary partial prepayment shall be applied at the Borrower’s option against the repayment instalments of the Loan specified in Clause 8.1 and the Balloon Instalment.
8.11	No reborrowing. No amount prepaid or repaid may be re-borrowed.
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9.	CONDITIONS PRECEDENT – Conditions SUBSEQUENT
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9.1	Documents, fees and no default. Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:
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(a)	that, on or before the date of signing of this Agreement, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
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(b)	that, on or before the date of drawdown of the Loan, the Lender receives the documents described in Part B in Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
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(c)	that, on or before the service of the Drawdown Notice, the Agent receives the fees payable pursuant to Clause 20.1 (a) and has received payment of the expenses referred to in Clause 20.2;
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(d)	that at the date of the Drawdown Notice, at the Drawdown Date and on the first day of each Interest Period and on the date of each Compliance Certificate:
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(i)	no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;
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(ii)	the representations and warranties in Clause 10 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading in any material respect if repeated on each of those dates with reference to the circumstances then existing;
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(iii)	none of the circumstances contemplated by Clause 5.5 has occurred and is continuing;
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(iv)	there has not been a Material Adverse Change in the financial position or state of affairs of the Borrower and/or the Group from that disclosed to the Agent prior to the date of this Agreement;
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(e)	that, if the ratio set out in Clause 15.1 were applied immediately following the advancement of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
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(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 (acting reasonably) may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
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9.2	Waiver of conditions precedent.

If the Majority Lenders, at their discretion, permit the Loan to be advanced before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authority of the Majority Lenders, specify).

9.3	Conditions Subsequent.

The Borrower undertakes to deliver or cause to be delivered to the Agent within thirty (30) days after the Delivery Date, or (as the case may be), after the Drawdown Date or at any later date agreed by the Agent the documents and other evidence listed in Schedule 3, Part C (Conditions Subsequent).

10.	REPRESENTATIONS AND WARRANTIES
10.1	General. The Borrower represents and warrants to each Creditor Party as follows:
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10.2	Status. The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and in compliance with the Republic of the Marshall Islands Economic Substance Regulation 2018 in accordance with its terms and time frame once the same becomes applicable; neither the Borrower nor any Security Party is a FATCA FFI or a US Tax Obligor.
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10.3	Share capital and ownership. The Borrower has an authorised share capital divided into 500 registered shares and the legal title and beneficial ownership of all those shares is held, free of any Security Interest or other claim by the Guarantor.
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10.4	Corporate power. The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
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(a)	to execute the Finance Documents to which it is a party; and
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(b)	to borrow under this Agreement and to make all the payments contemplated by, and to comply with, the Finance Documents to which the Borrower is a Party.
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(c)	to authorise the registration of the Ship under the Approved Flag.
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10.5	Consents in force. All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
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10.6	Legal validity; effective Security Interests. The Finance Documents to which the 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):
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(a)	constitute the Borrower's legal, valid and binding obligations enforceable against the 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.
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10.7	No third party Security Interests. Without limiting the generality of 10.6, at the time of the execution and delivery of each Finance Document:
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(a)	the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
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(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.
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10.8	No conflicts. The execution by the Borrower of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:
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(a)	any law or regulation in any Relevant Jurisdiction; or
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(b)	the constitutional documents of the Borrower; or
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(c)	any contractual or other obligation or restriction which is binding on the Borrower or any of its assets, and will not have a Material Adverse Effect.
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10.9	No withholding taxes. All payments which the 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 Relevant Jurisdiction.
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10.10	No default. No Event of Default or Potential Event of Default has occurred and is continuing.
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10.11	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 11.6; all audited and consolidated accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no Material Adverse Change in the financial position or state of affairs of the Borrower from that disclosed in the latest of those accounts which constitutes a Material Adverse Effect.
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10.12	No litigation. No legal or administrative action involving the 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 the Borrower’s knowledge, is likely to be commenced or taken which, in either case and if determined adversely, would be likely to have a Material Adverse Effect.
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10.13	Compliance with certain undertakings. At the date of this Agreement, the Borrower is in compliance with Clauses 11.2, 11.5, 11.9, 11.11 and 11.17.
10.14	Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to it and its business.
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10.15	ISM Code and ISPS Code compliance. All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ship have been complied with.
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10.16	No Money Laundering. Without prejudice to the generality of Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of their obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms that (i) 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 requirements or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).
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10.17	Patriot Act. To the extent applicable to the Borrower, the Borrower is in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the PATRIOT Act. No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
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10.18	Social law matters. The Borrower is in compliance in all material respects with any employment law or relevant regulation applicable to it.
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10.19	Compliance with processing of personal data. The Borrower is in compliance in all material respects with any law or regulation applicable to it pertaining to the protection of persons from the processing of personal data and no claim, notice or other communication has been received by the Borrower and/or the Guarantor in respect of any actual breach of, or liability under, any such law or regulation which, has or would be reasonably likely to have a Material Adverse Effect on the Borrower.
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10.20	DAC 6. No transaction contemplated by the Finance Documents nor any transaction to be carried out in connection with any transaction contemplated by the Finance Documents meet any hallmark set out in Annex IV of the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU, if applicable.
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10.21	The Ship. The Ship will upon her delivery to the Borrower and at any time thereafter be:
(a)	in the absolute and unencumbered (other than in favour of the Lenders or any other Creditor Party) ownership of the Borrower who will on and after the Ship’s delivery be the sole, legal and beneficial owner of the Ship;
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(b)	registered in the name of the Borrower under the laws and flag of the Flag State;
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(c)	operationally seaworthy and in every way fit for service, provided that the Borrower will not be in violation of this sub-clause 10.21 (c) in cases of (i) small off hire incidents occurring during the normal course of trading of the Ship or (ii) in cases of normal maintenance/repairs or (iii) in cases of damage to the Ship by causes for which it is insured under the Ship’s Insurances and all necessary steps have been taken to repair such damage to the satisfaction of any requirements set by the Ship’s Classification;
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(d)	classed with the relevant Classification free of all qualifications and overdue recommendations of the relevant Classification Society affecting class;
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10.22	Ship’s employment. The Ship is not subject to any Charter and will not be subject to any other charter or contract of employment or to any other agreement to enter into any charter or contract which, if entered into after the date of the Mortgage/General Assignment would have required the consent of any Creditor Party and on the date of her delivery to the Borrower and any time thereafter there will not be any agreement or arrangement whereby the Earnings (as defined in the Mortgage/General Assignment) of the Ship may be shared with any other person.
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10.23	No Security Interests. Neither the Ship, nor her Earnings, Insurances or Requisition Compensation (each as defined in the Mortgage/General Assignment) nor the Accounts or any of them nor any other properties or rights which are, or are to be, the subject of any of the Finance Documents will be, on the date the Ship will be delivered to the Borrower subject to any Security Interest other than Permitted Security Interests.
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10.24	No immunity. Neither the Borrower nor any of its respective assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement).
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10.25	Valid choice of Law. The choice of law agreed to govern this Agreement and/or any other Finance Document and the submission to the jurisdiction of the courts agreed in each of the finance documents are or will be, on execution of the respective finance documents, valid and binding on the Borrower and any other security party which is or is to be a party thereto.
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10.26	Environmental matters
(a)	no Environmental Law applicable to the Ship and/or the Borrower and/or the Approved Manager has been violated in a material way;
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(b)	all consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force;
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(c)	no Environmental Claim has been made or, to the best of the Borrower’s knowledge and belief, is threatened or pending against the Borrower or any other Security Party or the Ship and there has been no Environmental Incident which has given, or might give, rise to such a claim.
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10.27	Sanctions. Neither the Borrower and/or the Guarantor nor any other Security Party (a) is a Restricted Party, (b) is controlled directly or indirectly by a Restricted Party, (c) controls a Restricted Party or (d) has a Restricted Party serving as director or officer.
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10.28	P ari passu and subordinated indebtedness. The obligations of the Borrower under this Agreement are direct, general and unconditional obligations of the Borrower, and rank at least pari passu with all other present and future unsecured and unsubordinated Financial Indebtedness of the Borrower, with the exception of any obligations which are mandatorily preferred by operation of law and not by contract, and any Financial Indebtedness of the Borrower owing to any of its respective shareholders is subordinated in all respects to the Borrower’s obligations under this Agreement.
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10.29	No filings or actions required. **** Save for the registration of the Mortgage under the laws of the Approved Flag State through the competent registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of Finance Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to any of the Finance Documents and each of the Finance Documents is in proper form for its enforcement in the courts of the Relevant Jurisdiction in accordance with its terms.
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10.30	Solvency.
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(a)	neither the Borrower nor any other Security Party is unable, or admit or have admitted their inability, to pay its debts or has suspended making payments on any of its debts;
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(b)	neither the Borrower nor any other Security Party by reason of actual or anticipated financial difficulties has commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Financial Indebtedness;
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(c)	the value of the assets of the Borrower and the other Security Parties is not less than their respective liabilities (taking into account contingent and prospective liabilities); and
(d)	no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Financial Indebtedness of the Borrower or any other Security Party.
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10.31	Valuations. The Borrower represents and warrants that:
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(a)	all information supplied by it or on their behalf to an independent shipbroker selected by or acceptable to the Agent for the purposes of a valuation delivered to the Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given;
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(b)	it has not omitted to supply any information to an independent shipbroker selected by or acceptable to the Agent which, if disclosed, would adversely affect any valuation prepared by such an independent shipbroker; and;
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(c)	there has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
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10.32	Validity and Completeness of the MOA and the Escrow Letter. The Borrower warrants that the copies of the MOA and of the Escrow Letter delivered to the Agent before the date of this Agreement are true and complete copies thereof which constitute valid, binding and enforceable obligations of the parties thereto in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally; and no amendments or additions to it have been agreed (other than those notified to the Lender prior to the date of this Agreement) nor has any of the parties thereto waived any of their respective rights thereunder.
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10.33	Repetition of Representations and Warranties. The representations and warranties in this Clause 10. shall be deemed to be repeated by the Borrower (a) on the date of service of the Drawdown Notice, (b) on the Drawdown Date and (c) on the first day of each Interest Period as if made with reference to the facts and circumstances existing on each such day.
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11.	GENERAL UNDERTAKINGS
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11.1	General. The 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 authority of the Majority Lenders, otherwise permit.
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11.2	Title; negative pledge; pari passu. The Borrower will:
(a)	ensure that the Ship upon her delivery to the Borrower will maintain its ownership, management, control and ultimate beneficial ownership and the Borrower will hold the legal title to, and own the entire beneficial interest in the Ship’s 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 except for Permitted Security Interests. For the avoidance of doubt the Lenders consent and agree to any changes relating to the shareholders of the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement;
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(b)	not create or permit to arise any Security Interest (except for Permitted Security Interests) over any of its asset, present or future; and
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(c)	procure that its liabilities under the Finance Documents to which it is a party to will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
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11.3	No disposal of assets. The Borrower will not (without the prior written consent of the Agent, acting with authority from the Majority Lenders) transfer, lease or otherwise dispose of:
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(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 them or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.
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11.4	No other liabilities or obligations to be incurred. The Borrower will not incur any liability or obligation except (i) liabilities and obligations under the Finance Documents to which it is a party and (ii) liabilities or obligations incurred in the ordinary course of its business of operating and chartering the Ship.
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11.5	Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document to which it is a party will be true and not misleading in any material respect and will not omit any material fact or consideration.
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11.6	Provision of financial statements. The Borrower will:
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(a)	procure that the Guarantor furnishes the Agent, with annual, audited and consolidated financial statements of the Guarantor within 180 days after the end of the financial year concerned, and prepared in accordance with GAAP principles and practices consistently applied, such obligation commencing from the 31^st^ December 2023;
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(b)	send to the Agent, together with the Accounting Information referred to in paragraph (a) above, a Compliance Certificate;
(c)	provide the Agent from time to time as the Agent may reasonably request and in form and substance satisfactory to the Agent with any information on the financial condition, commitments, business and operations of the Borrower and any other Security Party;
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(d)	keep the Agent advised with respect to all major financial developments of the Borrower and the Guarantor, including (but not limited to) sales or purchases of vessels, new loans, refinancing and/or restructuring of existing loans and contracts for term employment of vessels, as the Agent may from time to time reasonably request.
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11.7	Form of financial statements. All financial statements delivered under Clause 11.6 will:
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(a)	give a true and fair view of the state of affairs of the Guarantor, or as the case may be, of the Borrower at the date of those accounts and of the profit for the period to which those accounts relate; and
---	---
(b)	fully disclose or provide for all significant liabilities of the Guarantor, or as the case may be, of the Borrower for the period to which those accounts relate,
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to the Agent’s satisfaction.

11.8	Consents. The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
(a)	for the Borrower and any Security Party to perform their respective obligations under each of the Finance Documents to which each of them is a party;
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(b)	for the validity or enforceability of any Finance Document to which the Borrower and any Security Party is party,
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and the Borrower will comply (and will ensure that each Security Party will comply) with the terms of all such consents.

11.9	Maintenance of Security Interests. The Borrower will:
(a)	at its own cost, do 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
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(b)	without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the reasonable 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.
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11.10	Notification of litigation. The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, the Approved Manager and any other Security Party or the Ship, her Earnings or her Insurances 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 as having a Material Adverse Effect on the business, assets or financial condition of them or as affecting the validity or enforceability of any Finance Document.
11.11	Principal place of business. The Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in the United Kingdom or the United States of America.
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11.12	Confirmation of no default. The Borrower will, not more than once per quarter and within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by at least one (1) director of the Borrower and which:
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(a)	states that no Event of Default or Potential Event of Default has occurred; or
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(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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11.13	Notification of default. The Borrower will notify the Agent as soon as the Borrower becomes aware of:
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(a)	the occurrence of an Event of Default or a Potential Event of Default which is continuing; or
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(b)	any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
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and will thereafter keep the Agent fully up‑to‑date with all developments.

11.14	Provision of further information. The Borrower will inform the Agent of all major financial developments in the Group such as new loans, refinancing/restructuring of existing loans, new acquisitions and sales, contracts for term employment of the Ship and furthermore will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:
(a)	the Borrower, the Ship, her Insurances or her Earnings; or
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(b)	any other matter relevant to, or to any provision of, a Finance Document,
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which may be requested by any Creditor Party at any time.

11.15	Provision of customer information. The Borrower will produce such documents and evidence regarding the Borrower itself and each Security Party as the Lenders shall from time to time require, based on applicable laws and regulations from time to time and the Lenders’ own internal guidelines from time to time, relating to the Lenders’ knowledge of its customers (“KYC”).

11.16	Ownership. The Borrower or, as the case may be, any other corporate Security Party shall ensure that, throughout the Security Period without the prior written consent of the Agent, which shall not be unreasonably withheld, there shall be no change in the Directors and Officers of the Borrower and in the Chairman of the Guarantor and moreover the Borrower shall ensure that no change shall be made directly or indirectly in the ownership of the Borrower, the beneficial ownership of the Guarantor, or the control of the Borrower and/or the Guarantor, as disclosed to the Agent prior to the date of this Agreement, without the prior written consent of the Agent, which shall not be unreasonably withheld. For the avoidance of doubt the Lenders consent and agree to any changes relating to the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement.
11.17	Sanctions ****
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(a)	Each of the Borrower and/or the Guarantor undertakes to comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply) in all respects with all Sanctions, including employing the Ship not allowing her employment in manner contrary to any Sanctions.
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(b)	Each of the Borrower and/or the Guarantor undertakes not to use (and shall procure that no other Security Party shall use) any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Creditor Parties.
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(c)	Each of the Borrower and/or the Guarantor undertakes to ensure (and shall procure that each other Security Party shall ensure) that no proceeds to the best of its knowledge (after reasonable enquiry) from any activity or dealing with a Restricted Party are credited to any bank account held with any Creditor Party in its name.
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(d)	Each of the Borrower and/or the Guarantor undertakes (and shall procure that each other Security Party shall), to the extent permitted by law, promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.
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11.18	Treasury Services. The Borrower shall not enter into any treasury related contract with a bank or financial institution, without the prior consent of the Agent. For the avoidance of doubt this clause will not prohibit the Borrower from obtaining advisory and/or information services from other banks or financial institutions.
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11.19	Use of proceeds. The Borrower shall not (and shall procure that no other Security Party and no Affiliate of any of them shall) permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Party; or (ii) in any other manner that could result in the Borrower or any other Security Party or any Creditor Party being in breach of any Sanctions or becoming a Restricted Party.
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11.20	Anti-Corruption.
(a)	The Borrower shall not (and shall procure that no other Security Party r will) directly or indirectly use the proceeds of the Loan for any purpose which would breach or might breach applicable anti-corruption laws, including but not limited to the UK Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977, each as amended.
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(b)	The Borrower shall (and shall procure that each other Security Party will):
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(i)	conduct its business in compliance with applicable anti-corruption laws and regulations; and
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(ii)	maintain effective policies and procedures designed to promote and achieve compliance with such laws and regulations.
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11.21	Social law matters. The Borrower shall (and shall procure that each other Security Party shall) comply in all respects with with any employment law or relevant regulation applicable to it.
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11.22	Compliance with other laws. The Borrower shall (and shall procure that each other Security Party shall) comply in all respects with all laws and regulations to which it may be subject including without limitation (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order thereto) and (ii) the PATRIOT Act.
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11.23	Compliance with processing of personal data. The Borrower shall (and shall procure that each Security Party shall) comply in all respects with all laws and regulations to which they may be subject pertaining to the protection of persons from the processing of personal data where failure to do so is reasonably likely to have a Material Adverse Effect, and shall use its best endeavours to avoid being subject to any claim, notice or other communication in respect of any actual breach of, or liability under, any such law or regulation where any such breach or liability has or is reasonably likely to have a Material Adverse Effect; Provided that upon becoming aware of any such claim, notice or other communication, the Borrower shall promptly inform the Agent in writing of (i) any such claim against the Borrower and/or the Guarantor, whether current, pending or threatened, and/or of (ii) any communication or notice and/or (iii) the imposition of any fine against the Borrower and/or the Guarantor in respect of any actual or alleged breach of, or liability under, any such law or regulation.
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11.24	Marshall Islands Economic Substance Regulations 2018. The Borrower shall (and shall procure that each other Security Party incorporated in the Republic of the Marshall Islands shall) comply in all respects with the Republic of the Marshall Islands Economic Substance Regulations 2018 (including submission to the Agent of documentary evidence of such compliance) always in accordance with its terms and time frame once the same becomes applicable.
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11.25	DAC6. The Borrower, if applicable, shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
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(a)	promptly upon the making of such analysis or the obtaining of such advice, any analysis made or advice obtained on whether any transaction contemplated by the Finance Documents or any transaction carried out (or to be carried out) in connection with any transaction contemplated by the Finance Documents contains a hallmark as set out in Annex IV of DAC6; and
(b)	promptly upon the making of such reporting and to the extent permitted by applicable law and regulation, any reporting made to any governmental or taxation authority by or on behalf of any member of the Group or by any adviser to such member of the Group in relation to DAC6 or any law or regulation which implements DAC6 and any unique identification number issued by any governmental or taxation authority to which any such report has been made (if available).
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11.26	ANNEX VI. The Borrower shall, upon the request of any Lender and at the cost of the Borrower, on or before 31st July in each calendar year, supply or procure the supply to the Agent, of all ship fuel oil consumption data required to be collected and reported by the Borrower in accordance with Regulation 22A of Annex VI and any Statement of Compliance, together with a Carbon Intensity and Climate Alignment Certificate (if the same becomes mandatory), in each case relating to the Ship for the preceding calendar year and in accordance with the terms and time frame relevant applicable regulations of Annex VI may from time to time come in force and effect; and
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For the purposes of this Clause 11.26:

"Annex VI" means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 ("MARPOL"), as modified by the Protocol of 1978 relating thereto;

"Carbon Intensity and Climate Alignment Certificate" means a certificate from a Recognised Organisation relating to the Ship and a calendar year setting out:

(a)	the average efficiency ratio of the Ship for all voyages performed by it over that calendar year using ship fuel oil consumption data required to be collected and reported in accordance with regulation 22A of Annex VI in respect of that calendar year; and
(b)	the climate alignment of the Ship for such calendar year,
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"Recognised Organisation" means, in respect of the Ship, the Ship’s flag state or an organisation which is likely to be RINA representing the Ship’s flag state and duly authorised to determine whether the Borrower has complied with regulation 22A of Annex VI.

"Statement of Compliance" means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

11.27	Provision of Sustainability Performance Certificate. The Borrower or the Guarantor shall provide the Agent with a Sustainability Performance Certificate for the Ship within ninety (90) days of the end of each Sustainability Period for the Ship.

11.28	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 one (1) copy for each Creditor Party.
12.	CORPORATE UNDERTAKINGS
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12.1	General. The 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 authority of the Majority Lenders, otherwise permit.
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12.2	Maintenance of status. The Borrower will maintain its separate corporate existence and remain in good standing under the laws of its incorporation.
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12.3	Negative undertakings. The Borrower will not:
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(a)	carry on any type of business other than the ownership, chartering and operation of the Ship in accordance with its constitutional documents;
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(b)	make any form of distribution (other than payment of a dividend pursuant to Clause 12.4) or effect any form of redemption, purchase, reduction or return of share capital or issue, allot or grant any person a right to any shares in its capital; or
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(c)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld, incur any debt or provide any form of credit or financial assistance (unless fully subordinated to the Loan and on terms otherwise acceptable to the Lenders) issue any guarantee to any person, (other than otherwise permitted in this Agreement), or enter into any transaction with or involving such a person, unless in the ordinary course of its normal shipping business; or
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(d)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), open or maintain any account with any bank or financial institution except accounts with the Account Bank or for the purposes of the Finance Documents and accounts notified to the Agent prior to the date of this Agreement; or
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(e)	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; or
(f)	enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation, or change its name; or
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(g)	purchase any further assets (other than the Ship), either directly or indirectly (through subsidiaries); or
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(h)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld, incur any other Financial Indebtedness. Any shareholder loans, inter company loans, affiliate loans and third party loans to the Borrower shall be fully subordinated to the rights of the Creditor Parties under the Loan Agreement and the Finance Documents, on terms satisfactory to the Agent in its sole discretion.
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12.4	Dividends. The Borrower may declare or pay any dividends or other distribution as long as no Event of Default has occurred which is continuing and such declaration of payment would not result to an Event of Default.
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12.5	Liquidity. The Borrower and the Guarantor will ensure that from the date of this Agreement the Borrower or the Guarantor or any other entity acceptable to the Agent maintain during the Security Period with the Agent or the Account Bank or the Lenders/Lender(s)’ banking group the Minimum Liquidity.
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12.6	Debt to equity ratio. The Borrower will ensure that the Guarantor’s total debt net of cash will not exceed 75% of the total market value of its assets.
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12.7	Minimum Net Worth. The Borrower will ensure that the Guarantor’s minimum Net Worth listed in Nasdaq will be at least fifteen million Dollars ($15,000,000).
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12.8	Compliance Check. On each Compliance Date, compliance with the undertakings contained in Clause 15.1 shall be determined by reference to the Accounting Information for the twelve month period in each Financial Year of the Borrower (commencing with the twelve month period commencing from 31 December 2023) delivered to the Agent pursuant to the Agreement. At the same time as they deliver that Accounting Information, the Borrower shall deliver to the Agent a Compliance Certificate signed by a director of the Borrower. If, prior to the delivery of a Compliance Certificate, the Borrower becomes aware that such undertakings will not be complied with, the Borrower shall immediately notify the Agent thereof.
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12.9	Application of FATCA The Borrower shall not become (and shall procure that no Security Party shall become) a FATCA FFI or a US Tax Obligor, without the prior written consent of the Lenders.
12.10	Republic of the Marshall Islands Economic Substance Regulations 2018. The Borrower will ensure that each of the Security Parties incorporated in the Republic of the Marshall Islands shall comply in all respects and remain in compliance with the Republic of the Marshall Islands Economic Substance Regulations 2018 in accordance with its terms and time frame once the same becomes applicable.
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13.	INSURANCE
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13.1	General. The Borrower undertakes with each Creditor Party to comply (and to the extent applicable to procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will comply) with the following provisions of this Clause 13 at all times during the Security Period, except as the Agent may (with the authority of the Majority Lenders), otherwise permit.
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13.2	Maintenance of obligatory insurances. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) keep the Ship insured at its or at the relevant Security Party’s expense against:
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(a)	fire and usual marine risks (including hull and machinery and excess risks);
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(b)	war risks (including war protection and indemnity liabilities, terrorism, piracy and confiscation); and
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(c)	protection and indemnity risks (including cover for oil pollution liability risks); and
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(d)	any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for the Borrower and/or the relevant Security Party to insure and which are specified by the Security Trustee by notice to the Borrower.
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13.3	Terms of obligatory insurances. The Borrower shall (and to the extent applicable shall procure in all cases that each Security Party other entity if named as co-assured in the insurance policies will) effect such insurances:
(a)	in Dollars;
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(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) 120% of the amount of the Loan (ii) the Market Value of the Ship;
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(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 (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);
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(d)	in relation to protection and indemnity risks in respect of the full value and tonnage of the Ship;
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(e)	on approved terms; and
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(f)	through approved brokers and with approved insurance companies and/or underwriters and/or war risks associations, and protection and indemnity risks shall be placed with a member of the International Group of P&I Clubs.
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13.4	Further protections for the Creditor Parties. In addition to the terms set out in Clause 13.3, the Borrower will:
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(a)	procure that the obligatory insurances shall be in the name of the Borrower and/or any other entity named as co-assured in the insurance policies of the Ship or whenever the Security Trustee so 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;
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(b)	procure that the insurers shall note the Security Trustee’s interest and endorse the relevant notices of assignment and loss payable clause on the relevant certificates of entry or policies and shall furnish the Security Trustee with a copy of such certificates of entry or policies;
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(c)	use its best endeavours to 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;
(d)	provide that following an Event of Default which is continuing the Security Trustee may make proof of loss if the Borrower fails to do so.
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13.5	Renewal of obligatory insurances. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will):
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(a)	at least 21 days before the expiry of any obligatory insurance:
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(i)	notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Borrower proposes to renew that insurance and of the proposed terms of renewal; and
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(ii)	in case of any material change in insurance cover, obtain the Majority Lenders' approval to the matters referred to in paragraph (i) above;
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(b)	at least 14 days before the expiry of any obligatory insurance, renew the insurance; and
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(c)	procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall before the expiry of the current insurances notify the Security Trustee in writing of the terms and conditions of the renewal.
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13.6	Copies of policies; letters of undertaking. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
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(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;
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(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;
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(c)	they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
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(d)	they will notify the Security Trustee, not less than 7 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the 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
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(e)	if the insurances form part of a fleet cover, they will not set off any claims on the Ship against premiums due for other vessels under the fleet cover not mortgaged to the Agent or against premiums due for other insurances; neither will they cancel the insurance cover of the Ship for reason of non-payment of such premiums; and they will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee.
13.7	Copies of certificates of entry. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that, from any protection and indemnity and/or war risks associations in which the Ship is entered, the Security Trustee is provided with:
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(a)	a certified copy of the certificate of entry for the Ship;
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(b)	a letter or letters of undertaking in such form 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 the Ship.
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13.8	Deposit of original policies. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
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13.9	Payment of premiums. The Borrower shall (and to the extent applicable shall procure in all cases that each other Security Party if named as co-assured in the insurance policies will) 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.
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13.10	Guarantees. The Borrower shall (and to the extent applicable shall procure that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
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13.11	Restrictions on employment. The Borrower shall not employ the Ship, nor permit same to be employed, outside the cover provided by any obligatory insurances.
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13.12	Compliance with terms of insurances. The Borrower shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) do or omit to 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 thereunder repayable in whole or in part; and, in particular:
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(a)	the Borrower shall (and shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) 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 13.7(c) above) 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 not (and shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances; and
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(c)	the Borrower shall not (and shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) employ any, 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.
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13.13	Alteration to terms of insurances. The Borrower shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) make or agree to any material alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee (not to be unreasonably withheld).
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13.14	Settlement of claims. The Borrower shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty without the prior written consent of the Security Trustee (which consent will not be unreasonably withheld),, 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 in accordance with the Finance Documents.
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13.15	Provision of copies of communications. The Borrower shall (and to the extent applicable shall procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will), if required by the Security Trustee, provide the Security Trustee, at the time of each such communication, copies of all material written communications between the Borrower and:
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(a)	the approved brokers; and
(b)	the approved protection and indemnity and/or war risks associations; and
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(c)	the approved insurance companies and/or underwriters, which relate directly or indirectly to:
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(i)	the Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
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(ii)	any credit arrangements made between the Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
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13.16	Provision of information. In addition, the Borrower shall (and to the extent applicable shall procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will) promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
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(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
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(b)	effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 below or dealing with or considering any matters relating to any such insurances,
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and the Borrower and/or (as the case may be) any other Security Party or other entity, in all cases if named as co-assured in the insurance policies 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) above (it being understood however that prior to the occurrence of an Event of Default which is continuing the Borrower will only bear the costs of such insurance reports once per year).

13.17

Mortgagees’ interest. The Agent shall be entitled from time to time to effect, maintain and renew a mortgagees’ interest insurance in an amount equal to 110% of the Loan and otherwise on such terms, through such insurers and generally in such manner as the Lenders may from time to time consider appropriate and the Borrower shall upon demand against appropriate vouchers/invoices fully indemnify the Lenders 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	Review of insurance requirements. The Majority Lenders shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the reasonable opinion of the Majority Lenders, significant and capable of affecting the Borrower and/or to the extent applicable any other Security Party or other entity in all cases if named as co-assured in the insurance policies or the Ship and her insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrower and/or (as the case may be) any other Security Party or other entity in all cases if named as co-assured in the insurance policies may be subject), and, prior to the occurrence of an Event of Default which is continuing, may appoint insurance consultants in relation to this review at the cost of the Borrower and/or any other Security Party or other entity in all cases if named as co-assured in the insurance policies, subject to such appointment taking place once per year.
13.19	Modification of insurance requirements. The Security Trustee shall notify the Borrower of any proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Majority Lenders (acting reasonably) consider appropriate in the circumstances.
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13.20	Compliance with instructions. The Security Trustee shall be entitled but will not be bound to (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to effect the insurances of the Ship in the amount and in terms acceptable to the Security Trustee from time to time at the cost and on behalf of the Borrower and/ to the extent applicable or any other Security Party or other entity in all cases if named as co-assured in the insurance policies.
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14.	SHIP’S COVENANTS
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14.1	General. The 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 authority of the Majority Lenders) may otherwise permit.
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14.2	Ship's name and registration. The Borrower shall keep the Ship registered in its name under the Approved Flag; shall not 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 or flag of the Ship without the prior written consent of the Agent (acting on the authority of the Majority Lenders), such consent not to be unreasonably withheld.
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14.3	Repair and classification. The Borrower shall keep the Ship in a good and safe condition and state of repair:
(a)	consistent with first‑class ship ownership and management practice;
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(b)	so as to maintain the Ship with the highest classification available for vessels of the same age, type and specification as the Ship with Lloyd’s Register of Shipping (or such other first class classification society being a member of IACS and as may be approved by the Security Trustee), free of overdue recommendations and conditions affecting the Ship’s class; and
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(c)	so as to comply with all laws and regulations applicable to vessels registered at ports in the 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 and the ISPS Code.
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14.4	Modification. The Borrower shall not (and shall procure that no Approved Manager shall) make any modification or repairs to, or replacement of, the Ship or equipment installed on her which would or might materially alter the structure, type or performance characteristics of the Ship or materially reduce her value.
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14.5	Removal of parts. The Borrower shall not (and shall procure that no Approved Manager shall) remove any material part of the Ship, or any item of equipment installed on, the 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 Lenders and becomes on installation on the Ship the property of the Borrower and subject to the security constituted by the Mortgage Provided that the Borrower may install leased equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.
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14.6	Surveys. The Borrower shall submit the Ship regularly to all periodical or other surveys which may be required for classification purposes, at the cost and expense of the Borrower. The Agent shall have the right to request one or more technical survey reports of the Ship by surveyors appointed to by the Agent at the cost of the Borrower, provided that the frequency of such reports shall be limited to one per year (unless an Event of Default shall have occurred and is continuing).
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14.7	Inspection. The Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times, but without interference to the Ship’s trading and operations, to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. Provided that the Ship is found to be in satisfactory condition, the cost of such inspections shall be borne by the Borrower not more than once per year.
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14.8	Prevention of and release from arrest. Unless contested in good faith by appropriate proceedings, the 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, her Earnings or her Insurances; and
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(b)	all taxes, dues and other amounts charged in respect of the Ship, her Earnings or her Insurances;
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and, forthwith upon receiving notice of the arrest of the Ship, or of her detention in exercise or purported exercise of any lien or claim, the Borrower shall procure her prompt release by providing bail or otherwise as the circumstances may require.

14.9	Compliance with laws etc. The Borrower shall:
(a)	comply, or procure compliance by the Approved Manager with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port);
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(b)	comply (and procure that each Security Party and each Affiliate of any of them shall comply) in all aspects with all Sanctions;
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(c)	not employ the Ship nor allow her employment in any manner contrary to any Sanctions;
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(d)	in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the prior written consent of the Majority Lenders has been given and the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Majority Lenders may require.
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14.10	Provision of information. The Borrower shall promptly provide the Security Trustee with any information which the Majority Lenders reasonably request regarding:
(a)	the Ship, her employment, position and engagements;
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(b)	the Earnings and payments and amounts due to the master and crew of the Ship;
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(c)	any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;
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(d)	any towages and salvages;
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(e)	its compliance, the Approved Manager’s compliance or the compliance of the Ship with the ISM Code
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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 the ISM Code and ISPS Code documentation.

14.11	Notification of certain events. The Borrower shall immediately notify the Security Trustee by letter of:
(a)	any casualty which is or is likely to be or to become a Major Casualty;
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(b)	any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
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(c)	any requirement or recommendation made by any insurer or classification society (or any withdrawal of class) or by any competent authority which is not complied with in accordance with its terms;
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(d)	any arrest or detention of the Ship which is not lifted within forth eight (48) hours, any exercise or purported exercise of any lien on the Ship or her Earnings or any requisition of the Ship for hire;
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(e)	any intended dry docking of the Ship;
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(f)	any Environmental Claim made against the Borrower or in connection with the Ship or any Environmental Incident;
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(g)	any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the Approved Manager or otherwise in connection with the Ship; or
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(h)	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,
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and the Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of the Borrower’s, the Approved Manager’s or any other person's response to any of those events or matters.

14.12	Restrictions on chartering, appointment of managers, etc. The Borrower shall not without the prior written consent of the Agent (acting on the authority of the Majority Lenders):
(a)	let the Ship on demise charter for any period;
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(b)	enter into any time charter or bareboat charter or consecutive voyage charter in respect of the Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;
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(c)	enter into any charter in relation to the Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
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(d)	charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed;
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(e)	appoint a commercial, technical or operational manager of the Ship (other than the Approved Manager) or agree to any material alteration to the terms of the Approved Manager's appointment (and in respect of which, the consent of the Agent shall not be unreasonably withheld);
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(f)	de‑activate or lay up the Ship;
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(g)	change the legal ownership of the shares in the Ship;
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(h)	put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed Seven Hundred Fifty Thousand Dollars ($750,000) (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 the Ship or her Earnings for the cost of such work or otherwise; or
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(i)	change the classification society with which the Ship is classed (and in respect of which, the consent of the Agent and the authority of the Majority Lenders shall not be unreasonably withheld).
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14.13	Notice of Mortgage. The Borrower shall keep the Mortgage registered against the Ship as a valid first priority mortgage, carry on board the Ship a certified copy of the 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 the Borrower to the Lenders.
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14.14	Sharing of Earnings. The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings other than a profit sharing agreed at arm’s length under a charter party provided that it is not a part of any pool arrangement, in which case the Agent’s prior written consent will be required (such consent not to be unreasonably withheld).
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14.15	ISPS Code. The Borrower shall comply with the ISPS Code and in particular, without limitation, shall:
(a)	procure that the Ship and the company responsible for the Ship’s compliance with the ISPS Code, comply with the ISPS Code; and
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(b)	maintain for the Ship an ISSC; and
---	---
(c)	notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
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14.16	Charter Assignment. if the Borrower enters into any time charter or contract of affreightment in respect of the Ship which is of twelve (12) months or more in duration, or is capable of exceeding twelve (12) months in duration, the Borrower shall execute in favour of the Security Trustee a Charter Assignment and notice of assignment (and shall try to obtain an acknowledgement of the same from the relevant charterer or counterparty) of such time charter or contract of affreightment in such form and on such terms as the Agent may reasonably require, and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 2, 3, 4 and 5 of Schedule 3, Part A hereof as the Agent may reasonably require.
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14.17	No freight derivatives. The Borrower shall not enter into or agree to enter into (without the consent of the Majority Lenders, such consent not to be unreasonably withheld) any freight derivatives or any other instruments which have the effect of hedging forward exposure to freight derivatives.
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15.	ASSET COVER RATIO SHORTFALL - ship’s valuation
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15.1	Minimum Security Cover; Provision of additional security cover; prepayment of Loan. In the event the Agent (acting on the instructions of the Majority Lenders) notifies the Borrower that:
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(a)	the Market Value (determined as provided below) of the Ship; plus
---	---
(b)	the net realisable value of any additional security previously provided under this Clause 15 (but always excluding any amounts standing to the credit of the Earnings Account or the Retention Account or the Cash Collateral Account),
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is during the Security Period below the Asset Cover Ratio, the Borrower undertakes that it will, within thirty (30) days after the date on which the Agent's notice is served, either:

(i)

provide, or ensure that a third party provides, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which consists of either (aa) cash pledged to the Security Trustee or any other Creditor Party which when in the form of cash in Dollars, will be valued on a Dollar for Dollar basis or (bb) a Security Interest (including, but not limited to, a first priority mortgage over another vessel), covering such asset or assets and documented in such terms as the Agent may, with authorisation from the Majority Lenders, approve or require; or

(ii)	prepay in accordance with Clause 8 such part of the Loan as will eliminate the shortfall, however, clause 8.10 will not be applicable in this Clause 15.1 (ii) and such prepayment will be applied against repayment instalments of the Loan (including the payment of the Balloon Instalment) on a pro rata basis.
15.2	Meaning of additional security. In Clause 15.1 “security” means a Security Interest over an asset or assets (whether securing the Borrower’s liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit or other security in respect of the Borrower’s liabilities under the Finance Documents, in each case in a form and substance acceptable to the Agent in its sole discretion.
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15.3	Requirement for additional documents. The Borrower shall not be deemed to have complied with Clause 15.1(i) above until the Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 3 (Part A) and such legal opinions in terms acceptable to lawyers selected by the Agent in its sole discretion.
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15.4	Valuation of Ship. Subject to the following provisions of this Clause 15.4, the Market Value of the Ship shall be determined:
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(a)	in Dollars, as at the date of (or no earlier than 30 days prior to the Drawdown Date) such valuation;
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(b)	by an independent shipbroker selected by or acceptable to the Agent and reporting to the Agent;
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(c)	with or without physical inspection of the Ship (as the Agent may require);
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(d)	on the basis of a sale for prompt delivery for cash, free of charter and free of encumbrances on normal arm's length commercial form as between a willing seller and a willing buyer.
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15.5	Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 15.1 (i) and which consists of a Security Interest over a vessel other than the Ship shall be that shown by way of a valuation complying with the requirements of Clause 15.4.
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15.6	Valuations binding and conclusive. Any valuation under Clause 15.1(i), 16.4 or 16.5 shall be binding and conclusive evidence of the Market Value of the Ship or of the other assets it refers to at the date of such valuation.
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15.7	Provision of information. The Borrower shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.4 or Clause 15.5 with any information which the Agent or the shipbroker or expert may reasonably request for the purposes of the 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 shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.
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15.8	Payment of valuation expenses. Without prejudice to the generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, subject to the provisions of Clause 15.9, on demand, pay the Agent the amount of the fees and expenses of any shipbrokers or experts 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.
15.9	Frequency of valuations. The Agent shall be entitled to obtain written valuations of the Ship prior to the drawdown of the Loan and any time during the Security Period, provided that after drawdown of the Loan the costs and expenses of such shall only be borne by the Borrower once per year (unless an Event of Default has occurred and is continuing, in which case the Agent shall be entitled to obtain a valuation at any time, at the cost and expense of the Borrower).
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16.	PAYMENTS AND CALCULATIONS
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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:
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(i)	by not later than 11.00 a.m. (New York City time) on the due date;
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(ii)	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);
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(iii)	if in Dollars, to the account of the Agent with such corresponding bank in New York as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and
(iv)	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.
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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,
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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:
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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
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(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.
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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.
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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 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.
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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
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(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.
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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.
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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 all payments in respect of those amounts made by the Borrower and any other Security Party.
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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 other Security Party.
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16.11	Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or any other Security Party to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor Party.
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17.	APPLICATION OF RECEIPTS
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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:
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(i)	first, 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 at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses 20, 21, and 22 of this Agreement or by the Borrower or any other Security Party under any corresponding or similar provision in any other Finance Document);
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(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
(iii)	thirdly, in or towards satisfaction of the Loan on a pro rata basis;
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(b)	SECONDLY: 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 reasonable 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 Clause 17.1(a); and
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(c)	THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
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17.2	Variation of order of application. The Agent may, following the occurrence of an Event of Default or a Potential Event of Default which is continuing, 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 either as regards a specified sum or sums or as regards sums in a specified category or categories.
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17.3	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 the Borrower or any Security Party.
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18.	APPLICATION OF EARNINGS
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18.1	Payment and application 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 Assignment), as long as no Event of Default has occurred which is continuing, all the Earnings of the Ship are credited to the Earnings Account and shall be applied as follows:
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(a)	first, towards payment of all sums other than principal and interest due to the Lenders under this Agreement and the other Finance Documents;
---	---
(b)	secondly, towards payment of the next instalment of principal and the next payment of interest due to the Lenders in accordance with the provisions of Clause 18.2;
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(c)	thirdly, any surplus shall (subject always to the other provisions of this Clause 18 and provided no Event of Default is continuing) be available to the Borrower, and
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it is expressly agreed that so long as no Event of Default shall have occurred and is continuing, the Borrower shall be entitled to withdraw from the Earnings Account any amount provided, however, that if in the opinion of the Agent or the Security Trustee (as the case may be) there will be insufficient sums standing to the credit of the Earnings Account to meet payments under (a) and (b) above, the Agent or the Security Trustee (as the case may be) shall be entitled to refuse any withdrawal from the Earnings Account.

18.2	Monthly retentions. The Borrower undertakes with each Creditor Party to ensure that, in each calendar month of the Security Period commencing one month after the Drawdown Date, on such dates as the Agent may from time to time specify, there is transferred to the Retention Account out of the Earnings received in the Earnings Account during the preceding calendar month:
(a)	one‑third of the amount of the repayment instalment falling due under Clause 8 on the next Repayment Date; and
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(b)	the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest under this Agreement.
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The “relevant fraction” 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 or the last due date for payment of interest to the next due date for payment of interest under this Agreement).
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18.3	Shortfall in Earnings. If the aggregate Earnings received in the Earnings Account are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 18.2, the Borrower shall make up the amount of the insufficiency on demand from the Agent; but, without thereby prejudicing the Agent’s right to make such demand at any time, the Agent may permit the Borrower to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 18.2 from the Earnings received in the next or subsequent months.
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18.4	Application of retentions. Until an Event of Default occurs, the Lenders shall on each Repayment Date and on each due date for the payment of interest under this Agreement apply in accordance with the payment details set out in Clause 16.1 so much of the balance on the Retention Account as equals:
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(a)	the repayment instalment due on that Repayment Date; or
---	---
(b)	the amount of interest payable on that interest payment date;
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in discharge of the Borrower’s liability for that repayment instalment or that interest.

18.5

Interest accrued on Retention Account. Any credit balance on the Retention Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balance appears to the Account Bank likely to remain on the Retention Account.

18.6

Location of accounts. The Borrower and each other holder of an Account shall maintain the Accounts with the Account Bank, free of Security Interest and rights of set-off (other than as created under the Accounts Pledges), until no amount remains outstanding under this Agreement or any other Finance Documents and shall procure that transfers are made from each Account (and irrevocably authorises the Agent following the occurrence of an Event of Default which is continuing to instruct the Account Bank to transfer from each Account) in order to facilitate the payment of amounts required and/or contemplated by this Agreement and the other Finance Documents and shall promptly:

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(a)	comply with any requirement of the Agent as to the location or re‑location of any of the Accounts;
(b)	execute any documents which the Lenders specify to create or maintain in 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) each Account.
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18.7	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 in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which a Creditor Party has become entitled to demand under Clause 20 or 21.
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18.8	Borrower’s obligations unaffected. The provisions of this Clause 18 do not affect:
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(a)	the liability of the Borrower to make payments of principal and interest on the due dates; or
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(b)	any other liability or obligation of the Borrower or any Security Party under any Finance Document.
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19.	EVENTS OF DEFAULT
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19.1	Events of Default. An Event of Default occurs if:
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(a)	the Borrower or any Security Party fail to pay when due or (if payable on demand) three (3) days following the date on which the written demand is served any sum payable under a Finance Document or under any document relating to a Finance Document, unless such failure to pay is caused by an administrative or technical error or any disruption event in the payment/communication system which is beyond the control of the Borrower, in which case the Borrower shall rectify such error within three (3) Business Days; or
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(b)	any breach occurs of Clauses 9.2, 9.3, 10.12, 11,2, 11.11, 11.17, 12.2, 12.3, 13 or 15.1, and in case any such breach (other than those referred to in Clauses 9.2, 9.3, 13 and 15.1 hereinabove to which other grace periods are applicable, as therein provided) is in the opinion of the Security Trustee, capable of remedy, if it will continue un-remedied for seven (7) Business Days after its occurrence; or
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(c)	any breach of the obligations set out in Clause 11.21 occurs which in the reasonable opinion of the Majority Lenders could have a Material Adverse Effect.
---	---
(d)	any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues un-remedied ten (10) days after written notice from the Agent requesting action to remedy the same; or
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(e)	(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 covered by paragraphs (a) or (b)); or
(f)	any representation, warranty or statement made 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 untrue or misleading in a material way when it is made; or
---	---
(g)	any of the following occurs in relation to any Financial Indebtedness of the Borrower:
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(i)	any Financial Indebtedness of the Borrower is not paid when due or, if payable on demand, three (3) days following the date on which the written demand is served; or
---	---
(ii)	any Financial Indebtedness of the Borrower 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 the Borrower 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 the Borrower 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 the Borrower becomes enforceable; or
---	---
(h)	any of the following occurs in relation to the Borrower:
---	---
(i)	the Borrower becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
---	---
(ii)	any assets of the Borrower are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $500,000 or more or the equivalent in another currency unless such execution, attachment, arrest, sequestration or distress is being contested in good faith and on substantial grounds and is discussed or withdrawn within thirty (30) days of the occurrence thereof; or
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(iii)	any administrative or other receiver is appointed over any asset of the Borrower; or
(iv)	an administrator is appointed (whether by the court or otherwise) in respect of the Borrower;
---	---
(v)	the Borrower makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or a winding up or administration order is made in relation to the Borrower, or the members or directors of the Borrower passes a resolution to the effect that it should be wound up, placed in administration; or
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(vi)	a resolution is passed, an administration notice is given or filed, a bona fide application or petition to a court is made or presented or any other step is taken by (aa) the Borrower or the Guarantor (bb) the members or directors of the Borrower or the Guarantor, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of the Borrower or the Guarantor, or (dd) a government minister or public or regulatory authority of a Relevant Jurisdiction for or with a view to the winding up of the Borrower and the Guarantor or the appointment of a provisional liquidator or administrator in respect of the Borrower or the Guarantor ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a person other than the Borrower and the 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 three months after the commencement of the winding up
---	---
(vii)	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 the Borrower or of the Guarantor (other than a holder of Security Interests which together relate to all or substantially all of its assets) for the winding up of the Borrower or the Guarantor or the appointment of a provisional liquidator or administrator in respect of any of the above in any Relevant 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 Borrower or the Guarantor will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure
---	---
(viii)	a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of the Borrower unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition; or
---	---

(ix)	the Borrower petitions a court, or presents any proposal for, any form of judicial or non‑judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
(x)	any meeting of the members or directors of the Borrower is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi) above; or
---	---
(xi)	in a Relevant Jurisdiction other than England, any event occurs or any procedure is commenced which, in the reasonable opinion of the Majority Lenders, is similar to any of the foregoing; or
---	---
(i)	the Borrower 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
---	---
(j)	it becomes unlawful in any Relevant 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 Account Bank or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
---	---
(k)	any consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders (acting reasonably) consider material of a Finance Document 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
---	---
(l)	it appears to the Majority Lenders that, without their prior consent, a change has occurred after the date of this Agreement in the legal or beneficial ownership of the shares in the Borrower or in the ultimate control of the voting rights attaching to any shares of the Guarantor as declared to the Agent prior to the execution of this Agreement. For the avoidance of doubt the Agent consents and agrees to any changes relating to the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement; or
---	---
(m)	any provision which the Majority Lenders (acting reasonably) 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 third party claim or interest; or
---	---

(n)	the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
(o)	If any debt of any Security Party (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) is not paid when due or any debt of any Security Party (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) becomes due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by the relevant Security Party of a voluntary right of prepayment), or any creditor of any Security Party becomes entitled to declare its claim (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) due and payable, or any facility or commitment available to any Security Party is withdrawn, suspended or cancelled by reason of any default (however described) of such Security Party, and such debt is not discharged within seven (7) Business Days; or
---	---
(p)	any of the following occurs in relation to the Ship:
---	---
(i)	the Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of the Borrower (for any reason other than the reason of a Total Loss of the Ship) and the Borrower shall fail to procure the release of the Ship within a period of forty (40) days thereafter; or
---	---
(ii)	any change to the name or port of registry, or flag of the Ship is made without the prior written consent of the Agent (acting on the authority of the Majority Lenders), (such consent not to be unreasonably withheld) or the registration of the Ship in the ownership of the Borrower under the laws and flag of the Approved Flag State is cancelled or terminated without the prior written consent of the Agent or, if the Ship is only provisionally registered on the Drawdown Date of the Loan and is not permanently registered under the laws and flag of Approved Flag State at least five (5) days prior to the deadline for completing such permanent registration; or
---	---
(iii)	in the event of hostilities in any part of the world (whether war is declared or not), the Ship is entered or trades to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the prior written consent of the Majority Lenders has been given and the Borrower, has (at its expense) effected any special, additional or modified insurance cover which the Majority Lenders may require or an Approved Flag State, becomes involved in hostilities or civil war or there is a seizure of power in the relevant Approved Flag State by unconstitutional means if, in any such case, such event could in the opinion of the Majority Lenders reasonably be expected to have a Material Adverse Effect on the security constituted by any of the Finance Documents and the Borrower fails to register the Ship under another Approved Flag State as and when requested by the Majority lenders or do such other action as the Agent may reasonably require to ensure that such event or circumstance will not have a Material Adverse Effect within 30 days of notice from the Agent or such longer period as the Agent may in its discretion agrees; or
---	---

(iv)	any Relevant Person and/or the Approved Manager and/or any of their respective Environmental Affiliates fails to comply with any Environmental Approval or any Environmental Law and all other laws or regulations relating to the Ship, her operation and management (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port) or the Ship is involved in any incident which gives rise or which may give rise to any Environmental Claim, if in any such case, such non-compliance or incident or the consequences thereof could be expected to have a material adverse effect on the business assets, operations, property or financial condition of the Borrower or the Guarantor or any other Security Party or on the security created by any of the Finance Documents; or
(v)	a Security Party or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which the Ship is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover in relation to the Ship (including without limitation, liability for Environmental Claims arising in jurisdictions where the Ship operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
---	---
(vi)	the Ship ceases to be managed by the Approved Manager (for any reason other than the reason of a Total Loss or sale of the Ship) without the approval of the Majority Lenders (not to be unreasonably withheld) and the Borrower fails to appoint another Approved Manager prior to the termination of the mandate with the previous Approved Managers or any of them; or
---	---
(vii)	any Earnings of the Ship are not paid to the Earnings Account for any reason whatsoever (other than with the Agent’s prior written consent); or
---	---
(viii)	the Ship ceases to comply with the ISM Code or, as the case may be, the ISPS Code; or
---	---
(q)	any other event occurs or any other circumstances arise or develop including, without limitation:
---	---
(i)	a Material Adverse Effect; or
---	---
(ii)	any accident or other event involving the Ship in the light of which the Majority Lenders (acting reasonably) consider that there is a significant risk that the Borrower is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due.
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19.2	Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default which is continuing:
---	---

(a)	the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
(i)	serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are terminated; and/or
---	---
(ii)	serve on the Borrower a notice stating that the Loan, all 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) above, 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) above, the Security Trustee, the Agent and/or the Lenders 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, the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall terminate.
---	---
19.4	Acceleration of Loan. On the service of a notice under paragraph (a)(ii) of Clause 19.2, the Loan, all 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 paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause 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, the Account Bank and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the 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 Parties’ rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 and Clause 3.2.
---	---

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 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 caused by the gross negligence 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	Interpretation. In Clause 19.1 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(h) “petition” includes an application.
---	---
19.10	Relevant Persons. In this Clause 19, a “Relevant Person” means the Borrower, the Guarantor, the Approved Manager and any other Security Party.
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20.	FEES AND EXPENSES
---	---
20.1	Evaluation Costs and Expenses – Commitment Fee
---	---
(a)	The Borrower shall irrevocably and unconditionally pay to the original Lender specified in Schedule 1 (The lenders and their Commitments) of this Agreement, a non-refundable amount equal to zero point seventy five (0.75%) per centum on the Drawdown Date of the Loan representing the cost and expenses for the evaluation of the Commitment and the terms on which it shall be made available (as outlined in this Agreement) and the arrangement of the drawdown of the Loan, whether in whole or in part.
---	---
(b)	The Borrower shall pay to the Agent a commitment fee at the rate of zero point thirty five per cent (0.35%) per annum on the undrawn portion of the Maximum Facility Amount, such fee accruing from the date hereof and being payable quarterly in arrears to the Agent on account of the Lenders on the earliest of:
---	---

(i) 31 December 2023; or

(ii) the Drawdown Date; or

(iii) the date upon which the Borrower shall have given written notification to the Agent as to its intention not to make use of the Loan.

(c)	The Evaluation Costs and Expenses and Commitment Fee referred to in this Clause 20.1 shall not be refundable irrespective of whether the Loan is drawn or not.
20.2	Costs of negotiation, preparation etc. The Borrower shall pay to the Agent on its demand the amount of all expenses (including, but not limited to, all legal expenses and VAT, if applicable) 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, other than any syndication costs/expenses.
---	---
20.3	Costs of variations, amendments, enforcement etc. The Borrower shall pay to the Agent, on the Agent's demand, the amount of all expenses incurred by a Lender in connection with:
---	---
(a)	any amendment or supplement to a Finance Document, or any proposal for such an amendment or supplement to be made, including, but not limited to, an amendment pursuant to or contemplated by Clause 24.7;
---	---
(b)	any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document;
---	---
(c)	the valuation of any security provided or offered under Clause 15 or any other matter relating to such security;
---	---
(d)	any step taken by the Agent or the Security Trustee 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.
---	---
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 liabilities and expenses resulting from any failure or delay by the Borrower to pay such a tax.
---	---
20.5	Certification of amounts. A notice which is signed by at least one officer 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, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.
---	---
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 written demand and the Security Trustee on its demand in respect of all expenses, liabilities and losses which are 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:
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(a)	the Loan 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)	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;
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(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 payable on demand, three (3) days following the date on which the written demand is served (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 8);
---	---
(d)	the occurrence and/or continuance of an Event of Default or a Potential Event of Default (including, but not limited to, a breach of Clauses 11.17 or 11.19) and/or the acceleration of Loan under Clause 19.4;
---	---

and in respect of any tax (other than tax on its overall net income or which relates to a FACTA Deduction) 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 covers any liability, expense 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 reversing or otherwise in connection with, any open position arising under this Agreement.
---	---
21.3	Miscellaneous indemnities. The Borrower shall fully indemnify the Agent and the Security Trustee severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind (“liability items”) which may be made or brought against, or incurred by, the Agent or the Security Trustee, in any country, in relation to:
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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;
---	---
(b)	any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document;
---	---

other than liability items which are shown to have been caused by the gross negligence or the wilful misconduct of the Agent's or (as the case may be) the Security Trustee's own officers or employees.

Without prejudice to its generality, this Clause 21.3 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	Extension of indemnities; environmental indemnity. Without prejudice to its generality, Clause 21.3 covers:
(a)	any matter which would be covered by Clause 21.3 if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and
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(b)	any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment if such liability items would not have arise or asserted against the Lender or Agent or the Security Trustee (as the case may be) if any of them had not entered into any of the Finance Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Finance Documents.
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21.5	Currency indemnity. If any sum due from the Borrower or any other 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:
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(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 or such other Security Party shall indemnify the Creditor Party concerned against any 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 21.5, 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 21.5 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.

21.6	Certification of amounts. A notice which is signed by 1 officer 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, save for manifest error, 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, 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.
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21.8	Mandatory Costs. The Borrower shall, on demand by the Agent, pay to the Agent for the account of a Lender, such amount which any Lender certifies in a notice to the Agent to be its good faith determination of the amount necessary to compensate it for complying with:
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(a)	in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that lending office; and
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(b)	in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Loan.
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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;
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(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.
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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 “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.
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22.5	FATCA Information.
---	---
(a)	Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:
---	---
(i)	confirm to that other Party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party;
---	---
(ii)	supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
---	---
(iii)	supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
---	---
(b)	If a Party confirms to another Party pursuant to paragraph (a) (i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
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(c)	Paragraph (a) 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 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 party for purposes of this paragraph (c).
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(d)	If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then 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 until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
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22.6	FATCA Deduction
(a)	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.
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(b)	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 Borrower and the Agent and the Agent shall notify the other Creditor Parties.
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22.7	Contractual recognition of Bail-In.
---	---

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a)	any Bail-In Action in relation to any such liability applicable to such Party, including (without limitation):
(i)	a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
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(ii)	a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
---	---
(iii)	a cancellation of any such liability; and
---	---
(b)	a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability applicable to such Party.
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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:
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(a)	unlawful or prohibited (including, without limitation, due to a breach of Clauses 11.17 or 11.19) 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 maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

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 which the Agent receives from the Notifying Lender.
23.3	Prepayment; termination of Commitment. On the Agent notifying the Borrower under Clause 23.2, 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 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.
---	---
23.4	Mitigation. If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, 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.
---	---
24.	INCREASED COSTS
---	---
24.1	Increased costs. This Clause 24 applies if the Notifying Lender notifies the Agent 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 regulation 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 (including, but not limited to, Basel II, Basel III, CRD IV and CRR),
---	---

the Notifying Lender considers that it (or any of its Affiliates) has incurred or will incur an “increased cost”, that is to say:

(i)

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 any Finance Document 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; or

(ii)	a reduction in the amount of any payment to the Notifying Lender under this Agreement or any Finance Document or in the effective return which such a payment represents to the Notifying Lender or on its capital;
(iii)	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
---	---
(iv)	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 (or any of its Affiliates) under this Agreement or any Finance Document,
---	---

but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or any of its Affiliates) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or which is attributable to a FATCA Deduction.

For the purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

24.2	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.
24.3	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.
---	---
24.4	Notice of prepayment. If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, 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.
---	---
24.5	Prepayment; termination of Commitment. A notice under Clause 24.4 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.
---	---
24.6	Application of prepayment. Clause 8 shall apply in relation to the prepayment.
---	---

24.7	Changes to Reference Rates
(a)	Subject to paragraph (b) of Clause 27.2, any amendment or waiver which relates to:
---	---
(i)	providing for the use of a Replacement Reference Rate; and
---	---
(ii)	aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
---	---
(iii)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement;
---	---
(iv)	implementing market conventions applicable to that Replacement Reference Rate;
---	---
(v)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
---	---
(vi)	adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation,
---	---

may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrower.

(b)	If any Lender fails to respond to a request for an amendment or waiver described in, or for any other vote of Lenders in relation to, paragraph (a) above within 5 Business Days (or such longer time period in relation to any request which the Borrower and the Agent may agree) of that request being made:
(i)	its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and
---	---

(ii)	its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(c)	In this Clause 24.7:
---	---

“Published Rate” means:

(a)	SOFR; or
(b)	Term SOFR for any Quoted Tenor.
---	---

“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.

“Replacement Reference Rate” means a reference rate which is:

(a)	formally designated, nominated or recommended as the replacement for a Published Rate by:
(i)	the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
---	---
(ii)	any Relevant Nominating Body,
---	---

(b)	in the opinion of the Majority Lenders and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
(c)	in the opinion of the Majority Lenders and the Borrower, an appropriate successor or alternative to a Published Rate.
---	---
25.	SET‑OFF
---	---
25.1	Application of credit balances. Each Creditor Party may without prior notice at any time after the occurrence of an Event of Default which is continuing:
---	---
(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 and/or the Guarantor at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower and/or the Guarantor 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 and/or the Guarantor;
---	---
(ii)	convert or translate all or any part of a deposit or other credit balance into Dollars;
---	---
(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 Borrower and/or the Guarantor 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 gives the Lenders 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 and/or the Guarantor.
---	---
25.5	No Borrower’s/Guarantor’s set off. The Borrower and/or the Guarantor shall not have a right of set off in relation to sums that may be due from any Creditor Party under this Agreement or any of the other Finance Documents.
---	---
26.	TRANSFERS AND CHANGES IN LENDING OFFICES
---	---
26.1	Transfer by the Borrower. The Borrower may not:
---	---
(a)	without the prior written consent of the Agent (given on the instructions of all of the Lenders), transfer any of its rights or obligations under any Finance Document;
---	---
(b)	without the prior written consent of the Agent (given on the instructions of all the Lenders), enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.
---	---
26.2	Transfer by a Lender. Subject to Clause 26.4, a Lender (the “Transferor Lender”) may, at its sole discretion and at the expense of the Transferee Lender (as hereinafter defined), without the consent of and/or the prior consultation with the Borrower (but with notice to the Borrower) and/or any Security Party, at any time assign or transfer by novation (as applicable):
---	---

(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);
---	---

to be (in the case of its rights) assigned or transferred to, or (in the case of its obligations) assumed by and novated to, another bank or financial institution, or another branch, any Subsidiary or Affiliate of, or company controlled by, the Lender or a member of the European Central Bank System, a credit institution, a financial services institution, a financial institution, an insurance company, a social security a pension fund, a hedge fund, an investment company/trust or a special purpose company established for the purposes of securitization, or by 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 4 with any modifications approved or required by the Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender and should the Transfer Certificate alone be not sufficient in the Transferor Lender’s or Transferee Lender's jurisdiction for a Transferor Lender to transfer all or a proportionate share of the Transferor Lender's interest in the security constituted by the Finance Documents, the Borrower hereby undertakes, immediately on being requested to do so by the Agent and at the cost of the Transferee Lender, to enter into, and procure that the other Security Parties shall (at the cost of the Transferee Lender) enter into, such documents as may be necessary or desirable to transfer to the Transferee Lender all or the relevant part of such Lender’s interest in the Finance Documents and all relevant references in this Agreement to such Lender shall thereafter be construed as a reference to the Transferor Lender and/or its Transferee Lender (as the case may be) to the extent of their respective interests.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be dealt with separately in accordance with the Agency and Trust Deed.

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 Arranger, the Account Bank and each of the Lenders;
---	---
(b)	on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes or electronic mail notifying them of the Transfer Certificate and attaching a copy of it;
---	---
(c)	send to the Transferee Lender copies of the letters or faxes or electronic mail 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. 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 other 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 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. In addition, where security rights (such as pledge and mortgage rights) created in the interest of the Lender concerned were transferred to the successor as a result of such a merger, de-merger or other reorganisation, then such rights will serve as if they were created in the interest of the successor.
---	---
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, interests and/or obligations (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned and/or transferred by novation (as applicable) 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 other 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 other 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 21, 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 other 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) 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.

---

26.10	Authorisation of Agent to sign Transfer Certificates. The Borrower, the Arranger, the Account Bank, the Security Trustee, 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 $2,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender. Such fees will not burden any of the Security Parties under any circumstances.
---	---
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 other 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 to a Transferee Lender. A Lender may disclose to a potential Transferee Lender or sub‑participant any information necessary to effect the relevant transaction which the Lender has received in relation to the Borrower, any other Security Party or their affairs under or in connection with any Finance Document, provided that the Lender shall ensure that such person shall have entered into an undertaking of confidentiality with the Lender.
---	---
26.14	Change of lending office. A Lender may change its lending office without consultation with the Borrower 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	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, the Borrower or any other 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 Lender as a party to any of the Finance Documents; or
(ii)	require any payments to be made by the Borrower or any other 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.
---	---
26.17	DAC6. Nothing in any Finance Document shall prevent disclosure of any confidential information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A1 of Annex IV of Directive 2011/16/EU, if applicable.
---	---
26.	18 Disclosure of information to a service provider. Further to Clause 26.13 and without limiting the foregoing, the Borrower authorises any of the Lenders to disclose all information related or connected to:
---	---
(a)	the Ship or any other vessel owned or operated by a Security Party;
---	---
(b)	the negotiation, drafting and content of this Agreement and the Finance Documents;
---	---
(c)	the Loan; or
---	---
(d)	any Security Party,
---	---

to a Transferee Lender or a potential Transferee Lender or to any other person who may propose entering into contractual relations with the Lender in relation to this Agreement to any service provider (included but not limited to professional advisers, auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisers and brokers) which any of the Lenders may in its discretion deem necessary or desirable in connection with this Agreement or any other Finance Documents and/or the protection or enforcement of its rights thereunder, provided that the recipient has agreed to treat the information as confidential.

27.

VARIATIONS AND WAIVERS

27.1

Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2, 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 or electronic mail, 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.

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27.2	Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 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 Applicable Margin or in the calculation of Interest;
---	---
(b)	a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, or other sums payable under this Agreement;
---	---
(c)	an increase in any Lender's Commitment;
---	---
(d)	an extension of the Availability Period;
---	---
(e)	a change to the definition of “Majority Lenders”, “Finance Documents”, “Restricted Party”, “Sanctions”, “Sanctions Authority” or “Sanctions List”;
---	---
(f)	a change to the preamble or to Clause 2, 3, 4, 5.1, 11.17, 11,19, 17, 19 or 30;
---	---
(g)	a change to Clause 3 or this Clause 27;
---	---
(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 and 27.2, 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:
---	---
(a)	a provision of this Agreement or another Finance Document; or
---	---
(b)	an Event of Default; or
---	---
(c)	a breach by the Borrower or any other 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,
---	---

27.4	Notification of Variation or Waiver. No variation or waiver may be made before the date falling ten (10) Business Days after the terms of that variation or waiver have been notified by the Agent to the Lenders. The Agent shall notify the Lenders reasonably promptly of any variations or waivers proposed by the Borrower.

27.5	Variation or Waiver: FATCA.
Notwithstanding the foregoing, if the Agent or a Lender reasonably believes that an amendment or waiver may constitute a “material modification” for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and the Agent accordingly, that amendment or waiver may, subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender (as the case may be).
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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 or electronic mail; 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 shall be sent:
---	---
(a)	to the Borrower: c/o Eurodry Ltd
---	---

4, Messogiou & Evropis Street

151 24, Maroussi

Athens, Greece

Fax No: +30 2111 804097

Email: aha@euroseas.gr

Attn: Mr. Tassos Aslidis/Simos Pariaros

(b)	to a Lender: At the address below its name in

Schedule 1 or (as the case may require) in the relevant Transfer Certificate;

(c)	to the Arranger, Account Bank and EUROBANK S.A.

Security Trustee: 83 Akti Miaouli & 1, Flessa Street

185 38 Piraeus

Greece

Fax No: +30 210 4587877;

(d)	to the Agent: EUROBANK S.A.

83 Akti Miaouli & 1, Flessa Street

185 38 Piraeus

Greece

Fax: +30 210 4587877

Email: ShippingLoansAdministration@eurobank.gr

or to such other person, address or fax number as is notified by the Borrower or any other Security Party or the Agent, the Security Trustee or a Lender (as the case may be) to the other parties to this Agreement in writing.

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;
---	---
(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;
---	---
(c)	a notice which is sent by e-mail shall be deemed to be effective in accordance with paragraphs (c) and (d) of Clause 28.7.
---	---
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
---	---
(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 one 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,
---	---
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.
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28.7	Electronic communication.
---	---
(a)	Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website), if those two Parties:
---	---

(i)	notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii)	notify each other of any change to their respective addresses or any other such information supplied to them by not less than five (5) Business Day’s notice.
---	---
(b)	Any such electronic communication as specified in paragraph (a) above to be made between a Security Party and the Agent or any other Creditor Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
---	---
(c)	Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and, in the case of any electronic communication made by a Party to the Agent or any other Creditor Party, only if it is addressed in such a manner as the Agent or such other Creditor Party shall specify for this purpose.
---	---
(d)	Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
---	---
(e)	Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 28.7.
---	---
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 “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.
---	---

29.3	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.
29.4	Counterparts. A Finance Document may be executed in any number of counterparts.
---	---
29.5	PATRIOT Act Notice. Each of the Agent and the Lenders hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies the Borrower and each other Security Party, which information includes the name and address of the Borrower and each other Security Party and such other information that will allow the Agent and each of the Lenders to identify the Borrower and each other Security Party in accordance with the PATRIOT Act.
---	---
30.	Governing LAW AND JURISDICTION
---	---
30.1	Governing 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	Jurisdiction.
---	---
(a)	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a "Dispute").
---	---
(b)	The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
---	---
(c)	This Clause 30.2 is for the benefit of the Creditor Parties only. As a result, no Creditor Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Creditor Parties may take concurrent proceedings in any number of jurisdictions.
---	---
30.3	Service of process.
---	---
(a)	Without prejudice to any other mode of service allowed under any relevant law, the Borrower (and the Borrower shall procure that each other Security Party, other than a Security Party incorporated in England and Wales):
---	---
(i)	irrevocably appoint Messrs Shoreside Agents Ltd at 5 St Helen’s Place, London EC3A 6AB, England (Tel.: +44 (0)203771 8869, fax: +44 (0)203771 8870, attention of: Mrs Electra Panayotopoulos (email:electra.panayotopoulos@shoresidelaw.com), Mr. Andrew Johnson (email Andrew.Johnson@shoresidelaw.com) as its agent for service of process in relation to proceedings of any kind, including an application for a provisional or protective measure (“proceedings”) before the English courts in connection with this Agreement and any other Finance Document; and
---	---

(ii)	agrees that (on the understanding that process has first duly been served upon the process agent) failure by a process agent to notify the Borrower or the relevant Security Party of the process will not invalidate the proceedings concerned.
(b)	If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Borrower must immediately (and in any event within seven (7) days of such event taking place) appoint another agent on terms reasonably acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose and will duly notify the Borrower on the contact details of the same.
---	---
30.4	Creditor Parties’ rights unaffected. Nothing in this Clause 30 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 settlement of any Dispute, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
---	---

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year first before written.

schedule 1

THE LENDERS AND THEIR COMMITMENTS

Name of Lender	Lending Office<br><br> <br>and<br><br> <br>contact details	Total Commitments ($)
Eurobank S.A.	Lending office<br><br> <br>83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece<br><br> <br><br><br> <br>Contact details<br><br> <br>83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece<br><br> <br>Fax No: +30 210 4587877<br><br> <br>Attn: Loans Administration	10,500,000

100

SCHEDULE 2

DRAWDOWN NOTICE

To: EUROBANK S.A.

83, Akti Miaouli

185 38 Piraeus

Greece

Attention: [Loans Administration] [●] 2023

1.	We refer to the loan agreement (the “Loan Agreement”) dated 12 October 2023 and made between (1) ourselves as Borrower, (2) the Lenders referred to therein and (3) yourselves as Arranger, Account Bank, Agent and as Security Trustee in connection with a secured term loan of up to $10,500,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
2.	We request to draw the Loan as follows:
---	---
(a)	Amount: $ [●];
---	---
(b)	Drawdown Date: [●] 2023;
---	---
(c)	Duration of the first Interest Period shall be [●] months;
---	---
(d)	Payment instructions: Please credit account of YANNIS NAVIGATION LTD and numbered [●] held with the Shipping Branch of EUROBANK S.A.].
---	---
3.	We represent and warrant that:
---	---
(a)	the representations and warranties in Clause 10 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at this date;
---	---
(b)	there has been no Material Adverse Change since the date of the accounts referred to in Clause 11.6 of the Loan Agreement;
---	---
(c)	the said Loan will be used for our own benefit and under our full responsibility and exclusively for the purposes specified in the preamble of the Loan Agreement; and
---	---
(d)	no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the said Loan.
---	---
4.	This notice cannot be revoked without the prior consent of the Majority Lenders.
---	---
5.	This notice is governed by English law.
---	---

Yours faithfully

[●]

authorised signatory for

YANNIS NAVIGATION LTD

101

SCHEDULE 3

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a):

1.	A duly executed original of this Agreement, the Agency and Trust Deed, the Guarantee and the Accounts Pledges.
2.	Copies of the certificate of incorporation and constitutional documents of the Borrower, the Guarantor and the Approved Manager, together with up to date evidence of the good standing.
---	---
3.	Originals of resolutions of the directors and shareholders of the Borrower and originals of the relevant minutes containing the resolutions of the directors of the Guarantor and the Approved Manager authorising the execution of each of the Finance Documents referred to at 1 above to which the Borrower and/or any other Security Party is a party and authorising named officers of the Borrower to give the Drawdown Notice and other notices under this Agreement.
---	---
4.	The original of any power of attorney under which any Finance Document referred to at 1 above is executed on behalf of the Borrower, the Guarantor and the Approved Manager.
---	---
5.	Copies of all consents which the Borrower or any other Security Party requires to enter into, or make any payment under, any Finance Document.
---	---
6.	All documentation required by the Agent in respect of the Borrower and any other Security Party pursuant to any Lender’s “Know your customer” requirements based on applicable laws and regulations from time to time and the Agent’s own internal guidelines from time to time, together with such other documents or evidence as such Lender may reasonably require with respect to money laundering regulations.
---	---
7.	Copies of the MOA and the Escrow Letter and of all documents signed or issued by the Borrower or the Sellers (or both of them) under or in connection with it and such documentary evidence as the Agent and its legal advisors may require in relation to the due authorisation and execution by the Borrower and the Sellers of the MOA and the Escrow Letter and of all documents to be executed by the Borrower and the Sellers.
---	---
8.	if applicable a copy of the Charter (and any addenda thereto).
---	---
9.	Documentary evidence that the agent for service of process named in Clause 30 of this Agreement has accepted its appointment.
---	---
10.	Favourable legal opinions from lawyers appointed by the Agent on such matters concerning English law or the laws of the Marshall Islands and/or Liberia and such other Relevant Jurisdictions as the Agent may require.
---	---
11.	A certificate in a form and substance satisfactory to the Lenders confirming the legal ownership and the beneficial ownership of the shares in the Borrower, in a form and substance satisfactory to the Agent in its sole discretion.
---	---

102

12.	The originals of any mandates or other documents required in connection with the opening and operation of the Earnings Account, the Retention Account and the Cash Collateral Account.
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.
---	---

PART B

The following are the documents referred to in Clause 9.1(b):

1.	The following delivery documents in respect of the Ship:
(a)	evidence that the ten per cent (10%) deposit in respect of the Ship has been duly paid and all other sums of money (other than the Loan where applicable) required to be paid by the Borrower to the Sellers pursuant to the MOA and the Escrow Letter have been duly paid on the Delivery Date;
---	---
(b)	evidence proving the Sellers’ title to the Ship free of any Security Interests, liens, debts or claims of any nature whatsoever;
---	---
(c)	copies of the corporate documentation of the Sellers proving the legal existence of the Sellers and the due authorization of the sale of the Ship;
---	---
2.	On the Delivery Date prior to or simultaneously with the release of the Purchase Price to the Sellers and/or (as the case may be) immediately prior to the Drawdown Date:
---	---
(a)	evidence proving the Ship free of any Security Interests, liens, debts or claims of any nature whatsoever;
---	---
(b)	a duly executed original of (i) the Bill of Sale, (ii) the Protocol of Delivery and Acceptance and (iii) the Commercial invoice, each duly executed and delivered;
---	---
(c)	the Mortgage;
---	---
(d)	the General Assignment;
---	---
(e)	the Approved Manager’s Undertaking-Assignment;
---	---
(f)	the Guarantor’s Undertaking-Assignment;
---	---
(g)	if applicable, a Charter Assignment,
---	---

together with (if not already delivered pursuant to Schedule 3, Part A, paragraph 3) up to date evidence of the good standing, originals resolutions of the directors and shareholders of the Borrower and originals of the relevant minutes containing the resolutions of the directors of the Guarantor and the Approved Manager authorising the execution of each of the Finance Documents with respect to the execution of such Finance Documents, and all other documents required by any of such Finance Documents, including, without limitation, all notices of assignment and/or charge;

3.	Documentary evidence that as from the Delivery Date and/or (where applicable) as from the Drawdown Date:

103

(a)	the Ship is provisionally registered in the name of the Borrower under the Approved Flag;
(b)	the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents related to the Ship;
---	---
(c)	the Ship is classed with the highest available class with DNV or such any other first class classification society which is a member of IACS acceptable to the Agent, free of all overdue recommendations and conditions of such classification society affecting Class;
---	---
(d)	the Mortgage in respect of the Ship has been duly registered against the Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State;
---	---
(e)	the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances shall have been complied with; and
---	---
(f)	where the Ship is subject to a Charter, a signed copy of that Charter and/or a copy of the recap agreement containing the terms of the relevant fixture.
---	---
4.	Documents establishing that the Ship is, as from the Drawdown Date, managed by the Approved Manager on terms acceptable to the Agent, together with:
---	---
(a)	a copy of the ship management agreement for the Ship;
---	---
(b)	copies of the Document of Compliance and Safety Management Certificate and ISSC;
---	---
(c)	copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to the Borrower have requested not later than 2 days before the Drawdown Date, certified as true and complete in all material respects by the Borrower and the Approved Manager;
---	---
5.	Subordination letters from any other co-assureds named in the insurance policies for the Ship (other than the Borrower and the relevant Approved Manager), in the form required by the Agent;
---	---
6.	A valuation of the Ship addressed to the Agent (at the Borrower’s expense) prepared in accordance with Clause 15.4 of this Agreement and not older than thirty (30) days prior to the Drawdown Date of the Loan, in a form satisfactory to the Agent;
---	---
7.	Evidence that an aggregate sum equal to the Minimum Liquidity is standing to the credit of an account or accounts opened or to be opened with the Lenders/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrower or the Guarantor or any other entity acceptable to the Agent pursuant to the provisions of Clause 12.5 of this Agreement;
---	---
8.	A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the insurances for the Ship as the Agent may require, and at the cost and expense of the Borrower;
---	---
9.	Favourable legal opinions from lawyers appointed by the Lenders on such matters concerning the laws of England, the laws of Liberia, the laws of the Marshall Islands, the laws of the Approved Flag State (if different) and such other Relevant Jurisdiction as the Agent may require;
---	---

104

10.	Receipt by the original Lender specified in Schedule 1 (The lenders and their Commitments) of this Agreement of the amount referred to in Clause 20.1 (a) representing the Evaluation Costs and Expenses and of any other fees, costs and expenses due under Clause 20 of this Agreement;
11.	On the Delivery Date and/or (as the case may be) the Drawdown Date or as soon as practicable thereafter an extract of the trim and stability booklet certifying the lightweight of the Ship;
---	---
12.	A Statement of Compliance – Fuel Oil Consumption Reporting for the Ship and the trading certificates of the Ship promptly upon their issuance;
---	---

PART C

CONDITIONS SUBSEQUENT

(1)	Letters of undertaking. Letters of undertaking in respect of the Insurances as required by the Finance Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Creditor Parties.
(2)	Service of notices and acknowledgements of notices to the Charterer. Service of all notices of assignment and/or charge given pursuant to any Finance Documents by the Agent pursuant to Part A or Part B of this Schedule 3 and (on an effort basis) an acknowledgement by the Charterer of any notice of assignment executed in connection with a Charter Assignment, in any case provision of same is not delayed or denied by the Charterer.
---	---
(3)	Legal opinions. Such of the legal opinions specified in Part B of this Schedule 3 as have not already been provided to the Agent.
---	---
(4)	Ship’s trading certificates in force and relevant confirmation. (if not already delivered pursuant to Schedule 3, Part B, paragraph 12), copies of all trading certificates of the Ship as soon as practicable after the Delivery Date and/or (as the case may be) the Drawdown Date, to be in force and effect and a signed confirmation in writing by the Borrower, confirming that all trading certificates of the Ship are up to date and in full force as per the applicable rules and regulations thereto.
---	---

105

SCHEDULE 4

TRANSFER CERTIFICATE

To:	EUROBANK S.A. for itself and for and on behalf of the Borrower, each other Security Party, the Arranger, the Account Bank, the Agent, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below. [●]
1.	This Certificate relates to the loan agreement dated [●] October 2023 (the “Loan Agreement”) and made between (1) YANNIS NAVIGATION LTD as borrower (the “Borrower”), (2) the banks and financial institutions named therein as Lenders, (3) EUROBANK S.A. as Arranger, Account Bank, Agent and Security Trustee, for a secured term loan of up to $10,500,000.
---	---
2.	In this Certificate:
---	---

“the Relevant Parties” means the Agent, the Borrower, each other Security Party, the Security Trustee, the Arranger, the Account Bank and each Lender;

“the Transferor” means [full name] of [lending office];

“the Transferee” means [full name] of [lending office].

Terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate.

3.	The effective date of this Certificate is [●] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
4.	The Transferor [transfers by novation to the Transferee all rights, interests and obligations] or upon transfer of rights only [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 [●] per cent of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:
---	---
Contribution	Amount transferred
---	---
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 $[●]] [from [●] per cent. Of its Commitment, which percentage represents $[●]] and the Transferee acquires a Commitment of $[●].
---	---

106

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. [For the avoidance of doubt the Transferor shall remain as [●] under the Loan Agreement and the Finance Documents].
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 Creditor 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:
---	---
(i)	that 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)	that 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 [transfer] [assignment] in paragraph 4 above;
---	---
(c)	undertakes with the Transferee that the Transferor will, at the expense of the Transferee, 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 either the Transferor, the Agent, the Arranger, the Account Bank, the Security Trustee or any Lender in the event that:
---	---
(i)	the Finance Documents prove to be invalid or ineffective,
---	---
(ii)	the Borrower or any other Security Party fails to observe or perform its obligations, or to discharge its liabilities, under 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 Borrower or any other Security Party under the Finance Documents;
---	---
(c)	agrees that it will have no rights of recourse on any ground against the Agent, the Arranger, the Account Bank, 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 (i) that it has full capacity to enter into this transaction and has taken all corporate action and obtained all official consents which it needs to take or obtain in connection with this transaction; and (ii) that this Certificate is valid and binding as regards the Transferee; and
---	---

107

(e)	confirms the accuracy of the administrative details set out below regarding the Transferee; and
(f)	agrees to be responsible for all legal and other costs (including without limitation, notarial fees, breakage costs and, if applicable, VAT) incurred by the Transferor with respect to documenting the transfer and perfecting any security.
---	---
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 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 above 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.
---	---
12.	This Certificate (and any non-contractual obligations connected with it) shall be governed by and construed in accordance with English law, and may be executed in any number of counterparts, each of which shall be deemed an original).
---	---

[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

Eurobank S.A.

By: [●]

Date: [●]

108

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person:

(Loan Administration Department):

Telephone:

Fax:

Email:

Contact Person

(Credit Administration Department):

Telephone:

Fax:

Email:

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.

109

SCHEDULE 5

FORM OF COMPLIANCE CERTIFICATE

To: EUROBANK S.A.

83, Akti Miaouli

185 38 Piraeus

Greece

Attn: Loans Administration [date]

Dear Sirs

Loan Agreement dated [●] October 2023 (the “Loan Agreement”) made between (i) the Borrower referred to therein, (ii) the Lenders referred to therein and (iii) EUROBANK S.A. as Arranger, Account Bank, Agent and Security Trustee in connection with a loan facility of up to $10,500,000.

Terms defined in the Loan Agreement have their defined meanings when used in this Compliance Certificate.

We enclose with this certificate a copy of the annual audited consolidated financial statements of the Guarantor referred to in the Loan Agreement (the “Guarantor”) for the financial year commencing from the 31^st^ December 2023. The accounts (i) have been prepared in accordance with all applicable laws and GAAP principles and practices consistently applied, (ii) give a true and fair view of the state of affairs of the Borrower and the Guarantor 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 Borrower and the Guarantor.

We also enclose copies of the valuation of the Ship which is used in calculating the asset cover ratio under Clause 15.1 of the Loan Agreement as at [●].

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 mater or event]).]

We now certify that, as at [●].

(a) minimum liquidity balances equal to the Minimum Liquidity have been maintained in an Account or Accounts held with the Lenders/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrower or the Guarantor or any other entity acceptable to the Agent in line with Clause 12.5;

(b) the asset cover ratio under Clause 15.1 of the Loan Agreement is [●]%.

We hereby repeat the representations and warranties set out in Clause 10 of the Loan Agreement and confirm that they remain true and correct by reference to the facts and circumstances existing on the date of this Compliance Certificate.

This certificate shall be governed by, and construed in accordance with, English law.

Signed

____________________

authorised signatory for

YANNIS NAVIGATION LTD

110

Schedule 6

Form of Sustainability Performance Certificate

To:

From: YANNIS NAVIGATION LTD/EURODRY LTD.

Date [ ]

Dear Sirs

Loan agreement dated [●] October 2023 in respect of a loan of up to $10,500,000 (the “Loan Agreement”) made between (i) Yannis navigation Ltd as borrower (the “Borrower”), (ii) the banks and financial institutions listed in Schedule 1 thereto, as lenders (“the Lenders” or “a Lender”) and (iii) Eurobank S.A., as agent (the “Agent”), arranger (the “Arranger”), account bank (the “Account Bank”) and security trustee (the “Security Trustee”)

1.	We refer to the Loan Agreement. This is a Sustainability Performance Certificate. Words and expressions whose meanings are defined in the Loan Agreement shall have the same meanings when used herein.
2.	We hereby certify and confirm that, (i) the Ship’s CII Rating for the year ending on 31 December 20[●] was [●], (ii) the Ship’s Reported EEOI for the same period was [●] and the Borrower had two (2) directors being female [resulting in an Applicable Margin [reduction/increase] of [●]% per annum]/[and therefore the Applicable Margin will remain unchanged] in respect of the Loan until the end of the next Pricing Adjustment Period.
---	---
3.	The above calculation is based on the attached documents for the year ending [ ].
---	---

Yours faithfully

YANNIS NAVIGATION LTD /EURODRY LTD.

By________________________

[Director: […….Shipping]

[[Chief Executive Officer] [Chief Financial Officer]: EURODRY LTD.]

111

SCHEDULE 7

TIMETABLES

Delivery of a duly completed Drawdown Notice	Two Business Days before the intended Drawdown Date.
Reference Rate is fixed	Quotation Day

112

EXECUTION PAGES

THE BORROWER

Signed by )

Stefania Karmiri ) /s/ Stefania Karmiri

for and on behalf of )

YANNIS NAVIGATION LTD )

in the presence of

Witness: ___/s/ Aikaterini Maria Avramidou___

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE LENDERS

Signed by )

Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoleta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

in the presence of

Witness: ___/s/ Aikaterini Maria Avramidou _____

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

113

THE ARRANGER

Signed by )

Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoleta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

in the presence of

Witness: ___/s/ Aikaterini Maria Avramidou __

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE ACCOUNT BANK

Signed by )

Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoleta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

in the presence of

Witness: ___/s/ Aikaterini Maria Avramidou

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

THE AGENT

Signed by )

Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoleta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

in the presence of

Witness: ___/s/ Aikaterini Maria Avramidou __

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

114

THE SECURITY TRUSTEE

Signed by )

Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoleta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

in the presence of

Witness: ____/s/ Aikaterini Maria Avramidou ___

Name: Aikaterini Maria Avramidou

Address: 13, Defteras Merarchias Street

Piraeus, Greece

Occupation: Attorney-at-law

115

ex_655405.htm

EXHIBIT 4.27

THIS GUARANTEE is made on the 12^th^ day of October 2023

BETWEEN

(1)	EURODRY LTD., being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall Islands (the “Guarantor”); and
(2)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, acting for the purposes of this Agreement through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece (the “Security Trustee”, which expression includes its successors and assigns).
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BACKGROUND

(A)	By a loan agreement dated 12 October 2023 (hereinafter, as the same may be amended, supplemented, novated or varied from time to time, the “Loan Agreement”) and made between (i) YANNIS NAVIGATION LTD, a company incorporated in accordance with the laws of the Republic of Marshall Islands (the “Borrower””), as borrower, (ii) the banks and financial institutions listed in Schedule 1 thereto, which on the date hereof comprised only Eurobank S.A., as lenders (“the Lenders” or “a Lender”) and (iii) Eurobank S.A., as agent (the “Agent”), arranger (the “Arranger”), account bank (the “Account Bank”) and security trustee (the “Security Trustee” and together with the Lenders, the Agent the Arranger and the Account Bank, the “Creditor Parties”), it was agreed that the Lenders would make available to the Borrower a secured term loan facility of the lesser of (a) $10,500,000 and (b) 50% of the Market Value of the Ship (as therein defined) for the purposes and upon the terms and conditions set out therein.
(B)	By an agency and trust deed dated 12 October 2023 and entered into pursuant to the Loan Agreement (the “Agency and Trust Deed”), it was agreed that the Security Trustee, would hold the Trust Property on trust for the Lenders and the other Creditor Parties, in respect of their respective entitlements under the Finance Documents.
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(C)	It is one of the conditions precedent to the Lenders making available the facility under the Loan Agreement to the Borrower that the Guarantor executes this Guarantee in favour of the Security Trustee by way of security for all monies now or hereafter due or payable by the Borrower to the Lenders under or pursuant to the Loan Agreement and the other Finance Documents.
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IT IS AGREED as follows:

1	INTERPRETATION
1.1	Terms defined in the Loan Agreement. Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Guarantee unless the context otherwise requires or unless otherwise defined in this Guarantee.
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1.2	Construction of certain terms. In this Guarantee:
“bankruptcy” includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country;
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“Loan Agreement” means the loan agreement dated 12 October 2023 referred to in Recital (A) and includes any existing or future amendments or supplements, whether made with the Guarantor's consent or otherwise.
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1.3	Application of construction and interpretation provisions of Loan Agreement. Clauses 1.2 to 1.7 of the Loan Agreement apply, with any necessary modifications, to this Guarantee.
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1.4	Inconsistency between Loan Agreement provisions and this Guarantee. This Guarantee shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Guarantee, the provisions of the Loan Agreement shall prevail.
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1.5	Contractual recognition of bail-in. The Guarantor agrees to be bound by clause 22.7 (Contractual recognition of Bail-In) of the Loan Agreement as if it were a party to the Loan Agreement.
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2	GUARANTEE
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2.1	Guarantee and indemnity. The Guarantor unconditionally and irrevocably:
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(a)	guarantees the due payment of all amounts payable by the Borrower under or in connection with the Loan Agreement and the other Finance Documents and the punctual performance by the Borrower of all its respective obligations thereunder;
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(b)	undertakes to pay to the Security Trustee or any other Creditor Party, on the Security Trustee's demand, any such amount which is not paid by the Borrower when due and payable under or in connection with the Loan Agreement and any other Finance Document; and
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(c)	as a separate, continuing and primary obligation agrees to fully indemnify the Security Trustee and (to the extent applicable) each other Creditor Party on the Security Trustee’s demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Security Trustee or the other Creditor Party concerned as a result of or in connection with any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal; and the amount recoverable under this indemnity shall be equal to the amount which the Security Trustee or the other Creditor Party concerned would otherwise have been entitled to recover.
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2.2	No limit on number of demands. The Security Trustee may serve more than one demand under Clause 2.1.
2.3	Release of Guarantee. This Guarantee shall terminate and be cancelled upon the receipt by the Lender or any other Creditor Party of all amounts due or to become due to it hereunder in accordance with the terms hereof, whereupon, the Guarantor shall be fully released from any and all of its obligations hereunder and any other Finance Documents.
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3	LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
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3.1	Principal and independent debtor. The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.
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3.2	Waiver of rights and defences. Without limiting the generality of Clause 3.1, none of the following shall give rise to the Guarantor being discharged, or its having any cause of action against any Creditor Party:
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(a)	any amendment, novation, restatement or supplement being made to any of the Finance Documents;
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(b)	any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, any of the Finance Documents;
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(c)	any release or loss (even though negligent) of any right or Security Interest created by any of the Finance Documents;
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(d)	any failure (even though negligent) promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or
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(e)	any other Finance Document or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it.
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4	EXPENSES
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4.1	Costs of preservation of rights, enforcement etc. The Guarantor shall pay to the Security Trustee on its demand the amount of all expenses incurred by the Security Trustee or any other Creditor Party in connection with any matter arising out of this Guarantee or any Security Interest connected with it, including any advice, claim or proceedings relating to this Guarantee or such a Security Interest.
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4.2	Fees and expenses payable under Loan Agreement. Clause 4.1 is without prejudice to the Guarantor's liabilities in respect of the Borrower’s obligations under clause 20 of the Loan Agreement (fees and expenses) and under similar provisions of the other Finance Documents.
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5	ADJUSTMENT OF TRANSACTIONS
5.1	Reinstatement of obligation to pay. The Guarantor shall pay to the Security Trustee or, as the case may be, to any other Creditor Party on its demand any amount which any Creditor Party is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Borrower or of another Security Party (or similar person) on the ground that the Loan Agreement or any other Finance Document, or a payment by the Borrower or of another Security Party, was invalid or on any similar ground.
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6	PAYMENTS
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6.1	Method of payments. Any amount due under this Guarantee shall be paid:
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(a)	in immediately available funds;
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(b)	to such account as the Security Trustee may from time to time notify to the Guarantor;
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(c)	without any form of set‑off, cross‑claim or condition; and
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(d)	free and clear of any tax deduction except a tax deduction which the Guarantor is required by law to make.
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7	INTEREST
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7.1	Accrual of interest. Any amount due under this Guarantee shall carry interest after the date on which the Security Trustee or any other Creditor Party demands payment of it until it is actually paid, unless interest on that same amount also accrues under the Loan Agreement.
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7.2	Calculation of interest. Interest under this Guarantee shall be calculated and accrue in the same way as interest under clauses 5 (Interest) and 7 (Default Interest) of the Loan Agreement.
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7.3	Guarantee extends to interest payable under Loan Agreement. For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Loan Agreement, including that payable under clause 7 of the Loan Agreement.
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8	SUBORDINATION
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8.1	Subordination of rights of Guarantor. All rights which the Guarantor at any time has (whether in respect of this Guarantee or any other transaction) against the Borrower, any other Security Party or their respective assets shall be fully subordinated to the rights of the Security Trustee or any other Creditor Party under the Finance Documents; and in particular, the Guarantor shall not:
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(a)	claim, or in a bankruptcy of the Borrower or any other Security Party prove for, any amount payable to the Guarantor by the Borrower or any other Security Party, whether in respect of this Guarantee or any other transaction;
(b)	take or enforce any Security Interest for any such amount;
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(c)	claim to set-off any such amount against any amount payable by the Guarantor to the Borrower or any other Security Party; or
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(d)	claim any subrogation or other right in respect of any Finance Document or any sum received or recovered by a Creditor Party under a Finance Document.
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9	ENFORCEMENT
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9.1	No requirement to commence proceedings against the Borrower. Neither the Security Trustee nor any other Creditor Party will need to commence any proceedings under, or enforce any Security Interest created by, the Loan Agreement or any other Finance Document before claiming or commencing proceedings under this Guarantee.
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9.2	Conclusive evidence of certain matters. However, as against the Guarantor:
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(a)	any judgment or order of a court in England or the Marshall Islands or any other Relevant Jurisdiction in connection with the Loan Agreement; and
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(b)	any written statement or admission of the Borrower (absent any manifest error) in connection with the Loan Agreement or any other Finance Document,
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shall be binding and conclusive as to all matters of fact and law to which it relates.
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9.3	Suspense account. The Security Trustee and any Creditor Party may, for the purpose of claiming or proving in a bankruptcy of the Borrower or any other Security Party, place any sum received or recovered under or by virtue of this Guarantee or any Security Interest connected with it on a separate suspense or other nominal account without applying it in satisfaction of the Borrower’s obligations under the Loan Agreement or any other Finance Document.
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10	REPRESENTATIONS AND WARRANTIES
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10.1	General. The Guarantor represents and warrants to the Security Trustee as follows.
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10.2	Status. The Guarantor is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands, will be in compliance with the Republic of the Marshall Islands Economic Substance Regulations 2018 in accordance with its terms and time frame once the same becomes applicable and is not a FATCA FFI or a US Tax Obligor.
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10.3	Corporate power. The Guarantor has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
(a)	to execute this Guarantee; and
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(b)	to make all the payments contemplated by, and to comply with this Guarantee.
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10.4	Consents in force. All the consents referred to in Clause 10.3 remain in force and nothing has occurred which makes any of them liable to revocation.
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10.5	Legal validity. This Guarantee constitutes the Guarantor's legal, valid and binding obligations enforceable against the Guarantor in accordance with its terms subject to any relevant insolvency laws affecting creditors' rights generally.
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10.6	No conflicts. The execution by the Guarantor of this Guarantee and its compliance with this Guarantee will not involve or lead to a contravention of:
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(a)	any law or regulation; or
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(b)	the constitutional documents of the Guarantor; or
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(c)	any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets.
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10.7	No withholding taxes. All payments which the Guarantor is liable to make under this Guarantee may be made without deduction or withholding for or on account of any tax payable under any law of any Relevant Jurisdiction.
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10.8	No default. To the knowledge of the Guarantor, no Event of Default or Potential Event of Default has occurred and is continuing.
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10.9	Information. All information which has been provided in writing by or on behalf of the Guarantor to the Security Trustee or any other Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.2; all audited financial statements which have been so provided satisfied the requirements of Clause 11.4; and there has been no material adverse change in the financial position or state of affairs of Guarantor from that disclosed in the latest of those accounts which could (in the reasonable opinion of the Security Trustee or any other Creditor Party) affect the solvency of the Guarantor.
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10.10	No litigation. No legal or administrative action involving the Guarantor has been commenced or taken or, to the Guarantor's knowledge, is likely to be commenced or taken which, in either case, would be likely to have a Material Adverse Effect on the Guarantor's financial position or profitability.
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10.11	The Guarantor represents and warrants that:
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(a)	its total debt net of cash will not exceed 75% of the total market value of its assets; and
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(b)	the Guarantor’s minimum Net Worth **** listed in Nasdaq will throughout the Security Period be at least United States Dollars fifteen million ($15,000,000).
10.12	Disclosure of material facts. The Guarantor is not aware of any material facts or circumstances which have not been disclosed to the Security Trustee or any other Creditor Parties and which might, if disclosed, have adversely affected their decision (acting reasonably) considering whether or not to make loan facility of the nature contemplated by the Loan Agreement available to the Borrower.
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10.11	No immunity. Neither the Guarantor nor any of its assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement).
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10.12	Valid choice of Law. The choice by the Guarantor of English law to govern this Guarantee and the submission by the Guarantor to the jurisdiction of the English courts is valid and binding on the Guarantor.
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10.13	No Money Laundering. The Guarantor represents and warrants that the performance and discharge of its obligations and liabilities under this Guarantee and any other Finance Document to which the Guarantor is a party and the transactions and other arrangements effected or contemplated thereby will not involve or lead to contravention of any law, official requirements or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).
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10.14	Sanctions. Neither the Guarantor nor any other Security Party (a) is a Restricted Party, (b) is controlled directly or indirectly by a Restricted Party, (c) controls a Restricted Party or (d) has a Restricted Party serving as director or officer.
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10.15	P ari passu and subordinated indebtedness. The obligations of the Guarantor under the Guarantee are direct, general and unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Financial Indebtedness of the Guarantor, with the exception of any obligations which are mandatorily preferred by operation of law and not by contract, and any Financial Indebtedness of the Guarantor owing to any of its respective shareholders is subordinated in all respects to the Guarantor’s obligations under the Corporate Guarantee.
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10.16	Copy Loan Agreement. The Guarantor has received a copy of the Loan Agreement and represents and warrants that it is fully aware of all the terms and provisions of the Loan Agreement and the other Finance Documents and agrees to be bound by their terms and conditions in so far as they pertain the Guarantor.
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11	UNDERTAKINGS
11.1	General. The Guarantor undertakes with the Security Trustee to comply with the following provisions of this Clause 11 at all times during the Security Period, except as the Security Trustee may otherwise permit.
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11.2	Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee will be true and not misleading and will not omit any material fact or consideration.
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11.3	Provision of financial statements. The Guarantor will send to the Security Trustee:
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(a)	within 180 days after the end of each financial year of the Guarantor concerned, the annual audited and consolidated financial statements of the Guarantor and its subsidiaries, prepared in accordance with GAAP principles and practices consistently applied, such obligation commencing from the 31^st^ December 2023;
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(b)	send to the Agent, together with the Accounting Information referred to in paragraph (a) above, a Compliance Certificate;
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(c)	provide the Agent from time to time as the Agent may reasonably request and in form and substance satisfactory to the Agent with any information on the financial condition, commitments, business and operations of the Guarantor;
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(d)	keep the Agent advised with respect to all its major financial developments, including (but not limited to) sales or purchases of vessels, new loans, refinancing and/or restructuring of existing loans and contracts for term employment of vessels, as the Agent may from time to time reasonably request.
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11.4	Form of financial statements. All audited consolidated financial statements delivered under Clause 11.3 will:
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(a)	give a true and fair view of the state of affairs of the Guarantor at the date of those accounts and of the profit for the period to which those accounts relate; and
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(b)	fully disclose or provide for all significant liabilities of the Guarantor.
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11.5	Shareholder and creditor notices. The Guarantor will send the Security Trustee, at the same time as they are despatched, copies of all communications which are despatched to the Guarantor's shareholders and creditors or any class of them.
11.6	Consents. The Guarantor will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Security Trustee of, all consents required:
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(a)	for the Guarantor to perform its obligations under this Guarantee;
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(b)	for the validity or enforceability of this Guarantee;
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and the Guarantor will comply with the terms of all such consents.
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11.7	Maintenance of Security Interests. The Guarantor will:
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(a)	at its own cost, do all that it reasonably can to ensure that any Finance Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
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(b)	without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document to which it is a party with any court or authority in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Finance Document to which it is a party, give any notice or take any other step which may be or become necessary or desirable for any Finance Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
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11.8	Notification of litigation. The Guarantor will provide the Security Trustee with details of any legal or administrative action involving the Guarantor as soon as such action is instituted or it becomes apparent to the Guarantor 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 this Guarantee.
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11.9	Notification of default. The Guarantor will notify the Security Trustee as soon as the Guarantor becomes aware of:
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(a)	the occurrence of an Event of Default or a Potential Event of Default which are continuing; or
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(b)	any matter which indicates that an Event of Default or a Potential Event of Default which are continuing may have occurred;
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and will thereafter keep the Security Trustee fully up-to-date with all developments.
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11.10	Maintenance of status. The Guarantor will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands and will comply in all respects with the Republic of the Marshall Islands Economic Substance Regulation 2018 in accordance with its terms and time frame once the same becomes applicable.
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11.11	Negative pledge. The Guarantor shall procure that the Borrower will not, create or permit to arise any Security Interest over any asset present or future except Security Interests created or permitted by the Finance Documents and except for Permitted Security Interests.
11.12	No disposal of assets, change of business. The Guarantor will not, and shall procure that the Borrower will not:
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(a)	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 except in the usual course of its trading operations; or
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(b)	make any substantial change to the nature of its business from that existing at the date of this Guarantee.
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11.13	No merger etc. The Guarantor shall procure that the Borrower will not, enter into any form of merger, sub-division, amalgamation or other reorganisation, and undertakes that throughout the Security Period, no change shall be made to the legal or beneficial ownership of the shares in the Guarantor or the Chairman of the Guarantor without the prior written consent of the Lenders, which shall not be unreasonably withheld. For the avoidance of doubt the Lenders consent and agree to any changes relating to the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Guarantee.
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11.14	Maintenance of ownership of Borrower. The Guarantor shall remain the beneficial owner of the entire issued and allotted share capital of the Borrower, free from any Security Interest, and shall ensure that throughout the Security Period, no change shall be made to the legal ownership of the shares in the Borrower. For the avoidance of doubt the last sentence of Clause 11.13 above applies to this Clause 11.14.
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11.15	Sanctions.
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(a)	the Guarantor undertakes to comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply) in all respects with all Sanctions, including employing the Ship not allowing her employment in manner contrary to any Sanctions.
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(b)	the Guarantor undertakes not to use (and shall procure that no other Security Party shall use) any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Creditor Parties.
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(c)	the Guarantor undertakes to ensure (and shall procure that each other Security Party shall ensure) that no proceeds to the best of its knowledge (after reasonable enquiry) from any activity or dealing with a Restricted Party are credited to any bank account held with any Creditor Party in its name.
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(d)	the Guarantor undertakes (and shall procure that each other Security Party shall), to the extent permitted by law, promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.
11.16	Application of FATCA. The Guarantor shall not become a FATCA FFI or a US Tax Obligor, without the prior written consent of the Lenders.
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11.17	Pari Pasu. The obligations of the Guarantor under this Guarantee and each of the Finance Documents to which the Guarantor is or is to be a party are direct, general and unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Financial Indebtedness of the Guarantor except for obligations which are mandatorily preferred by operation of law and not by contract.
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11.18	Dividends. The Guarantor may declare or pay any dividends or other distribution as long as no Event of Default has occurred which is continuing and no Event of Default will result from the payment of said dividends.
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11.18	Minimum Liquidity. The Guarantor shall ensure that, from the date of this Guarantee the Guarantor and/or the Borrower and/or any other member of the Group or any other entity acceptable to the Agent will maintain during the Security Period on any of the Accounts with the Lender(s)/Lender(s)’ banking group or the Agent or the Account Bank the Minimum Liquidity, and any sums standing to the credit of the Cash Collateral Account shall be included in the accumulation of the Minimum Liquidity.
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12	JUDGMENTS AND CURRENCY INDEMNITY
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12.1	Judgments relating to Loan Agreement. This Guarantee shall cover any amount payable by the Borrower under or in connection with any judgment relating to the Loan Agreement.
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12.2	Currency indemnity. In addition, clause 21.5 (Currency indemnity) of the Loan Agreement shall apply, with any necessary adaptations, in relation to this Guarantee.
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13	SET‑OFF
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13.1	Application of credit balances. The Security Trustee may at any time after the occurrence of an Event of Default which is continuing without prior notice:
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(a)	apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of the Security Trustee or any other Creditor Party in or towards satisfaction of any sum then due from the Guarantor to the Security Trustee under this Guarantee; and
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(b)	for that purpose:
(i)	break, or alter the maturity of, all or any part of a deposit of the Guarantor;
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(ii)	convert or translate all or any part of a deposit or other credit balance into Dollars;
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(iii)	enter into any other transaction or make any entry with regard to the credit balance which the Security Trustee considers appropriate.
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13.2	Existing rights unaffected. The Security Trustee shall not be obliged to exercise any of its rights under Clause 13.1; 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 the Security Trustee or any other Creditor Party is entitled (whether under the general law or any document).
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14	NO SET-OFF OR TAX DEDUCTION
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14.1	No deductions. All amounts due from the Guarantor under this Guarantee shall be paid:
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(a)	without any form of set‑off, cross-claim or condition; and
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(b)	free and clear of any tax deduction except a tax deduction which the Guarantor is required by law to make.
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14.2	Grossing-up.
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(a)	If the Guarantor is required by law to make a tax deduction from any payment:
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(i)	the Guarantor shall notify the Security Trustee as soon as it becomes aware of the requirement;
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(ii)	the Guarantor shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
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(iii)	the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Security Trustee or any other 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.
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(b)	If the Guarantor is required to make a FATCA deduction, the provisions of Clause 22.6 (FATCA Deduction) of the Loan Agreement shall apply to this Guarantee as if they were incorporated into it with any necessary modifications.
14.3	Evidence of payment of taxes. Within 1 month after making any tax deduction, the Guarantor shall deliver to the Security Trustee documentary evidence satisfactory to the Lender that the tax had been paid to the appropriate taxation authority.
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14.4	Exclusion of tax on overall net income. In this Clause 14 “tax deduction” means any deduction or withholding for or on account of any present or future tax except tax on any Creditor Party’s overall net income.
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15	SUPPLEMENTAL
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15.1	Continuing guarantee. This Guarantee shall remain in force as a continuing security at all times during the Security Period.
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15.2	Rights cumulative, non-exclusive. The Security Trustee’s rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
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15.3	No impairment of rights under Guarantee. If the Security Trustee omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Security Trustee under this Guarantee.
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15.4	Severability of provisions. If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.
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15.5	Guarantee not affected by other security. This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which any Creditor Party may now or later hold in connection with the Loan Agreement.
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15.6	Guarantor bound by Loan Agreement. The Guarantor agrees with the Security Trustee to be bound by all provisions of the Loan Agreement which are applicable to the Security Parties in the same way as if those provisions had been set out (with any necessary modifications) in this Guarantee.
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15.7	Applicability of provisions of Guarantee to other Security Interests. Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 and 18 shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 and 18.
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15.8	Applicability of provisions of Guarantee to other rights. Clauses 3 and 18 shall also apply to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 and 18), being an agreement referring to this Guarantee.
15.9	Third party rights. A person (other than a Creditor Party) who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.
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16	TRANSFER
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16.1	Transfer by Security Trustee. The Security Trustee may transfer its rights under and in connection with this Guarantee to the same extent as it may transfer its rights under the Loan Agreement and the other Finance Documents.
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16.2	Benefit of this Guarantee. This Guarantee will bind the Guarantor and its successors and will enure to the benefit of the Creditor Parties and their respective successors, transferees and assigns, as if each of the other Creditor Parties had also been a Party. The Guarantor acknowledges the transfer provisions in clause 26 (Transfers and Changes in Lending Offices) of the Loan Agreement and agrees that any person in favour of whom a transfer is made in accordance with those provisions will be entitled to the benefit of this Guarantee.
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17	NOTICES
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17.1	Notices to Guarantor. Any notice or demand to the Guarantor under or in connection with this Guarantee shall be given by letter or fax or electronic mail at:
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Eurodry Ltd.

c/o Eurobulk Ltd.

4, Messogiou & Evropis Street

151 24 Maroussi

Greece

Fax No: +30 2111 804097

Attn: Tassos Aslidis/Simos Pariaros

or to such other address, fax number, or electronic mail or officer which the Guarantor may notify to the Security Trustee.

17.2	Application of certain provisions of Loan Agreement. Clauses 28.3, 28.4 and 28.5 of the Loan Agreement apply to any notice or demand under or in connection with this Guarantee.
17.3	Validity of demands. A demand under this Guarantee shall be valid notwithstanding that it is served:
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(a)	on the date on which the amount to which it relates is payable by the Borrower under the Loan Agreement;
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(b)	at the same time as the service of a notice under paragraph (a)(i) of clause 19.2 of the Loan Agreement;
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and a demand under this Guarantee may refer to all amounts payable under or in connection with the Loan Agreement without specifying a particular sum or aggregate sum.
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17.4	Notices to Security Trustee. Any notice to the Security Trustee under or in connection with this Guarantee shall be sent to the same address and in the same manner as notices to the Security Trustee under the Loan Agreement.
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18	INVALIDITY OF LOAN AGREEMENT
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18.1	Invalidity of Loan Agreement. In the event of:
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(a)	the Loan Agreement now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever, whether of a similar kind or not; or
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(b)	without limiting the scope of paragraph (a), a bankruptcy of the Borrower, the introduction of any law or any other matter resulting in the Borrower being discharged from liability under the Loan Agreement, or the Loan Agreement ceasing to operate (for example, by interest ceasing to accrue),
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this Guarantee shall cover any amount which would have been or become payable under or in connection with the Loan Agreement if the Loan Agreement had been and remained entirely valid, legal and enforceable, or the Borrower had not suffered bankruptcy, or any combination of such events or circumstances, as the case may be, and the Borrower had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Borrower under or in connection with the Loan Agreement shall include references to any amount which would have so been or become payable as aforesaid.
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18.2	Invalidity of Finance Documents. Clause 18.1 also applies to each of the Finance Documents to which the Borrower is a party.
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19	GOVERNING LAW AND JURISDICTION
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19.1	Governing law. This Guarantee and any non contractual obligations connected with it shall be governed by, and construed in accordance with, English law.
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19.2	Jurisdiction
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(a)	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Guarantee (including a dispute regarding the existence, validity or termination of this Guarantee or any non-contractual obligation arising out of or in connection with this Guarantee) (a "Dispute").
(b)	The Guarantor accepts that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly the Guarantor will not argue to the contrary.
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(c)	This Clause 19.2 is for the benefit of the Security Trustee only. As a result, the Security Trustee shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Security Trustee may take concurrent proceedings in any number of jurisdictions.
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19.3	Service of process.
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(a)	Without prejudice to any other mode of service allowed under any relevant law, the Guarantor:
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(i)	irrevocably appoints Messrs Shoreside Agents Ltd at 5 St Helen’s Place, London EC3A 6AB, England (Tel.: +44 (0)203771 8869, fax: +44 (0)203771 8870, attention of: Mrs Electra Panayotopoulos (email:electra.panayotopoulos@shoresidelaw.com), Mr. Andrew Johnson (email Andrew.Johnson@shoresidelaw.com) as its agent for service of process in relation to proceedings of any kind, including an application for a provisional or protective measure (“proceedings”) before the English courts in connection with this Guarantee; and
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(ii)	agrees that failure by a process agent to notify the Guarantor of the process will not invalidate the proceedings concerned.
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(b)	If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Guarantor must immediately (and in any event within seven (7) days days of such event taking place) appoint another agent on terms reasonably acceptable to the Security Trustee. Failing this, the Security Trustee may appoint another agent for this purpose and will duly notify the Guarantor on the contact details of the same.
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19.4	Security Trustee’s rights unaffected. Nothing in this Clause 19 shall exclude or limit any right which the Security Trustee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the settlement of any Dispute, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
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THIS GUARANTEE has been entered into on the date stated at the beginning of this Guarantee.

EXECUTION PAGE

GUARANTOR

EXECUTED AS A DEED )

by Stefania Karmiri )

for and on behalf of ) /s/ Stefania Karmiri

EURODRY LTD. )

of the Marshall Islands )

pursuant to a power of attorney )

dated 22 September 2023 )

in the presence of

Witness: __/s/ Avramidou Aikaterini Maria__

Name: Avramidou Aikaterini Maria

Address: 13, Defteras Merarchias Street

Piraeus, 18535, Greece,

Occupation: Attorney-at-law

SECURITY TRUSTEE

EXECUTED AS A DEED )

by Stavros Yagos ) /s/ Stavros Yagos

and Nikoletta Mitropoulou ) /s/ Nikoletta Mitropoulou

for and on behalf of )

EUROBANK S.A. )

pursuant to a power of attorney )

dated 23 July 2021 )

in the presence of

Witness: __/s/ Avramidou Aikaterini Maria___

Name: Avramidou Aikaterini Maria

Address: 13, Defteras Merarchias Street

Piraeus, 18535, Greece,

Occupation: Attorney-at-law

HTML Editor

EXHIBIT 4.28

THIS AGREEMENT is made on the twenty third (23^rd^) day of October 2023

BETWEEN:

(1)	(a) CHRISTOS ULTRA LP, a limited partnership formed in accordance with the laws of the Republic of the Marshall Islands whose registered office is situated at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“Borrower A”); and

(b) MARIA ULTRA LP, a limited partnership formed in accordance with the laws of the Republic of the Marshall Islands whose registered office is situated at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“Borrower B” and together with Borrower A, the “Borrowers” and each one of them, a “Borrower”)

(2)	THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as lenders (the “Lenders”);
(3)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as arranger through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Arranger”);
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(4)	EUROBANK S.A., ** a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as account bank through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Account Bank**”);
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(5)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as agent through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Agent”); and
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(6)	EUROBANK S.A., a banking societé anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece acting as security trustee through its branch at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece (the “Security Trustee”). ~~~~
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AND IT IS HEREBY AGREED as follows:

1.	PURPOSE, DEFINITIONS AND INTERPRETATION
1.1	Purpose
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This Agreement sets out the terms and conditions upon and subject to which it is agreed that the Lenders will make available to the Borrowers a senior secured term loan in up to two Advances in an aggregate amount of the lesser of (a) $22,000,000 in aggregate and (b) up to 50% leverage of the aggregate Market Value of the Ships, for the purpose of financing part of the Purchase Price of the Ships.

1.2	Definitions. ****

“Account” means (a) each of the Earnings Account(s), the Retention Account, and the Cash Collateral Account and (b) any other account opened, made or established for the purposes of this Agreement;

“Accounting Information” means the annual audited accounts for the Guarantor to be provided to the Agent in accordance with Clause 11.6 (a) of this Agreement (as the context may require);

“Accounts Pledges” means, together, the deed or deeds of pledge creating security over the Earnings Account, the Retention Account and the Cash Collateral Account, to be executed by a Borrower or, as the case may be, the Borrowers or, as the case may be, the Guarantor, or any other entity acceptable to the Agent in favour of the Lenders and/or Security Trustee and/or the Account Bank, in such form as the Agent may approve or require in compliance always with the laws governing same;

“Advance” means Advance A or Advance B;

“Advance A” means that part of the Loan to be made available to the Borrowers for the purpose of financing part of the Purchase Price of Ship A, such Advance not to exceed $11,000,000 or up to 50% of the Market Value of Ship A;

“Advance B” means that part of the Loan made or to be made available to the Borrowers for the purpose of financing part of the Purchase Price of Ship B, such Advance not to exceed $11,000,000 or up to 50% of the Market Value of Ship B;

“Affiliate” **** means a subsidiary of that person or a parent company of that person or any other subsidiary of that parent company;

“Agency and Trust Deed” means the agency and trust deed executed or to be executed between the Borrowers, the Lenders, the Arranger, the Account Bank, the Agent and the Security Trustee, in such form as the Agent may approve or require, as the same may from time to time be amended and/or supplemented;

“Applicable Margin” means:

(a)	two point ten per cent (2.10%) per annum on the amount of the Loan outstanding as the same may be reduced by the Sustainability Pricing Adjustment in accordance with Clause 5.10 (Sustainability Pricing Adjustment); or
(b)	if a Cash Collateral is standing to the credit of the Cash Collateral Account:
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(i)	one percent (1%) per annum on the amount of the Loan which is equivalent to the Cash Collateral standing to the credit of the Cash Collateral Account at any relevant time (on a dollar for dollar basis for the same rollover period as the Loan) and pledged in favour of the Lenders or the Security Trustee; and
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(ii)	two point ten per cent (2.10%) per annum on the amount of the Loan outstanding minus the Cash Collateral, as the same may be reduced in accordance with Clause 5.10 (Sustainability Pricing Adjustment);

“Approved Flag” means the flag of the Republic of the Marshall Islands or such other flag as the Agent may, in its sole and absolute discretion, approve as the flag on which a Ship shall be registered;

“Approved Flag State” means the Republic of the Marshall Islands or any other country in which the Agent may, in its sole and absolute discretion, approve that a Ship be registered;

“Approved Manager” means for the time being EUROBULK (FAR EAST) LTD. INC., a company incorporated in the Philippines with its principal office at 12^th^ Floor Ma. Natividad Bldg., 470 TM Kalaw cor., Sts., Ermita, Manila, Philippines or any other company appointed by the relevant Borrower owning each Ship with the prior written consent of the Agent (such consent not to be unreasonably withheld) from time to time as the commercial, technical and operational manager of such Ship;

“Approved Manager’s Undertaking-Assignment” means, in relation to a Ship, a letter of undertaking executed or (as the context may require) to be executed **** by the Approved Manager in favour of the Security Trustee for that Ship in the terms reasonably required by the Security Trustee, agreeing certain matters in relation to the Approved Manager and subordinating the rights of the Approved Manager against that Ship and the Borrowers to the rights of the Creditor Parties under the Finance Documents and incorporating also a first priority assignment of all the rights which the Approved Manager may have in the Insurances relating to that Ship (other than the right to be reimbursed for P&I claims under the “pay and be paid” rule), in such form as the Agent, acting on the instructions of the Majority Lenders, may approve or require, as the same may from time to time be amended and/or supplemented; ****

“Arranger” means EUROBANK S.A., having its registered office at 8, Othonos Street, Athens, Greece and acting through its office at 83 Akti Miaouli & 1, Flessa Street, Piraeus 185 38, Greece;

“Asset Cover Ratio” means one hundred and twenty per cent (120%) of the outstanding balance of the Loan;

“Availability Period” means the period commencing on the date of this Agreement and ending on:

(c)	the Latest Permissible Drawdown Date or such later date as the Lenders may agree with the Borrowers; or
(d)	if earlier, the date on which the Commitment is fully borrowed, cancelled or terminated;
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“Bail-In Action” means the exercise of any Write-down and Conversion Powers;

“Bail-In Legislation” means:

(a)	in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
(b)	in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;
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“Basel II” means:

(a)	the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel II: International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 as amended, supplemented or restated; and
(b)	any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel II";
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“Basel III” means:

(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
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(c)	any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";
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“Borrowers” means each one of the Borrowers as specified in the beginning of this Agreement;

“ Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in Athens, Piraeus, London and New York City and, in relation to the fixing of an interest rate, which is a US Government Securities Business Day;

“ Cash Collateral” means, at any relevant time, all sums standing to the credit of the Cash Collateral Account for the whole of an Interest Period in respect of which the Applicable Margin has been calculated and pledged in favour of the Lenders or the Security Trustee, at the Borrowers’ option and which may be released in whole or in part at the request of the Borrowers, provided always that no Event of Default has occurred which is continuing or would occur as a result of any such release;

“Cash Collateral Account” means an account and fixed time deposit account connected thereto or its renewals in the name of the Borrowers and/or the Guarantor, or any other entity acceptable to the Agent, as the case may be, with the Account Bank designated by the Agent as the Cash Collateral Account where any Cash Collateral is or may be deposited, at Borrower’s option, throughout the Security Period;

“Charged Property” means all of the assets of the Borrowers or any other Security Party which from time to time are, or are expressed or intended to be, the subject of the Finance Documents;

“ Charter” means, in relation to a Ship, any charter or other contract of employment whether already in existence, or not, of more than twelve months’ duration (taking into account any options to extend or renew contained therein) in respect of the employment of that Ship acceptable to the Agent;

“ Charter Assignment” means in relation to any Charter, a first priority assignment of any rights granted by the relevant Borrower who is a party to that Charter in favour of the Security Trustee, **** in such form as the Agent, acting on the instructions of the Majority Lenders, may approve or require, as the same may from time to time be amended and/or supplemented and respective notices of assignment and acknowledgements thereof;

“Classification Society” **** means in respect of a Ship, DNV or such other classification society which the Agent shall, at the request of the Borrower, have agreed in writing and shall be treated as the Classification Society of that Ship for the purpose of the Finance Documents;

“Code” means the United States Internal Revenue Code of 1986 (as amended);

“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);

“Commitment Fee” **** means the fee to be paid by the Borrowers to the Agent pursuant to Clause 20.1 (b);

“Commitment Letter” **** means the commitment letter dated 12 October 2023 addressed by the Agent to Eurobulk Ltd. duly accepted by the Borrowers and the Guarantor on 20 October 2023;

“Compliance Date” means 31 December of each calendar year (or such other dates as the Agent may agree pursuant to Clause 12.8);

“Contractual Currency” has the meaning given in Clause 21.5;

“Contribution” means, in relation to a Lender, the part of the Loan which is owing to that Lender;

“Creditor Party” means the Agent, the Security Trustee, the Arranger, the Account Bank and any Lender, whether as at the date of this Agreement or at any later time;

“CRR” means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

“DAC6” means the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU or any replacement legislation applicable in the United Kingdom;

“Delivery” means the delivery of a Ship from the relevant Sellers thereof to, and the acceptance of that Ship by, the respective Borrower pursuant to the relevant MOA and Escrow Letter;

“Delivery Date” means the date upon which the Delivery of a Ship occurs;

“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code;

“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, being a Business Day falling not later than the Latest Permissible Drawdown Date on which such Advance is or, as the context may require, shall be advanced to the Borrowers;

“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 owner of that Ship or (as the case may be) to the Security Trustee pursuant to the General Assignment or the Charter Assignment and which arise out of the use or operation of that Ship, including (but not limited to):

(a)

all freight, hire and passage moneys, compensation payable to owner of that Ship or (as the case may be) to the Security Trustee pursuant to the General Assignment in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;

(b)	all moneys which are at any time payable under Insurances in respect of loss of earnings;
(c)	contributions of any nature whatsoever in respect of general average; and
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(d)	if and whenever a Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above 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;
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“Earnings Account” means, in relation to a Ship, the account(s) and fixed time deposit account connected thereto or its renewals opened or to be opened in the name of each Borrower with the Account Bank, which is designated by the Agent, as an Earnings Account(s) for that Ship for the purposes of this Agreement;

“EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway;

“Environmental Approval” means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to a Ship or her operation or the carriage of cargo and/or passengers thereon and/or provisions of goods and/or services on or from that Ship required under any Environmental Law;

“Environmental Incident” means:

(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 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 or the relevant Borrower owning that Ship and/or any operator or manager is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
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(c)	any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the relevant Borrower owning that Ship 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;
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“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;

“EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

“Evaluation Costs and Expenses” **** means the amounts to be paid by the Borrowers under Clause 20.1 (a) hereof; ****

“Event of Default” means any of the events or circumstances described in Clause 19.1;

“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
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(c)	any agreement pursuant to the implementation of any treaty, law, regulation or other official guidance referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
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“FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA;

“FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction;

“Final Maturity Date” means six (6) years after the last Drawdown Date;

“Finance Documents” means:

(a)	this Agreement;
(b)	the Agency and Trust Deed;
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(c)	the Guarantee;
(d)	the Accounts Pledges;
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(e)	the Mortgages;
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(f)	the General Assignments;
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(g)	any Charter Assignments;
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(h)	the Approved Manager’s Undertakings;
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(i)	the Guarantor’s Undertaking-Assignments; and
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(j)	any other document (whether creating a Security Interest or not) which is executed at any time by the Borrowers 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 under this Agreement or any of the documents referred to in this definition;
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“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;
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(c)	under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
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(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;
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(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; or
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(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 (a) to (e) if the references to the debtor referred to the other person;
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“Financial Year” means, in relation to the Borrowers, each period of 1 year commencing on 1 January thereof in respect of which its accounts are or ought to be prepared;

“Funding Rate” means an individual rate notified by the Lenders to the Borrowers pursuant to paragraph (b) of Clause 5.4;

“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 first priority deed of assignment collateral to the Mortgage registered or to be registered thereon, executed or (as the context may require) to be executed by the relevant Borrower in favour of the Security Trustee, whereby the relevant Borrower shall assign to the Security Trustee the Insurances, the Earnings and any Requisition Compensation of that Ship, in such form as the Agent (acting on the instructions of the Majority Lenders) may approve or require, as the same may from time to time be amended and/or supplemented and respective notices of assignment and acknowledgements thereof;

“Group” means the Guarantor and its subsidiaries (including the Borrowers, in which the Guarantor has a majority interest through its subsidiaries);

“Guarantee" means the guarantee and indemnity given or, as the context may require, to be given by the Guarantor in favour of the Security Trustee in form and substance satisfactory to the Agent, as security for the Secured Liabilities and any and all obligations of the Borrowers under this Agreement;

“Guarantor” **** means EURODRY LTD. being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any other legal entity nominated by the Borrowers and accepted by the Agent which have, or as the context may require, shall or may at any time guarantee the obligations of the Borrowers under this Agreement and/or those of the other Security Parties to the Lenders and/or any other Creditor Party;

“Guarantor’s Undertaking-Assignment” **** means, in relation to a Ship, an undertaking to the Security Trustee in respect of that Ship executed or (as the context may require) to be executed by the Guarantor, being nominated as co-assured in the insurance policies for that Ship whereby the Guarantor would undertake throughout the Security Period, to subordinate any and all claims it may have against the relevant Borrower and/or that Ship to the claims of the Lenders under the Loan Agreement and the Finance Documents and would incorporate also a first priority assignment of all the rights which the Guarantor may have in the Insurances relating to that Ship (other than the right to be reimbursed for P&I claims under the “pay and be paid” rule);

“IACS” means the International Association of Classification Societies;

“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, which are effected in respect of that Ship, the Earnings or otherwise in relation to that 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;
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“Interest Period” means in relation to an Advance, the Loan or any part thereof, each period for the calculation of interest in respect of such Advance, the Loan or any part thereof ascertained in accordance with Clause 6;

(a)	either:

(b)	the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;

(a)	either:

(i) the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or

(b)	the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;

“ISSC” means a valid and current International Ship Security Certificate issued under the ISPS Code;

“Latest Permissible Drawdown Date” means the 31^st^ December 2023, being the latest date for drawdown of an Advance pursuant to Clause 4 hereof;

“Lender” means, subject to Clause 26.6:

(c)	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 Borrowers under Clause 26.14), its successor or assign, unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and
(d)	the holder for the time being of a valid Transfer Certificate;
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“Major Casualty” means, in relation to a Ship, any casualty to that 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 $750,000 or the equivalent in any other currency;

“Majority Lenders” means:

(c)	before the Loan has been made, Lenders whose Commitments are equal to or greater than 66 ⅔ per cent. of the Total Commitments; and
(d)	after the Loan has been made, Lenders whose Contributions are equal to or greater than 66 ⅔ per cent. of the Loan;
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“Management Agreement” **** means the agreement made between the relevant Borrower and the Approved Manager providing (inter alia) for the Manager to manage a Ship);

“Mandatory Costs” shall have the meaning given to it in Clause 21.8;

“Market Disruption Rate” means the Reference Rate;

“Market Value” means, in relation to a Ship, the market value of that Ship determined not earlier than one month prior to the relevant Drawdown Date and at least once a year thereafter by one separate, independent and reputable first class sale and purchase broker, appointed by and reporting to the Agent certifying the market value of that Ship on the basis set out in Clause 15.4 at the expense of the Borrowers in accordance with Clause 15.4 and 15.9 hereof;

“Material Adverse Change” means any event or series of events which, in the reasonable opinion of the Majority Lenders, has or will have a Material Adverse Effect;

“Material Adverse Effect” means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:

(a)	the business, operations, property, condition (financial or otherwise) or prospects of any Borrower or any other Security Party (other than the Approved Manager); or
(b)	the ability of any Borrower or any other Security Party (other than the Approved Manager), to perform its respective obligations under 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 pursuant to any of the Finance Documents or the rights or remedies of any Creditor Party under any of the Finance Documents;
---	---

“Maximum Facility Amount” means an amount equal to the lesser of (a) $22,000,000 in aggregate and (b) up to 50% leverage of the aggregate Market Value of the Ships; ****

“Minimum Liquidity” means free and unencumbered (other than in favour of the Lender(s)/Lender(s)’s banking group or the Agent or the Account Bank) minimum liquidity balances in aggregate of at least Three Hundred Thousand Dollars ($300,000) per Ship, including but not limited to any amounts held in the Cash Collateral Account which is to be held from the Drawdown Date and at all times thereafter during the Security Period in the form of cash deposited in an account or accounts opened or to be opened with the Lender(s)/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrowers or the Guarantor or any other entity acceptable to the Agent to be assessed on an annual average basis;

“MOAs” means:

(a)

in respect of Ship A, the memorandum of agreement dated 8 September 2023, as thereafter amended by (i) Addendum No 1 dated 2 October 2023, (ii) Addendum No 2 dated 2 October 2023 and (iii) Addendum No 3 dated 2 October 2023 entered into between the relevant Sellers, as sellers, Eurobulk Ltd as original buyers and the Borrower A as nominated buyers, in respect of the sale by such relevant Sellers and the purchase by the Borrower A of the Ship A and any and all further Addenda thereto; and

(b)

in respect of Ship B, the memorandum of agreement dated 8 September 2023 as thereafter amended by (i) Addendum No 1 dated 2 October 2023, (ii) Addendum No 2 dated 2 October 2023, (iii) Addendum No 3 dated 2 October 2023 and (iv) Addendum No 4 dated 12 October 2023, entered into between the relevant Sellers, as sellers, Eurobulk Ltd. as original buyers and the Borrower B as nominated buyers, in respect of the sale by such relevant Sellers and the purchase by the Borrower B of the Ship B and any and all further Addenda thereto,

---

and each of them a “MOA”;

“Mortgage” or “Mortgages” **** means, in relation to a Ship, the first priority or first preferred ship mortgage (as the case may be) on such Ship executed or to be executed by the relevant Borrower in favour of the Security Trustee under an Approved Flag (and Deed of Covenant collateral thereto if applicable), in such form as the Security Trustee may approve or require, as the same may from time to time be amended and/or supplemented;

“Net Worth” **** means the value of the total assets of the Guarantor minus total liabilities, as expressed in its financial statements; ****

“Notifying Lender” has the meaning given in Clause 23.1;

“Operator” means any person who is from time to time during the Security Period concerned in the operation of a Ship and falls within the definition of “Company” set out in rule 1.1.2. of the ISM Code;

“Protocol of Delivery and Acceptance” means the protocol of delivery and acceptance in respect of a Ship executed and delivered or (as the context may require) to be executed and delivered by or on behalf of the relevant Sellers and the relevant Borrower, evidencing the delivery and acceptance of that Ship pursuant to the relevant MOA and Escrow Letter, such protocol to be in a form satisfactory to the Agent;

“ Party” means a party to this Agreement or a Finance Document (together the “Parties”);

“ PATRIOT Act” means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

“Payment Currency” has the meaning given in Clause 21.5;

“Permitted Security Interests” means:

(h)	Security Interests created by the Finance Documents;
(i)	liens for unpaid crew’s wages in accordance with usual maritime practice;
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(j)	liens for salvage;
---	---

(k)	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;
(l)	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 owner of such Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(h);
---	---
(m)	any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where a Borrower is prosecuting or defending such action in good faith by appropriate steps; and
---	---
(n)	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;
---	---

“Potential Event of Default” means an event or circumstance which, with the giving of any notice, the lapse of time and/or the satisfaction of any other condition, would constitute an Event of Default;

“Purchase Price” means in relation to a Ship, the price to be paid the relevant Borrower to the relevant Sellers pursuant to the terms of the respective MOA and Escrow Letter or such other sum as is determined in accordance with the terms and conditions of the respective MOA and Escrow Letter;

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two US Government Securities Business Days before the first day of that period unless market practice differs in the relevant syndicated loan market, in which case the Quotation Day shall be determined by the Agent in accordance with that market practice (and if quotations would normally be given on more than one (1) day, the Quotation Day will be the last of those days);

“Reference Rate” means, in relation to the Loan or any part of the Loan:

(a)	the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b)	as otherwise determined pursuant to Clause 7,
---	---

and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero;

“Relevant Jurisdiction” means, in relation to the Borrowers or any other Security Party:

(a)	its jurisdiction of incorporation or formation (as applicable);
(b)	any jurisdiction where any Charged Property owned by it is situated;
---	---

(c)	any jurisdiction where it conducts its business; and
(d)	any jurisdiction whose laws govern the perfection of any of the Finance Documents entered into by it;
---	---

“Relevant Market” means the market for overnight cash borrowing collateralized by US Government Securities;

“Repayment Date” means a date on which a repayment is required to be made under Clause 8;

“Repayment Instalment” means each instalment of an Advance which becomes due for repayment by the Borrowers on a Repayment Date pursuant to 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”;

“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers;

“Restricted Party” means a person that is:

(a)	listed on, owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; or
(b)	located in, incorporated or formed under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person located in or organised under the laws of a Sanctioned Country; or
---	---
(c)	otherwise a target of Sanctions ("target of Sanctions" signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed);
---	---

“Retention Account” means an interest bearing account in the name of the Borrowers with the Lenders and/or the Account Bank, or any other account which is designated by the Agent as the Retention Account at its discretion for the purposes of this Agreement;

“Sanctions” means any economic, financial or trade sanctions laws, regulations, embargoes or other restrictive measures adopted, administered, enacted or enforced by any Sanctions Authority and/or any other body notified from time to time in writing to the Borrowers by the Agent, or otherwise imposed by any law or regulation to which the Borrowers, any other Security Party and the Lenders are subject (which shall include without limitation, any extra-territorial sanctions imposed by law or regulation of the United States of America);

“Sanctions Authorities” means together:

(a)	the United States government;
(b)	the United Nations Security Council;
---	---
(c)	the European Union or its member states ;
---	---
(d)	the United Kingdom; or
---	---
(e)	the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, and Her Majesty's Treasury (HMT);
---	---

“Sanctions List” means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, any list maintained by OFAC within its “the Consolidated Sanctions List”, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities;

“Secured Liabilities” means all liabilities which any Security Party, at the date of this Agreement or at any later time or times, has under or by virtue of any Finance Document and in the case of the Approved Manager under or by virtue of the Approved Manager’s Undertaking-Assignment 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 Interest” means:

(a)	any 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 the 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 (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 Borrowers, the 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 paragraph (j) of the definition of “Finance Documents”;

“Security Period” means the period commencing on the date of this Agreement and ending on such date as all obligations whatsoever of all of the Security Parties under or pursuant to the Finance Documents whensoever arising have been irrevocably paid, performed and/or complied with;

“Security Trustee” means EUROBANK S.A., having its registered office at 8, Othonos Street, Athens, Greece and acting through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece or any successor of it appointed under clause 5 of the Agency and Trust Deed;

“Sellers” means the entity specified as “Sellers” in the relevant MOA and Escrow Letter for a Ship;

“Ships” means:

(a)

the 2015 built bulk carrier “Giants Causeway” of 35,872 gross tons and 21,223 net tons, with IMO 9700081, currently registered under the British flag in the ownership of the relevant Sellers, which upon acquisition by Borrower A pursuant to the relevant MOA and Escrow Letter shall be registered in its ownership under the laws and flag of the Republic of the Marshall Islands under the name “CHRISTOS K” (“Ship A”);

(b)

the 2015 built bulk carrier “Sadlers Wells” of 35,872 gross tons and 21,223 net tons, with IMO 9698329, currently registered under the British flag in the ownership of the relevant Sellers, which upon acquisition by Borrower B pursuant to the relevant MOA and Escrow Letter shall be registered in its ownership under the laws and flag of the Republic of the Marshall Islands under the name “MARIA” (“Ship B”),

---

and “a Ship” means any of them;

“Specified Time” means a day or time determined in accordance with Schedule 7 (Timetables);

“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 her proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, excluding a requisition for hire unless she is within 40 days redelivered to the full control of such Ship’s owner;

---

(c)	any arrest, capture, seizure or detention of a Ship unless she is within 40 days redelivered to the full control of such Ship’s owner;
(d)	any hijacking or theft of a Ship unless she is within 6 months redelivered to the full control of such Ship’s owner;
---	---

“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 such Ship’s 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, provided that the Agent shall notify such Ship’s owner of such date as soon as practicable;

“Transfer Certificate” has the meaning given in Clause 26.2;

“Trust Property” has the meaning given in clause 3.1 of the Agency and Trust Deed;

“UK Bail-In Legislation” **** means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 BRRD) Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their Affiliates (otherwise than through liquidation, administration or other insolvency proceedings);

“Unpaid Sum” means any sum due and payable but unpaid by the Borrowers or a Security Party under the Finance Documents;

“US Government Securities Business Day" means any day other than:

(a)	a Saturday or a Sunday; and
(b)	a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities;
---	---

“US Tax Obligor” means:

(a)	any Borrower which is resident for tax purposes in the United States of America; or
(b)	a Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes;
---	---

“VAT" means:

(a)	any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(b)	any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere;
---	---

“Write-down and Conversion Powers” means:

(a)	in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b)	in relation to any other applicable Bail-In Legislation:
---	---
(i)	any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or Affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---
(ii)	any similar or analogous powers under that Bail-In Legislation; and
---	---
(c)	in relation to any UK Bail-In Legislation:
---	---
(i)	any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or Affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
---	---

(ii)	any similar or analogous powers under that UK Bail-In Legislation.
1.3	Construction of certain terms. In this Agreement:
---	---

“approved” means, for the purposes of Clause 13, 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 corporation, partnership, joint venture and unincorporated association;

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

“document” includes a deed; also a letter, fax or electronic mail;

“excess risks” means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of a Ship in consequence of her insured value being less than the value at which that 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 tax including VAT;

“law” includes any form of delegated legislation, any order or decree, 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 1.4;

“obligatory insurances” means all insurances effected, or which a Borrower is obliged to effect, under Clause 13 below or any other provision of this Agreement or another Finance Document;

“parent company” has the meaning given in Clause 1.5;

“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 therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision in the Norwegian Marine Insurance Plan;

“subsidiary” has the meaning given in Clause 1.5;

“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 24 of the Institute Time Clauses (Hulls) (1/10/83) or clause 25 of the Institute Time Clauses (Hulls) (1/11/1995).

1.4	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.

1.5	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 attached 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.

1.6	General Interpretation.
(a)	In this Agreement:
---	---
(iv)	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;
---	---
(v)	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; and
---	---
(vi)	words denoting the singular number shall include the plural and vice versa.
---	---
(b)	Clauses 1.1 to 1.5 and paragraph (a) of this Clause 1.6 apply unless the contrary intention appears.
---	---
(c)	References in Clause 1.2 to a document being in the form of a particular Schedule or Appendix include references to that form with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.
---	---
(d)	The clause headings shall not affect the interpretation of this Agreement.
---	---
(e)	This Agreement contains the entire agreement of the parties and its provisions supersede the provisions of the Commitment Letter any and all other prior correspondence and oral negotiation by the parties in respect of the matters regulated by this Agreement.
---	---
1.7	Event of Default. A Potential Event of Default and/or an Event of Default are “continuing” if either of them has not been remedied or waived in writing.
---	---
1.8	Joint and several liability
---	---
1.8.1	All obligations, covenants, representations, warranties and undertakings in or pursuant to the Finance Documents assumed, given, made or entered into by the Borrowers shall, unless otherwise expressly provided, be assumed, given, made or entered into by the Borrowers jointly and severally.
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1.8.2	Each of the Borrowers agrees that any rights which it may have at any time during the Security Period by reason of the performance of its obligations under the Finance Documents to be indemnified by any other Borrower and/or to take the benefit of any security taken by the Agent pursuant to the Finance Documents shall be exercised in such manner and on such terms as the Agent may require. Each of the Borrowers agrees to hold any sums received by it until the end of the Security Period as a result of its having exercised any such right on trust for the Agent absolutely.
1.8.3	Each of the Borrowers agrees that it will not at any time during the Security Period claim any set off or counterclaim against any other Borrower in respect of any liability owed to it by that other Borrower under or in connection with the Finance Documents, nor prove in competition with the Lenders in any liquidation of (or analogous proceeding in respect of) any other Borrower in respect of any payment made under the Finance Documents or in respect of any sum which includes the proceeds of realisation of any security held by the Agent for the repayment of the Indebtedness.
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2.	LOAN
---	---
2.1	Amount of loan. Subject to the satisfaction of all conditions precedent and in reliance on the representations and warranties made in or in accordance with them and furthermore subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers in up to two Advances an aggregate principal amount being the lesser of (a) $22,000,000 in aggregate and (b) up to 50% leverage of the aggregate Market Value of the Ships.
---	---
2.2	Lenders' participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.
---	---
2.3	Purpose of Loan. The Borrowers undertake with each Creditor Party to use the Loan only for the purpose stated in Clause 1.1 to this Agreement.
---	---
2.4	Application of Proceeds. The Lenders shall have no responsibility for the application of the proceeds of the Loan (or any part thereof) by the Borrower.
---	---
2.5	Duration of Lenders’ commitment. The Lenders will be under no liability to advance their respective Commitments or any part of them after the date of the expiry of the Availability Period, whereas any part of the Commitment undrawn and not cancelled at close of business on the date of expiry of the Availability Period shall automatically be cancelled.
---	---
2.6	Borrowers’ right of cancellation
---	---
2.6.1	The Borrowers shall be entitled to cancel the Loan under this Agreement upon giving the Lender not less than ten (10) days’ notice in writing to that effect.
---	---
2.6.2	Any notice of cancellation once given by the Borrowers shall be irrevocable whereas any amount cancelled may not be drawn.
---	---

2.6.3	Notwithstanding any cancellation pursuant to sub-clause 2.6.1, the Borrowers shall continue to be liable for any and all amounts due to the Lenders under this Agreement, including without limitation any amounts due under Clause 24 (Increased Costs).
3.	POSITION OF THE LENDERS
---	---
3.1	Interests of Lenders several. The rights of the Lenders under this Agreement (but without prejudice to the provisions of this Agreement relating to or requiring action by the Majority Lenders) are several; accordingly each Lender shall have the right to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender and/or any other Creditor Party to be joined as an additional party in any proceedings for this purpose.
---	---
3.2	Independent action by a Lender. None of the Lenders shall enforce, exercise any rights, remedies or powers or grant any consents or releases under or pursuant to, or otherwise have a direct recourse to the security and/or guarantees constituted by any of the Finance Documents without the prior written consent of the Majority Lenders but, provided such consent has been obtained, it shall not be necessary for any other Lender to be joined as an additional party in any proceedings for this purpose.
---	---
3.3	Obligations of Lenders several. The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement to which it is a party shall not result in:
---	---
(a)	the obligations of the other Lenders being increased; nor
---	---
(b)	the Borrowers, any Security Party, any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
---	---
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
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3.4	Parties bound by certain actions of Majority Lenders. Every Lender and any other Creditor Party, the Borrowers and each Security Party shall be bound by:
---	---
(a)	any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;
---	---
(b)	any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document;
---	---
(c)	any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.
---	---
3.5	Reliance on action of Agent. The Borrowers 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.
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3.6	Construction. In Clauses 3.4 and 3.5 references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.
4.	DRAWDOWN
---	---
4.1	Request for Loan. Subject to the following conditions, the Borrowers may request an Advance to be advanced by ensuring that the Agent receives the Drawdown Notice for such Advance not later than 11.00 a.m. (Athens time) two (2) Business Days prior to the intended 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 up to and including the Latest Permissible Drawdown Date; and
---	---
(b)	the amount of the Loan shall not exceed in aggregate the lesser of (a) $22,000,000 in aggregate and (b) up to 50% leverage of the aggregate Market Value of the Ships as determined up to thirty days prior to a Drawdown Date and shall be used for the purposes set out in Clause 1.1 of this Agreement; and
---	---
(c)	the Loan shall be advanced in up to two Advances;
---	---
(d)	the Borrowers have complied with the provisions of Clause 9.1 with respect to the Loan.
---	---
4.3	Notification to Lenders of receipt of a Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the relevant Drawdown Notice and shall inform each Lender of:
---	---
(a)	the amount of the relevant Advance drawn down and the Drawdown Date;
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(b)	the amount of that Lender's participation in such Advance; and
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(c)	the duration of the first Interest Period for such Advance.
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4.4	Drawdown Notice irrevocable. The Drawdown Notice shall specify the amount of the relevant Advance and Business Day upon which same is required to be advanced as well as the proposed duration of the first Interest Period, shall give full details of the place and account to which the proceeds of such Advance are to be paid, which must both be acceptable to the Lenders and shall be signed by a director or an authorised attorney-in-fact of the Borrowers, and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.
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4.5	Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the relevant Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on the Drawdown Date under Clause 2.2.
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4.6	Disbursement of an Advance. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date of an Advance 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 to the account which the Borrowers specify in the Drawdown Notice of an Advance and in the same funds as the Agent received the payments from the Lenders.
4.7	Disbursement of an Advance to the Sellers. Notwithstanding the foregoing provisions of this Clause 4, in the event that any part of the Loan is required to be drawn down prior to the satisfaction of the conditions precedent set out in Clause 9.1 and remitted in accordance with the relevant clause of the MOA and the relevant escrow letter dated 20 September 2023 (herein called the “Escrow Letter(s)”) to Watson Farley & Williams LLP (the “Escrow Agent”), the Agent may in its absolute discretion agree to remit such amount to the Escrow Agent prior to the satisfaction of the conditions precedent set out in Clause 9.1 expressly subject to the following conditions:
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(a)	such amount is remitted pursuant to the terms and conditions of the relevant MOA and Escrow Letter to the Escrow Agent to be held by it to the order of the Agent;
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(b)	the principal amount (the “deposited amount”) of such funds will only be released to the relevant Sellers strictly in accordance with the Agent’s instructions set out in the Escrow Letter;
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(c)	the deposited amount so released may be used only for payment to the account of the relevant Sellers in satisfaction of the balance of the Purchase Price of a Ship plus extras; and
---	---
(d)	in the event that:
---	---
(i)	none of the said amount so remitted is released (whether on the expected Delivery Date or thereafter) in accordance with the Escrow Letter or any part thereof is not so released, or
---	---
(ii)	the Escrow Agent fails to remit the said amount in accordance with the Agent’s instructions,
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in case of continued failure of the Escrow Agent to comply with the Agent’s instructions, the Borrowers shall forthwith upon demand by the Agent pay to the Agent such amounts that may be certified by the Agent as being the amount required to indemnify the Agent in respect of any cost transferred to the Agent in relation to the deposited amount from the date of payment thereof to the Escrow Agent to the date of disbursement of the deposited amount to the relevant Sellers or the refund of the deposited amount to the Agent less the amount (if any) of the earned interest received by the Agent from the Escrow Agent.

(e)

Without prejudice to the obligations of the Borrowers to indemnify the Agent on demand, the Agent shall in good faith take reasonable and proper steps diligently to seek recovery of the deposited amount from the Escrow Agent (provided that prior to taking such action the Borrowers shall have agreed to indemnify the Agent for all costs and expenses which may be incurred in seeking recovery of such amount, including, without limitation, all legal fees and disbursements reasonably and properly incurred) and if the Agent shall recover any part of the deposited amount (and provided that it has previously recovered full indemnification under Clause 4.7(d)) the Agent shall, so long as no Event of Default has occurred and is continuing, pay to the Borrowers the amount so recovered after subtracting any tax suffered or incurred thereon or expenses incurred by the Lender.

(f)

The Agent shall have no liability whatsoever to the Borrowers or any other person for any loss caused by the failure of the Escrow Agent for any reason whatsoever to remit the said amount and any earned interest to the designated account or to comply fully in accordance with the Agent’s instructions.

(g)

Any amounts remitted by the Escrow Agent (to the Lender and returned pursuant to this Clause 4.7 will be applied as follows, and express authority is hereby given by the Borrowers to the Agent to make such application, in case the purchase of a Ship has been cancelled or delayed beyond the Cancelling Date as per the relevant MOA and Escrow Letter these amounts shall be applied in or towards prepayment of the outstanding indebtedness in full, and the remaining amount (if any) shall be freely available to the Borrowers,

---

provided that if any such amount so returned is not a part of the amount of the Loan but part of the Borrowers’ equity such amount shall be freely available to the Borrowers.

The provisions of Clause 8.10 shall apply to any prepayment of the Loan made under this Clause 4.7.

4.8	Satisfaction of Conditions Precedent. Notwithstanding the giving of the Drawdown Notice pursuant to Clause 4.1, the Lenders shall not be obliged to disburse any funds until all the conditions precedent set out in Clause 9.1 have been satisfied, save as provided in Clause 9.2.
4.9	Deemed Indebtedness. The relevant payment by the Agent under Clause 4.6 shall constitute the advancement of an Advance or Advances and the Borrowers shall thereupon become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.
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5.	INTEREST
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5.1	Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan or any part of the Loan in respect of each Interest Period shall be paid by the Borrowers on the last day of that Interest Period.
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5.2	Calculation of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan or any part of the Loan in respect of each Interest Period is a percentage rate per annum which is the aggregate of:
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(i)	the Applicable Margin; and
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(ii)	Reference Rate.
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5.3	Payment of accrued interest. The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (and, if an Interest Period is longer than 3 months, on the dates falling at three (3) monthly intervals after the first day of the Interest Period).
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5.4	Notification of rates of interest. The Agent shall notify the Borrowers and each Lender of:
(a)	the determination of a rate of interest under this Agreement; and
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(b)	each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
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5.5	Unavailability of Term SOFR
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(a)	Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
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(b)	Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
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(c)	Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of Loan or that part of the Loan.
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(d)	Cost of funds: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 5.7 shall apply to the Loan or that part of the Loan for that Interest Period.
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5.6	Market disruption
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5.7	Cost of funds
(a)	If this Clause 5.7 applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
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(i)	the Applicable Margin; and
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(ii)	the rate notified to the Agent (and the Borrowers) 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 its cost of funds relating to its participation in the Loan or that part of the Loan.
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(b)	If this Clause 5.7 applies and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
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(c)	Subject to Clause 24.7, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
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(d)	If paragraph (e) below does not apply and any rate notified to the Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
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(e)	If this Clause 5.7 applies pursuant to Clause 5.6 and
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(i)	a Lender's Funding Rate is less than the Market Disruption Rate; or
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(ii)	a Lender does not notify a rate by the time specified in sub-paragraph (ii) of paragraph (a) above,
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5.8	Break Costs
(a)	The Borrowers shall, within three (3) Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
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(b)	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become or may become payable.
5.9	Applicable Margin.
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(a)	The Borrowers may, at their option and subject to:
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(i)	serving a written notice to the Agent not less than 2 Business Days prior to the commencement of an Interest Period (or at any other time during an Interest Period as the Agent may agree in its absolute discretion) (the "Commencement Date"); and
---	---
(ii)	no Event of Default having occurred; and
---	---
(iii)	no Event of Default resulting from the relevant application,
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credit or procure that the Cash Collateral Account be credited with the Cash Collateral and apply the Cash Collateral or procure the application of the Cash Collateral on the Commencement Date in reducing the Margin to 1.00 per cent. (1%) per annum and such reduced Margin shall apply to an amount of the Loan equal to the Cash Collateral for a duration to be agreed between the Borrowers and the Agent but having the same duration of an Interest Period of the Loan (the "Fixing Period") which should be the same for both the Loan and the Cash Collateral on or prior to the relevant Commencement Date. The Cash Collateral (or any part thereof) may only be withdrawn or transferred at the end of any Fixing Period;

(b)	If the Borrowers, or (as the case may be), any other entity in whose name the Cash Collateral Account is opened withdraw or transfer the Cash Collateral (or any part thereof) prior to the end of a Fixing Period in accordance with paragraph (a) above or otherwise with the Agent's prior consent, the Margin for the amount of the Loan equal to the Cash Collateral which has been withdrawn or transferred will revert to the Margin which applies at that time in accordance with the terms of the Loan Agreement and the Borrowers will indemnify the Lenders on demand in respect of all breakage costs which result from such withdrawal or transfer effected prior to the end of a Fixing Period.
5.10	Sustainability pricing adjustment
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5.10.1	On the first day of each Pricing Adjustment Period, the Applicable Margin (initially of 2.10% per annum) applicable to the Loan outstanding shall be reduced by up to 0.05% (zero point zero five percent) per annum, in case (i) a Ship’s CII Rating for the previous year remains at least “C”, and shall remain at least “C” for the whole duration of such Pricing Adjustment Period, (ii) a Ship’s Reported EEOI for the same period is 9,25gCO2 per cargo ton transported/nautical mile or less and (iii) the relevant Borrower owning such Ship has at least two (2) of its directors being female (the ** “Sustainability Pricing Adjustment**”);
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5.10.2	At the expiry of a Pricing Adjustment Period the Applicable Margin to the Loan shall revert to 2.10% per annum.
5.10.3	The Sustainability Pricing Adjustment applicable to the Loan shall at no time exceed 0.05% per annum for the duration of the Security Period and shall not be reduced further during a subsequent Pricing Adjustment Period and for the avoidance of doubt, a Sustainability Pricing Adjustment can only occur once per calendar year.
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5.10.4	If an Event of Default occurs, the Sustainability Pricing Adjustment shall no longer apply and the Applicable Margin of 2.10% per annum shall apply instead.
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5.10.5	In this Clause 5.10:
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“CII” **** means Carbon Intensity Indicator, as provided in the MARPOL Carbon Intensity Regulations;

“CII Rating” **** means a Ship’s attained operational carbon intensity rating, expressed as a rating from A-E in a calendar year, as calculated in accordance with the MARPOL Carbon Intensity Regulations.

“EEOI” **** means Energy Efficiency Operational Index as per IMO MEPC.1/Circ.684, 2009;

“Reported EEOI” **** is the operational efficiency of a Ship quantified by measuring the annual average carbon intensity of such Ship per transport work which is reported annually in gCO2 per ton of cargo shipped/nautical mile travelled and it is verified by the company’s approved Classification Society or other competent authority in respect of such Ship or in case said entities are unable to provide such a verification by the Approved Manager.

“Pricing Adjustment Period” **** means, the period commencing on the first day of the Interest Period after a Sustainability Performance Certificate related to a Ship has been delivered to the Agent and ending on the first anniversary thereof provided that the last such period may last only few months as it will reach the Final Maturity Date;

“Sustainability Performance Certificate” **** means a certificate in the form set out in Schedule 6 (Form of Sustainability Performance Certificate) signed by a director of a Borrower or the Chief Executive Officer or Chief Financial Officer of the Guarantor, that shows a Ship’s CII Rating and sets forth such Ship’s CII Rating, and Reported EEOI certified by the approved classification society or other competent authority in respect of such Ship.

“Sustainability Period” **** means, in respect of a Ship, the period commencing on the 1^st^ January 2024 and ending on the 31^st^ December 2024 and each subsequent 12-month period thereafter.

5.10.6	If any confirmation, representation or statement made under or in connection with any Sustainability Performance Certificate is or proves to have been incorrect or misleading in any material respect when made, the Applicable Margin shall revert to 2.10% per annum (if necessary with retrospective effect from the applicable Pricing Adjustment Period).
6.	INTEREST PERIODS
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6.1	Selection of Interest Periods
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(a)	The Borrowers may select the Interest Period for each Advance in the relevant Drawdown Notice for each Advance. Subject to paragraphs (f) and (h) below and Clause 6.2, the Borrowers may select each subsequent Interest Period in respect of the Loan in a selection notice.
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(b)	Each selection notice is irrevocable and must be delivered to the Agent by the Borrowers not later than the Specified Time.
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(c)	If the Borrowers fail to select an Interest Period in the Drawdown Notice or fail to deliver a selection notice to the Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to Clause 6.2, be three (3) Months.
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(d)	Subject to this Clause 6, the Borrowers may select an Interest Period of three (3) or six (6) Months or such longer or shorter period as the Agent may, in its sole discretion, agree with the Borrowers.
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(e)	An Interest Period in respect of the Loan shall not extend beyond the final Repayment Date.
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(f)	In respect of a Repayment Instalment, the Borrowers may request in the relevant selection notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
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(g)	The first Interest Period for each Advance shall start on the relevant Drawdown Date and, subject to paragraph (h) below, each subsequent Interest Period shall start on the last day of its preceding Interest Period.
(h)	Except for the purposes of paragraph (f) above and Clause 6.2, the Loan shall have one Interest Period only at any time.
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6.2	Changes to Interest Periods
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(a)	In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Agent may establish an Interest Period that is shorter than the Interest Period selected in the relevant selection notice for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant selection notice, subject to paragraph 6.1.(d) of Clause 6.1.
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(b)	If the Agent makes any change to an Interest Period referred to in this Clause 6.2, it shall promptly notify the Borrowers and the Lenders.
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6.3	Non-Business Days
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7.	DEFAULT INTEREST
(a)	If a Borrower or a Security Party fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the relevant due date for payment thereunder, that is: (i) the date on which such Finance Documents provide that such amount is due for payment; or (ii) if a Finance Document provides that such amount is payable on demand, three (3) days following the date on which the demand is served; or (iii) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable, up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two point five per cent. (2.5%) per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this Clause 5.3 shall be immediately payable by the Borrowers and the Security Parties on demand by the Agent.
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(b)	If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
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(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and

(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two and a half per cent (2.5%) per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

(c)	Default Interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.	REPAYMENT AND PREPAYMENT
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8.1	Amount of repayment instalments. The Borrowers shall repay the maximum amount of each Advance by twenty four (24) consecutive equal quarterly instalments, each being in the amount of two hundred fifty thousand Dollars ($250,000), followed by a balloon payment of five million Dollars ($5,000,000) (the “Balloon Instalment”).
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8.2	Repayment Dates. The first instalment of an Advance shall be repaid on the date falling three (3) months after the Drawdown Date in respect of the relevant Advance and each subsequent instalment shall be repaid at three monthly intervals thereafter and the Balloon Instalment shall be repaid concurrently with the twenty fourth (24^th^) and final repayment instalment, which shall be repaid on the final Repayment Date for that Advance,
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Provided always that if the amount of an Advance drawn down hereunder is less than $11,000,000 then the amount of the repayment instalments and of the Balloon Instalment shall be reduced on a pro rata basis.

8.3	Final Repayment Date. On the final Repayment Date of the second Advance, being the date falling on the Final Maturity Date, the Borrowers shall additionally pay to the Lenders 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 part of the Loan on the last day of an Interest Period.
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8.5	Conditions for voluntary prepayment. The conditions referred to in Clause 8.4 are that:
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(a)	a partial prepayment shall be in the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000) or a multiple thereof;
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(b)	the Agent has received from the Borrowers at least ten (10) Business Days prior written confirmative and irrevocable notice specifying the amount to be prepaid in connection with the Loan and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period); and
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(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.
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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 authority of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers 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 and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c).
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8.8	Mandatory prepayment. The Borrowers shall be obliged to prepay the Required Amount in full if a Ship is sold (which sale shall be subject to the prior written consent of the Lenders), refinanced by another bank or financial institution or becomes a Total Loss:
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(a)	in the case of a sale of a Ship with the prior written consent of the Lenders and provided that no Event of Default has occurred and is continuing (whether for further trading or scrapping), on the earlier of (i) the date on which the sale is completed by delivery of that Ship to the buyer and (ii) the date of receipt by the relevant Borrower of the sale proceeds; or
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(b)	in the case of a refinancing of a Ship, on or before the date on which such refinancing takes place; or
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(c)	in the case of a Total Loss of a Ship, on the earlier of (i) the date falling one hundred eighty (180) days after the Total Loss Date and (ii) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.
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For the purposes of this Clause 8.8:

“Required Amount” means, in relation to a sale, Total Loss or refinancing of a Ship, an amount which is equal to the higher of: (i) such amount as shall be necessary to maintain compliance with the provisions of Clause 15.1 following such sale, refinancing or loss (as the case may be) of the relevant Ship and (ii) such amount as shall be necessary in order for the ratio of the Market Value of the remaining Ship against the remaining indebtedness under the Loan to be at the same level as the ratio existing prior to such sale, refinancing or loss of such Ship. Any such amount will be applied against reduction of the outstanding repayment instalments and the Balloon Instalment, on a pro rata basis.

Provided always that:

(i)	in the event that the amount of the sale proceeds, Total Loss proceeds or refinancing proceeds (as the case may be) received by the Agent are not sufficient to cover the Required Amount, then the Borrowers shall additionally pay to the Agent the balance of the Required Amount in full; and

(ii)	in case the remaining Ship is sold, lost or refinanced (as the case may be), then the full amount of the sale proceeds, Total Loss proceeds or refinancing proceeds (as the case may be) shall be applied against repayment in full of all amounts outstanding under this Agreement and the other Finance Documents and, should this result in a shortfall, then the Borrowers shall pay to the Agent the amount of any such shortfall in full.
8.9	Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 below or otherwise) in respect of the Loan and, together with any sums payable under Clause 21.2) but, subject to Clause 5.8, without premium or penalty.
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8.10	Application of partial prepayment. Each voluntary partial prepayment shall be applied at the Borrowers’ option against the repayment instalments of the Loan specified in Clause 8.1 and the Balloon Instalment.
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8.11	No reborrowing. No amount prepaid or repaid may be re-borrowed.
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9.	CONDITIONS PRECEDENT – CONDITIONS SUBSEQUENT
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9.1	Documents, fees and no default. Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:
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(a)	that, on or before the date of signing of this Agreement, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
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(b)	that, on or before the date of drawdown of the Loan, the Lender receives the documents described in Part B in Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
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(c)	that, on or before the service of a Drawdown Notice, the Agent receives the fees payable pursuant to Clause 20.1 (a) and has received payment of the expenses referred to in Clause 20.2;
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(d)	that at the date of each Drawdown Notice, at each Drawdown Date and on the first day of each Interest Period and on the date of each Compliance Certificate:
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(i)	no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;
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(ii)	the representations and warranties in Clause 10 and those of the Borrowers or any Security Party which are set out in the other Finance Documents would be true and not misleading in any material respect if repeated on each of those dates with reference to the circumstances then existing;
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(iii)	none of the circumstances contemplated by Clause 5.5 has occurred and is continuing;
(iv)	there has not been a Material Adverse Change in the financial position or state of affairs of the Borrowers and/or the Group from that disclosed to the Agent prior to the date of this Agreement;
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(e)	that, if the ratio set out in Clause 15.1 were applied immediately following the advancement of the Loan, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
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(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 (acting reasonably) may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to a Drawdown Date.
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9.2	Waiver of conditions precedent. ****
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If the Majority Lenders, at their discretion, permit an Advance to be advanced 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 authority of the Majority Lenders, specify).

9.3	Conditions Subsequent.

The Borrowers undertake to deliver or cause to be delivered to the Agent within thirty (30) days after a Delivery Date or at any later date agreed by the Agent the documents and other evidence listed in Schedule 3, Part C (Conditions Subsequent).

10.	REPRESENTATIONS AND WARRANTIES
10.1	General. The Borrowers represent and warrant to each Creditor Party as follows:
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10.2	Status. Each Borrower is duly formed and validly existing and in good standing under the laws of the Marshall Islands and in compliance with the Republic of the Marshall Islands Economic Substance Regulation 2018 in accordance with its terms and time frame once the same becomes applicable and none of the Borrowers nor any Security Party is a FATCA FFI or a US Tax Obligor.
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10.3	Partnership interests and ownership. The legal title and beneficial ownership of each Borrower’s partnership interests is held, free of any Security Interest or other claim by the following entities as per the following percentages:
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	Partnership Interest
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General Partner
Ultra General Partner Ltd	1%
Limited Partners
Ultra Limited Partner Ltd	60%
Eurodry Eco Ultra AS	35.115%
Jianzhong Dong	1%
Alastair Douglas James Locke	2.885%

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 it is a party; and
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(b)	to borrow under this Agreement and to make all the payments contemplated by, and to comply with, the Finance Documents to which that Borrower is a Party.
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(c)	to authorise the registration of its Ship under the Approved Flag.
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10.5	Consents in force. All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
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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):
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(a)	constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and
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(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.
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10.7	No third party Security Interests. Without limiting the generality of 10.6, at the time of the execution and delivery of each Finance Document:
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(a)	the Borrowers will have the right to create all the Security Interests which that Finance Document purports to create; and
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(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.
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10.8	No conflicts. The execution by the Borrowers of each Finance Document to which it is a party, and the borrowing by the Borrowers of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:
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(a)	any law or regulation in any Relevant Jurisdiction; or
(b)	the constitutional documents of the Borrowers; or
---	---
(c)	any contractual or other obligation or restriction which is binding on the Borrowers or any of their assets, and will not have a Material Adverse Effect.
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10.9	No withholding taxes. All payments which the Borrowers are 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 Relevant Jurisdiction.
---	---
10.10	No default. No Event of Default or Potential Event of Default has occurred and is continuing.
---	---
10.11	Information. 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 11.6; all audited and consolidated accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no Material Adverse Change in the financial position or state of affairs of the Borrowers from that disclosed in the latest of those accounts which constitutes a Material Adverse Effect.
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10.12	No litigation. No legal or administrative action involving the Borrowers 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 the Borrowers’ knowledge, is likely to be commenced or taken which, in either case and if determined adversely, would be likely to have a Material Adverse Effect.
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10.13	Compliance with certain undertakings. At the date of this Agreement, the Borrowers are in compliance with Clauses 11.2, 11.5, 11.9, 11.12 and 11.19.
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10.14	Taxes paid. The Borrowers have paid all taxes applicable to, or imposed on or in relation to it and its business.
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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. Without prejudice to the generality of Clause 2.2, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower is a party, the Borrowers confirm that (i) they are acting for their own account, (ii) that they will use the proceeds of the Loan for their own benefit, under their 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 requirements or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).
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10.17	Patriot Act. To the extent applicable to any of the Borrowers, each Borrower is in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the PATRIOT Act. No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
10.18	Social law matters. Each Borrower is in compliance in all material respects with any employment law or relevant regulation applicable to it.
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10.19	Compliance with processing of personal data. Each Borrower is in compliance in all material respects with any law or regulation applicable to it pertaining to the protection of persons from the processing of personal data and no claim, notice or other communication has been received by that Borrower and/or the Guarantor in respect of any actual breach of, or liability under, any such law or regulation which, has or would be reasonably likely to have a Material Adverse Effect on that Borrower.
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10.20	DAC 6. No transaction contemplated by the Finance Documents nor any transaction to be carried out in connection with any transaction contemplated by the Finance Documents meet any hallmark set out in Annex IV of the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU, if applicable.
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10.21	The Ships. Each Ship will upon her delivery to the relevant Borrower and at any time thereafter be:
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(a)	in the absolute and unencumbered (other than in favour of the Lenders or any other Creditor Party) ownership of the relevant Borrower who will on and after that Ship’s delivery be the sole, legal and beneficial owner of that Ship;
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(b)	registered in the name of the relevant Borrower under the laws and flag of the Flag State;
---	---
(c)	operationally seaworthy and in every way fit for service, provided that the relevant Borrower will not be in violation of this sub-clause 10.21 (c) in cases of (i) small off hire incidents occurring during the normal course of trading of such Ship or (ii) in cases of normal maintenance/repairs or (iii) in cases of damage to such Ship by causes for which it is insured under the relevant Ship’s Insurances and all necessary steps have been taken to repair such damage to the satisfaction of any requirements set by that Ship’s Classification;
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(d)	classed with the relevant Classification free of all qualifications and overdue recommendations of the relevant Classification Society affecting class;
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10.22	Ship’s employment. None of the Ships is subject to any Charter and will not be subject to any other charter or contract of employment or to any other agreement to enter into any charter or contract which, if entered into after the date of the relevant Mortgage/General Assignment would have required the consent of any Creditor Party and on the date of each Ship’s delivery to the relevant Borrower and any time thereafter there will not be any agreement or arrangement whereby the Earnings (as defined in the relevant Mortgage/General Assignment) of that Ship may be shared with any other person.
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10.23	No Security Interests. Neither the Ships, nor the Earnings, Insurances or Requisition Compensation of the Ships (each as defined in the relevant Mortgage/General Assignment) nor the Accounts or any of them nor any other properties or rights which are, or are to be, the subject of any of the Finance Documents will be, on the date a Ship will be delivered to the relevant Borrower subject to any Security Interest other than Permitted Security Interests.
10.24	No immunity. Neither the Borrowers nor any of their respective assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement).
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10.25	Valid choice of Law. The choice of law agreed to govern this Agreement and/or any other Finance Document and the submission to the jurisdiction of the courts agreed in each of the finance documents are or will be, on execution of the respective finance documents, valid and binding on the Borrowers and any other security party which is or is to be a party thereto.
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10.26	Environmental matters
---	---
(a)	no Environmental Law applicable to the Ships and/or the Borrowers and/or the Approved Manager has been violated in a material way;
---	---
(b)	all consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force;
---	---
(c)	no Environmental Claim has been made or, to the best of the Borrowers’ knowledge and belief, is threatened or pending against any of the Borrowers or any other Security Party or the Ships and there has been no Environmental Incident which has given, or might give, rise to such a claim.
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10.27	Sanctions. Neither the Borrowers and/or the Guarantor nor any other Security Party (a) is a Restricted Party, (b) is controlled directly or indirectly by a Restricted Party, (c) controls a Restricted Party or (d) has a Restricted Party serving as director or officer.
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10.28	P ari passu and subordinated indebtedness. The obligations of the Borrowers under this Agreement are direct, general and unconditional obligations of the Borrowers, and rank at least pari passu with all other present and future unsecured and unsubordinated Financial Indebtedness of the Borrowers, with the exception of any obligations which are mandatorily preferred by operation of law and not by contract, and any Financial Indebtedness of the Borrowers owing to any of its respective limited partners is subordinated in all respects to the Borrowers’ obligations under this Agreement.
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10.29	No filings or actions required. **** Save for the registration of the Mortgage under the laws of the Approved Flag State through the competent registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of Finance Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to any of the Finance Documents and each of the Finance Documents is in proper form for its enforcement in the courts of the Relevant Jurisdiction in accordance with its terms.
10.30	Solvency.
---	---
(a)	neither the Borrowers nor any other Security Party is unable, or admit or have admitted their inability, to pay its debts or has suspended making payments on any of its debts;
---	---
(b)	neither the Borrowers nor any other Security Party by reason of actual or anticipated financial difficulties has commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Financial Indebtedness;
---	---
(c)	the value of the assets of the Borrowers and the other Security Parties is not less than their respective liabilities (taking into account contingent and prospective liabilities); and
---	---
(d)	no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Financial Indebtedness of the Borrowers or any other Security Party.
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10.31	Valuations. The Borrowers represent and warrant that:
---	---
(a)	all information supplied by it or on their behalf to an independent shipbroker selected by or acceptable to the Agent for the purposes of a valuation delivered to the Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given;
---	---
(b)	it has not omitted to supply any information to an independent shipbroker selected by or acceptable to the Agent which, if disclosed, would adversely affect any valuation prepared by such an independent shipbroker; and;
---	---
(c)	there has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
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10.32	Validity and Completeness of the MOA and Escrow Letter. The Borrowers warrant that the copies of each MOA and each Escrow Letter delivered to the Agent before the date of this Agreement are true and complete copies thereof which constitute valid, binding and enforceable obligations of the parties thereto in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally; and no amendments or additions to it have been agreed (other than those notified to the Lender prior to the date of this Agreement) nor has any of the parties thereto waived any of their respective rights thereunder.
10.33	Repetition of Representations and Warranties. The representations and warranties in this Clause 10. shall be deemed to be repeated by the Borrowers (a) on the date of service of the Drawdown Notice, (b) on the Drawdown Date and (c) on the first day of each Interest Period as if made with reference to the facts and circumstances existing on each such day.
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11.	GENERAL UNDERTAKINGS
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11.1	General. The Borrowers undertake 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 authority of the Majority Lenders, otherwise permit.
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11.2	Title; negative pledge; pari passu. The Borrowers will:
---	---
(a)	ensure that a Ship upon her delivery to the relevant Borrower will maintain its ownership, management, control and ultimate beneficial ownership and the relevant Borrower will hold the legal title to, and own the entire beneficial interest in the relevant Ship’s 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 except for Permitted Security Interests. For the avoidance of doubt the Lenders consent and agree to any changes relating to the shareholders of the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement;
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(b)	not create or permit to arise any Security Interest (except for Permitted Security Interests) over any of its asset, present or future; and
(c)	procure that its liabilities under the Finance Documents to which it is a party to will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
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11.3	No disposal of assets. The Borrowers will not (without the prior written consent of the Agent, acting with authority from the Majority Lenders) transfer, lease or otherwise dispose of:
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(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 them or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.
---	---
11.4	No other liabilities or obligations to be incurred. The Borrowers will not incur any liability or obligation except (i) liabilities and obligations under the Finance Documents to which they are a party and (ii) liabilities or obligations incurred in the ordinary course of their business of operating and chartering the Ships.
---	---
11.5	Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrowers under or in connection with any Finance Document to which they are a party will be true and not misleading in any material respect and will not omit any material fact or consideration.
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11.6	Provision of financial statements. The Borrowers will:
---	---
(a)	procure that the Guarantor furnishes the Agent, with annual, audited and consolidated financial statements of the Guarantor within 180 days after the end of the financial year concerned, and prepared in accordance with GAAP principles and practices consistently applied, such obligation commencing from the 31^st^ December 2023;
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(b)	send to the Agent, together with the Accounting Information referred to in paragraph (a) above, a Compliance Certificate;
---	---
(c)	provide the Agent from time to time as the Agent may reasonably request and in form and substance satisfactory to the Agent with any information on the financial condition, commitments, business and operations of the Borrowers and any other Security Party;
---	---
(d)	keep the Agent advised with respect to all major financial developments of the Borrowers and the Guarantor, including (but not limited to) sales or purchases of vessels, new loans, refinancing and/or restructuring of existing loans and contracts for term employment of vessels, as the Agent may from time to time reasonably request.
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11.7	Form of financial statements. All financial statements delivered under Clause 11.6 will:
(a)	give a true and fair view of the state of affairs of the Guarantor, or as the case may be, of the Borrowers at the date of those accounts and of the profit for the period to which those accounts relate; and
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(b)	fully disclose or provide for all significant liabilities of the Guarantor, or as the case may be, of the Borrowers for the period to which those accounts relate,
---	---

to the Agent’s satisfaction.

11.8	Consents. The Borrowers will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
(a)	for the Borrowers and any Security Party to perform their respective obligations under each of the Finance Documents to which each of them is a party;
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(b)	for the validity or enforceability of any Finance Document to which each of the Borrowers and any Security Party is party,
---	---

and the Borrowers will comply (and will ensure that each Security Party will comply) with the terms of all such consents.

11.9	Maintenance of Security Interests. The Borrowers will:
(a)	at its own cost, do 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) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the reasonable 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.
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11.10	Notification of litigation. The Borrowers will provide the Agent with details of any legal or administrative action involving a Borrower, the Approved Manager and any other Security Party or a Ship, her Earnings or her Insurances as soon as such action is instituted or it becomes apparent to the Borrowers that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered as having a Material Adverse Effect on the business, assets or financial condition of them or as affecting the validity or enforceability of any Finance Document.
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11.11	Principal place of business. The Borrowers will not establish, or do anything as a result of which it would be deemed to have, a place of business in the United Kingdom or the United States of America.
11.12	Confirmation of no default. The Borrowers will, not more than once per quarter and within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by at least one (1) director of each of the Borrowers and which:
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(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.
---	---
11.13	Notification of default. The Borrowers will notify the Agent as soon as the Borrowers become aware of:
---	---
(a)	the occurrence of an Event of Default or a Potential Event of Default which is continuing; or
---	---
(b)	any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
---	---

and will thereafter keep the Agent fully up‑to‑date with all developments.

11.14	Provision of further information. The Borrowers will inform the Agent of all major financial developments in the Group such as new loans, refinancing/restructuring of existing loans, new acquisitions and sales, contracts for term employment of the Ships and furthermore will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:
(a)	the Borrowers, the Ships, their Insurances or their Earnings; or
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(b)	any other matter relevant to, or to any provision of, a Finance Document,
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which may be requested by any Creditor Party at any time.

11.15

Provision of customer information. The Borrowers will produce such documents and evidence regarding the Borrowers themselves and each Security Party as the Lenders shall from time to time require, based on applicable laws and regulations from time to time and the Lenders’ own internal guidelines from time to time, relating to the Lenders’ knowledge of its customers (“KYC”).

11.16

Ownership. The Borrowers or, as the case may be, any other corporate Security Party shall ensure that, throughout the Security Period without the prior written consent of the Agent, which shall not be unreasonably withheld, there shall be no change in the Directors and Officers of the Borrowers and in the Chairman of the Guarantor and moreover the Borrowers shall ensure that no change shall be made directly or indirectly in the ownership of the Borrowers (including, but not limited to, the percentage of the limited partnership interests held by Jianzhong Dong and Alastair Douglas James Locke in the Borrowers), Ultra General Partner Ltd, Ultra Limited Partner Ltd, Eurodry Eco Ultra AS, the beneficial ownership of the Guarantor, or the control of the Borrowers and/or the Guarantor and/or Ultra General Partner Ltd and/or Ultra Limited Partner Ltd and/or Eurodry Eco Ultra AS, as disclosed to the Agent prior to the date of this Agreement, without the prior written consent of the Agent, which shall not be unreasonably withheld. For the avoidance of doubt the Lenders consent and agree to any changes relating to the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement.

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11.17	Sanctions ****
(a)	Each of the Borrowers and/or the Guarantor undertakes to comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply) in all respects with all Sanctions, including employing the Ships and not allowing their employment in manner contrary to any Sanctions.
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(b)	Each of the Borrowers and/or the Guarantor undertakes not to use (and shall procure that no other Security Party shall use) any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Creditor Parties.
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(c)	Each of the Borrowers and/or the Guarantor undertakes to ensure (and shall procure that each other Security Party shall ensure) that no proceeds to the best of its knowledge (after reasonable enquiry) from any activity or dealing with a Restricted Party are credited to any bank account held with any Creditor Party in its name.
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(d)	Each of the Borrowers and/or the Guarantor undertakes (and shall procure that each other Security Party shall), to the extent permitted by law, promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.
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11.18	Treasury Services. The Borrowers shall not enter into any treasury related contract with a bank or financial institution, without the prior consent of the Agent. For the avoidance of doubt this clause will not prohibit the Borrowers from obtaining advisory and/or information services from other banks or financial institutions.
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11.19	Use of proceeds. The Borrowers shall not (and shall procure that no other Security Party and no Affiliate of any of them shall) permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Party; or (ii) in any other manner that could result in the Borrowers or any other Security Party or any Creditor Party being in breach of any Sanctions or becoming a Restricted Party.
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11.20	Anti-Corruption. ****
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(a)	The Borrowers shall not (and shall procure that no other Security Party r will) directly or indirectly use the proceeds of the Loan for any purpose which would breach or might breach applicable anti-corruption laws, including but not limited to the UK Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977, each as amended.
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(b)	The Borrowers shall (and shall procure that each other Security Party will):
(i)	conduct its business in compliance with applicable anti-corruption laws and regulations; and
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(ii)	maintain effective policies and procedures designed to promote and achieve compliance with such laws and regulations.
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11.21	Social law matters. The Borrowers shall (and shall procure that each other Security Party shall) comply in all respects with with any employment law or relevant regulation applicable to it.
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11.22	Compliance with other laws. The Borrowers shall (and shall procure that each other Security Party shall) comply in all respects with all laws and regulations to which it may be subject including without limitation (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order thereto) and (ii) the PATRIOT Act.
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11.23	Compliance with processing of personal data. The Borrowers shall (and shall procure that each Security Party shall) comply in all respects with all laws and regulations to which they may be subject pertaining to the protection of persons from the processing of personal data where failure to do so is reasonably likely to have a Material Adverse Effect, and shall use its best endeavours to avoid being subject to any claim, notice or other communication in respect of any actual breach of, or liability under, any such law or regulation where any such breach or liability has or is reasonably likely to have a Material Adverse Effect; Provided that upon becoming aware of any such claim, notice or other communication, the Borrowers shall promptly inform the Agent in writing of (i) any such claim against the Borrowers and/or the Guarantor, whether current, pending or threatened, and/or of (ii) any communication or notice and/or (iii) the imposition of any fine against the Borrowers and/or the Guarantor in respect of any actual or alleged breach of, or liability under, any such law or regulation.
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11.24	Marshall Islands Economic Substance Regulations 2018. The Borrowers shall (and shall procure that each other Security Party incorporated or formed in the Republic of the Marshall Islands shall) comply in all respects with the Republic of the Marshall Islands Economic Substance Regulations 2018 (including submission to the Agent of documentary evidence of such compliance) always in accordance with its terms and time frame once the same becomes applicable.
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11.25	DAC6. The Borrowers, if applicable, shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
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(a)	promptly upon the making of such analysis or the obtaining of such advice, any analysis made or advice obtained on whether any transaction contemplated by the Finance Documents or any transaction carried out (or to be carried out) in connection with any transaction contemplated by the Finance Documents contains a hallmark as set out in Annex IV of DAC6; and
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(b)

promptly upon the making of such reporting and to the extent permitted by applicable law and regulation, any reporting made to any governmental or taxation authority by or on behalf of any member of the Group or by any adviser to such member of the Group in relation to DAC6 or any law or regulation which implements DAC6 and any unique identification number issued by any governmental or taxation authority to which any such report has been made (if available).

11.26

ANNEX VI. The Borrowers shall, upon the request of any Lender and at the cost of the Borrowers, on or before 31st July in each calendar year, supply or procure the supply to the Agent, of all ship fuel oil consumption data required to be collected and reported by the Borrowers in accordance with Regulation 22A of Annex VI and any Statement of Compliance, together with a Carbon Intensity and Climate Alignment Certificate (if the same becomes mandatory), in each case relating to a Ship for the preceding calendar year and in accordance with the terms and time frame relevant applicable regulations of Annex VI may from time to time come in force and effect; and

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For the purposes of this Clause 11.26:

"Carbon Intensity and Climate Alignment Certificate" means a certificate from a Recognised Organisation relating to a Ship and a calendar year setting out:

(a)	the average efficiency ratio of a Ship for all voyages performed by it over that calendar year using ship fuel oil consumption data required to be collected and reported in accordance with regulation 22A of Annex VI in respect of that calendar year; and
(b)	the climate alignment of a Ship for such calendar year,
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"Recognised Organisation" means, in respect of a Ship, such Ship’s flag state or an organisation which is likely to be RINA representing such Ship’s flag state and duly authorised to determine whether the relevant Borrower has complied with regulation 22A of Annex VI.

"Statement of Compliance" means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

11.27	Provision of Sustainability Performance Certificate. The Borrowers or the Guarantor shall provide the Agent with a Sustainability Performance Certificate for each Ship within ninety (90) days of the end of each Sustainability Period for such Ship.

11.28	Provision of copies and translation of documents. The Borrowers will supply the Agent with a sufficient number of copies of the documents referred to above to provide one (1) copy for each Creditor Party.
12.	CORPORATE UNDERTAKINGS
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12.1	General. The Borrowers also undertake 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 authority of the Majority Lenders, otherwise permit.
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12.2	Maintenance of status. Each Borrower will maintain its separate limited partnership existence and remain in good standing under the laws of its formation.
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12.3	Negative undertakings. Each Borrower will not:
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(a)	carry on any type of business other than the ownership, chartering and operation of its Ship in accordance with its constitutional documents;
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(b)	make any form of distribution (other than allocation of a distribution pursuant to Clause 12.4) or effect any form of redemption, purchase, reduction or return of limited partnership interests and/or share capital or issue, allot or grant any person a right to any limited partnership interests and/or shares in its capital; or
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(c)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld, incur any debt or provide any form of credit or financial assistance (unless fully subordinated to the Loan and on terms otherwise acceptable to the Lenders) issue any guarantee to any person, (other than otherwise permitted in this Agreement), or enter into any transaction with or involving such a person, unless in the ordinary course of its normal shipping business; or
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(d)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), open or maintain any account with any bank or financial institution except accounts with the Account Bank or for the purposes of the Finance Documents and accounts notified to the Agent prior to the date of this Agreement; or
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(e)	acquire any limited partnership interests and/or 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; or
(f)	enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation, or change its name; or
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(g)	purchase any further assets (other than the Ship owned by such Borrower), either directly or indirectly (through subsidiaries); or
---	---
(h)	without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), which consent and instructions will not be unreasonably be withheld, incur any other Financial Indebtedness. Any shareholder loans, inter company/partnership loans, partnership interest owners’ loans, affiliate loans and third party loans to the Borrowers shall be fully subordinated to the rights of the Creditor Parties under the Loan Agreement and the Finance Documents, on terms satisfactory to the Agent in its sole discretion.
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12.4	Distributions. The Borrowers may allocate distributions as long as no Event of Default has occurred which is continuing and such allocation would not result to an Event of Default.
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12.5	Liquidity. The Borrowers and the Guarantor will ensure that from the date of this Agreement the Borrowers or the Guarantor or any other entity acceptable to the Agent maintain during the Security Period with the Agent or the Account Bank or the Lenders/Lender(s)’ banking group the Minimum Liquidity.
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12.6	Debt to equity ratio. The Borrowers will ensure that the Guarantor’s total debt net of cash will not exceed 75% of the total market value of its assets.
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12.7	Minimum Net Worth. The Borrowers will ensure that the Guarantor’s minimum Net Worth listed in Nasdaq will be at least fifteen million Dollars ($15,000,000).
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12.8	Compliance Check. On each Compliance Date, compliance with the undertakings contained in Clause 15.1 shall be determined by reference to the Accounting Information for the twelve month period in each Financial Year of the Borrowers (commencing with the twelve month period commencing from 31 December 2023) delivered to the Agent pursuant to the Agreement. At the same time as they deliver that Accounting Information, the Borrowers shall deliver to the Agent a Compliance Certificate signed by a director of the Borrowers. If, prior to the delivery of a Compliance Certificate, the Borrowers become aware that such undertakings will not be complied with, the Borrowers shall immediately notify the Agent thereof.
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12.9	Application of FATCA The Borrowers shall not become (and shall procure that no Security Party shall become) a FATCA FFI or a US Tax Obligor, without the prior written consent of the Lenders.
12.10	Republic of the Marshall Islands Economic Substance Regulations 2018. The Borrowers will ensure that each of the Security Parties incorporated or formed in the Republic of the Marshall Islands shall comply in all respects and remain in compliance with the Republic of the Marshall Islands Economic Substance Regulations 2018 in accordance with its terms and time frame once the same becomes applicable.
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13.	INSURANCE
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13.1	General. The Borrowers undertake with each Creditor Party to comply (and to the extent applicable to procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will comply) with the following provisions of this Clause 13 at all times during the Security Period, except as the Agent may (with the authority of the Majority Lenders), otherwise permit.
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13.2	Maintenance of obligatory insurances. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) keep the Ships insured at their or at the relevant Security Party’s expense against:
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(a)	fire and usual marine risks (including hull and machinery and excess risks);
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(b)	war risks (including war protection and indemnity liabilities, terrorism, piracy and confiscation); and
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(c)	protection and indemnity risks (including cover for oil pollution liability risks); and
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(d)	any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for the Borrowers and/or the relevant Security Party to insure and which are specified by the Security Trustee by notice to the Borrowers.
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13.3	Terms of obligatory insurances. The Borrowers shall (and to the extent applicable shall procure in all cases that each Security Party other entity if named as co-assured in the insurance policies will) effect such insurances:
(a)	in Dollars;
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(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) 120% of the amount of the Loan (ii) the aggregate Market Value of the Ships;
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(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 (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);
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(d)	in relation to protection and indemnity risks in respect of the full value and tonnage of the Ships;
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(e)	on approved terms; and
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(f)	through approved brokers and with approved insurance companies and/or underwriters and/or war risks associations, and protection and indemnity risks shall be placed with a member of the International Group of P&I Clubs.
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13.4	Further protections for the Creditor Parties. In addition to the terms set out in Clause 13.3, the Borrowers will:
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(a)	procure that the obligatory insurances shall be in the name of the respective Borrower and/or any other entity named as co-assured in the insurance policies of each Ship or whenever the Security Trustee so 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;
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(b)	procure that the insurers shall note the Security Trustee’s interest and endorse the relevant notices of assignment and loss payable clause on the relevant certificates of entry or policies and shall furnish the Security Trustee with a copy of such certificates of entry or policies;
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(c)	use its best endeavours to 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;
(d)	provide that following an Event of Default which is continuing the Security Trustee may make proof of loss if the Borrowers fail to do so.
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13.5	Renewal of obligatory insurances. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will):
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(a)	at least 21 days before the expiry of any obligatory insurance:
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(i)	notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Borrowers propose to renew that insurance and of the proposed terms of renewal; and
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(ii)	in case of any material change in insurance cover, obtain the Majority Lenders' approval to the matters referred to in paragraph (i) above;
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(b)	at least 14 days before the expiry of any obligatory insurance, renew the insurance; and
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(c)	procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall before the expiry of the current insurances notify the Security Trustee in writing of the terms and conditions of the renewal.
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13.6	Copies of policies; letters of undertaking. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:
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(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;
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(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;
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(c)	they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
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(d)	they will notify the Security Trustee, not less than 7 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrowers or their 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
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(e)	if the insurances form part of a fleet cover, they will not set off any claims on the Ships against premiums due for other vessels under the fleet cover not mortgaged to the Agent or against premiums due for other insurances; neither will they cancel the insurance cover of the Ships for reason of non-payment of such premiums; and they will arrange for a separate policy to be issued in respect of the Ships forthwith upon being so requested by the Security Trustee.
13.7	Copies of certificates of entry. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that, from any protection and indemnity and/or war risks associations in which a Ship is entered, the Security Trustee is provided with:
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(a)	a certified copy of the certificate of entry for that Ship;
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(b)	a letter or letters of undertaking in such form 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.
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13.8	Deposit of original policies. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
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13.9	Payment of premiums. The Borrowers shall (and to the extent applicable shall procure in all cases that each other Security Party if named as co-assured in the insurance policies will) 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.
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13.10	Guarantees. The Borrowers shall (and to the extent applicable shall procure that each other Security Party or other entity if named as co-assured in the insurance policies will) ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
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13.11	Restrictions on employment. The Borrowers shall not employ the Ships, nor permit same to be employed, outside the cover provided by any obligatory insurances.
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13.12	Compliance with terms of insurances. The Borrowers shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) do or omit to 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 thereunder repayable in whole or in part; and, in particular:
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(a)	the Borrowers shall (and shall procure in all cases that each other Security Party or other entity if named as co-assured in the insurance policies will) 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 13.7(c) above) 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 Borrowers shall not (and shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) make any changes relating to the classification or classification society or manager or operator of the Ships approved by the underwriters of the obligatory insurances; and
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(c)	the Borrowers shall not (and shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) employ any, 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.
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13.13	Alteration to terms of insurances. The Borrowers shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) make or agree to any material alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee (not to be unreasonably withheld).
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13.14	Settlement of claims. The Borrowers shall not (and to the extent applicable shall procure in all cases that no other Security Party or other entity if named as co-assured in the insurance policies will) settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty without the prior written consent of the Security Trustee (which consent will not be unreasonably withheld),, 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 in accordance with the Finance Documents.
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13.15	Provision of copies of communications. A Borrower shall (and to the extent applicable shall procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will), if required by the Security Trustee, provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Borrower and:
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(a)	the approved brokers; and
(b)	the approved protection and indemnity and/or war risks associations; and
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(c)	the approved insurance companies and/or underwriters, which relate directly or indirectly to:
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(i)	such Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
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(ii)	any credit arrangements made between such Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
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13.16	Provision of information. In addition, a Borrower shall (and to the extent applicable shall procure in all cases that any other Security Party or other entity if named as co-assured in the insurance policies will) promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
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(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
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(b)	effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 below or dealing with or considering any matters relating to any such insurances,
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and that Borrower and/or (as the case may be) any other Security Party or other entity, in all cases if named as co-assured in the insurance policies 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) above (it being understood however that prior to the occurrence of an Event of Default which is continuing that Borrower will only bear the costs of such insurance reports once per year).

13.17

Mortgagees’ interest. The Agent shall be entitled from time to time to effect, maintain and renew a mortgagees’ interest insurance in an amount equal to 110% of the Loan and otherwise on such terms, through such insurers and generally in such manner as the Lenders may from time to time consider appropriate and the Borrowers shall upon demand against appropriate vouchers/invoices fully indemnify the Lenders 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	Review of insurance requirements. The Majority Lenders shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the reasonable opinion of the Majority Lenders, significant and capable of affecting the Borrowers and/or to the extent applicable any other Security Party or other entity in all cases if named as co-assured in the insurance policies or the Ships and their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrowers and/or (as the case may be) any other Security Party or other entity in all cases if named as co-assured in the insurance policies may be subject), and, prior to the occurrence of an Event of Default which is continuing, may appoint insurance consultants in relation to this review at the cost of the Borrowers and/or any other Security Party or other entity in all cases if named as co-assured in the insurance policies, subject to such appointment taking place once per year.
13.19	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 Majority Lenders (acting reasonably) consider appropriate in the circumstances.
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13.20	Compliance with instructions. The Security Trustee shall be entitled but will not be bound to (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to effect the insurances of the Ships in the amount and in terms acceptable to the Security Trustee from time to time at the cost and on behalf of the Borrowers and/ to the extent applicable or any other Security Party or other entity in all cases if named as co-assured in the insurance policies.
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14.	SHIP’S COVENANTS
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14.1	General. The Borrowers also undertake 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 authority of the Majority Lenders) may otherwise permit.
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14.2	Ship's name and registration. Each Borrower shall keep its Ship registered in its name under the Approved Flag; shall not 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 or flag of that Ship without the prior written consent of the Agent (acting on the authority of the Majority Lenders), such consent not to be unreasonably withheld.
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14.3	Repair and classification. Each Borrower shall keep its Ship in a good and safe condition and state of repair:
(a)	consistent with first‑class ship ownership and management practice;
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(b)	so as to maintain such Ship with the highest classification available for vessels of the same age, type and specification as that Ship with Lloyd’s Register of Shipping (or such other first class classification society being a member of IACS and as may be approved by the Security Trustee), free of overdue recommendations and conditions affecting that Ship’s class; and
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(c)	so as to comply with all laws and regulations applicable to vessels registered at ports in 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.
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14.4	Modification. The Borrowers shall not (and shall procure that no Approved Manager shall) make any modification or repairs to, or replacement of, the Ships or equipment installed on them which would or might materially alter the structure, type or performance characteristics of the Ships or materially reduce their value.
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14.5	Removal of parts. A Borrower shall not (and shall procure that no Approved Manager shall) remove any material part of its Ship, or any item of equipment installed on, such 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 Lenders and becomes on installation on that Ship the property of the relevant Borrower and subject to the security constituted by the Mortgage Provided that a Borrower may install leased equipment owned by a third party if the equipment can be removed without any risk of damage to its Ship.
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14.6	Surveys. Each Borrower shall submit its Ship regularly to all periodical or other surveys which may be required for classification purposes, at the cost and expense of the Borrowers. The Agent shall have the right to request one or more technical survey reports of the Ships by surveyors appointed to by the Agent at the cost of the Borrowers, provided that the frequency of such reports shall be limited to one per year (unless an Event of Default shall have occurred and is continuing).
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14.7	Inspection. The Borrowers shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ships at all reasonable times, but without interference to the Ships’ trading and operations, to inspect their condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. Provided that the Ships are found to be in satisfactory condition, the cost of such inspections shall be borne by the Borrowers not more than once per year.
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14.8	Prevention of and release from arrest. Unless contested in good faith by appropriate proceedings, the Borrowers shall promptly discharge:
(a)	all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ships, their Earnings or their Insurances; and
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(b)	all taxes, dues and other amounts charged in respect of the Ships, their Earnings or their Insurances;
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and, forthwith upon receiving notice of the arrest of a Ship, or of her detention in exercise or purported exercise of any lien or claim, the Borrowers shall procure her prompt release by providing bail or otherwise as the circumstances may require.

14.9	Compliance with laws etc. Each Borrower shall:
(a)	comply, or procure compliance by the Approved Manager 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 (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port);
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(b)	comply (and procure that each Security Party and each Affiliate of any of them shall comply) in all aspects with all Sanctions;
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(c)	not employ its Ship nor allow her employment in any manner contrary to any Sanctions;
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(d)	in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit its 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 Majority Lenders has been given and the Borrowers have (at their expense) effected any special, additional or modified insurance cover which the Majority Lenders may require.
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14.10	Provision of information. The Borrowers shall promptly provide the Security Trustee with any information which the Majority Lenders reasonably request regarding:
(a)	the Ships, their employment, position and engagements;
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(b)	the Earnings and payments and amounts due to the master and crew of the Ships;
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(c)	any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ships and any payments made in respect of the Ships;
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(d)	any towages and salvages;
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(e)	their compliance, the Approved Manager’s compliance or the compliance of the Ships with the ISM Code
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and, upon the Security Trustee's request, provide copies of any current charter relating to the Ships and of any current charter guarantee, and copies of the ISM Code and ISPS Code documentation.

14.11	Notification of certain events. The Borrowers shall immediately notify the Security Trustee by letter of:
(a)	any casualty which is or is likely to be or to become a Major Casualty;
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(b)	any occurrence as a result of which a Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
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(c)	any requirement or recommendation made by any insurer or classification society (or any withdrawal of class) or by any competent authority which is not complied with in accordance with its terms;
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(d)	any arrest or detention of a Ship which is not lifted within forth eight (48) hours, any exercise or purported exercise of any lien on a Ship or her Earnings or any requisition of that Ship for hire;
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(e)	any intended dry docking of a Ship;
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(f)	any Environmental Claim made against the Borrowers or in connection with the Ships or any Environmental Incident;
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(g)	any claim for breach of the ISM Code or the ISPS Code being made against the Borrowers, the Approved Manager or otherwise in connection with the Ships; or
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(h)	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,
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and the Borrowers shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of the Borrowers’, the Approved Manager’s or any other person's response to any of those events or matters.

14.12	Restrictions on chartering, appointment of managers, etc. The Borrowers shall not without the prior written consent of the Agent (acting on the authority of the Majority Lenders):
(a)	let a Ship on demise charter for any period;
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(b)	enter into any time charter or bareboat charter or consecutive voyage charter in respect of a Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;
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(c)	enter into any charter in relation to a Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
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(d)	charter a Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
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(e)	appoint a commercial, technical or operational manager of a Ship (other than the Approved Manager) or agree to any material alteration to the terms of the Approved Manager's appointment (and in respect of which, the consent of the Agent shall not be unreasonably withheld);
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(f)	de‑activate or lay up a Ship;
(g)	change the legal ownership of the shares in a Ship;
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(h)	put a Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed Seven Hundred Fifty Thousand Dollars ($750,000) (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 her Earnings for the cost of such work or otherwise; or
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(i)	change the classification society with which a Ship is classed (and in respect of which, the consent of the Agent and the authority of the Majority Lenders shall not be unreasonably withheld).
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14.13	Notice of Mortgage. The Borrowers shall keep each Mortgage registered against the relevant Ship as a valid first priority mortgage, carry on board that Ship a certified copy of such Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of such Ship a framed printed notice stating that such Ship is mortgaged by the relevant Borrower to the Lenders.
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14.14	Sharing of Earnings. The Borrowers shall not enter into any agreement or arrangement for the sharing of any Earnings other than a profit sharing agreed at arm’s length under a charter party provided that it is not a part of any pool arrangement, in which case the Agent’s prior written consent will be required (such consent not to be unreasonably withheld).
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14.15	ISPS Code. The Borrowers shall comply with the ISPS Code and in particular, without limitation, shall:
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(a)	procure that a 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 each Ship an ISSC; and
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(c)	notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
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14.16	Charter Assignment. if a Borrower enters into any other time charter or contract of affreightment in respect of a Ship which is of twelve (12) months or more in duration, or is capable of exceeding twelve (12) months in duration, that Borrower shall execute in favour of the Security Trustee a Charter Assignment and notice of assignment (and shall try to obtain an acknowledgement of the same from the relevant charterer or counterparty) of such time charter or contract of affreightment in such form and on such terms as the Agent may reasonably require, and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 2, 3, 4 and 5 of Schedule 3, Part A hereof as the Agent may reasonably require.
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14.17	No freight derivatives. The Borrowers shall not enter into or agree to enter into (without the consent of the Majority Lenders, such consent not to be unreasonably withheld) any freight derivatives or any other instruments which have the effect of hedging forward exposure to freight derivatives.
15.	ASSET COVER RATIO SHORTFALL - ship’s valuation
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15.1	Minimum Security Cover; Provision of additional security cover; prepayment of Loan. In the event the Agent (acting on the instructions of the Majority Lenders) notifies the Borrowers that:
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(a)	the aggregate of the Market Value (determined as provided below) of the Ships; plus
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(b)	the net realisable value of any additional security previously provided under this Clause 15 (but always excluding any amounts standing to the credit of the Earnings Account or the Retention Account or the Cash Collateral Account),
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is during the Security Period below the Asset Cover Ratio, the Borrowers undertake that they will, within thirty (30) days after the date on which the Agent's notice is served, either:

(i)	provide, or ensure that a third party provides, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which consists of either (aa) cash pledged to the Security Trustee or any other Creditor Party which when in the form of cash in Dollars, will be valued on a Dollar for Dollar basis or (bb) a Security Interest (including, but not limited to, a first priority mortgage over another vessel), covering such asset or assets and documented in such terms as the Agent may, with authorisation from the Majority Lenders, approve or require; or
(ii)	prepay in accordance with Clause 8 such part of the Loan as will eliminate the shortfall, however, clause 8.10 will not be applicable in this Clause 15.1 (ii) and such prepayment will be applied against repayment instalments of the Loan (including the payment of the Balloon Instalment) on a pro rata basis.
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15.2	Meaning of additional security. In Clause 15.1 “security” means a Security Interest over an asset or assets (whether securing the Borrowers’ liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit or other security in respect of the Borrowers’ liabilities under the Finance Documents, in each case in a form and substance acceptable to the Agent in its sole discretion.
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15.3	Requirement for additional documents. The Borrowers shall not be deemed to have complied with Clause 15.1(i) above until the Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 3 (Part A) and such legal opinions in terms acceptable to lawyers selected by the Agent in its sole discretion.
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15.4	Valuation of a Ship. Subject to the following provisions of this Clause 15.4, the Market Value of a Ship shall be determined:
(a)	in Dollars, as at the date of (or no earlier than 30 days prior to the Drawdown Date) such valuation;
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(b)	by an independent shipbroker selected by or acceptable to the Agent and reporting to the Agent;
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(c)	with or without physical inspection of that Ship (as the Agent may require);
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(d)	on the basis of a sale for prompt delivery for cash, free of charter and free of encumbrances on normal arm's length commercial form as between a willing seller and a willing buyer.
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15.5	Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 15.1 (i) and which consists of a Security Interest over a vessel other than a Ship shall be that shown by way of a valuation complying with the requirements of Clause 15.4.
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15.6	Valuations binding and conclusive. Any valuation under Clause 15.1(i), 16.4 or 16.5 shall be binding and conclusive evidence of the Market Value of a Ship or of the other assets it refers to at the date of such valuation.
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15.7	Provision of information. The Borrowers shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.4 or Clause 15.5 with any information which the Agent or the shipbroker or expert may reasonably 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 the shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.
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15.8	Payment of valuation expenses. Without prejudice to the generality of the Borrowers’ obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers shall, subject to the provisions of Clause 15.9, on demand, pay the Agent the amount of the fees and expenses of any shipbrokers or experts 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. ****
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15.9	Frequency of valuations. The Agent shall be entitled to obtain written valuations of the Ships prior to the drawdown of an Advance and any time during the Security Period, provided that after drawdown of the Loan the costs and expenses of such shall only be borne by the Borrowers once per year (unless an Event of Default has occurred and is continuing, in which case the Agent shall be entitled to obtain a valuation at any time, at the cost and expense of the Borrowers).
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16.	PAYMENTS AND CALCULATIONS
16.1	Currency and method of payments. All payments to be made by the Lenders or by the Borrowers under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
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(i)	by not later than 11.00 a.m. (New York City time) on the due date;
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(ii)	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);
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(iii)	if in Dollars, to the account of the Agent with such corresponding bank in New York as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and
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(iv)	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.
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16.2	Payment on non-Business Day. If any payment by the Borrowers under a Finance Document would otherwise fall due on a day which is not a Business Day:
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(a)	the due date shall be extended to the next succeeding Business Day; or
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(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,
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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:
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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
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(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.
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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 the Borrowers or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrowers or that Lender until the Agent has satisfied itself that it has received that sum.
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16.7	Refund to Agent of monies not received. If and to the extent that the Agent makes available a sum to the Borrowers or a Lender, without first having received that sum, the Borrowers or (as the case may be) the Lender concerned shall, on demand:
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(a)	refund the sum in full to the Agent; and
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(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.
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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.
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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 other Security Party.
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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 other Security Party.
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16.11	Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrowers or any other Security Party to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor Party.
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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:‑
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(a)	FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:
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(i)	first, 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 at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrowers under Clauses 20, 21, and 22 of this Agreement or by the Borrowers or any other Security Party under any corresponding or similar provision in any other Finance Document);
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(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
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(iii)	thirdly, in or towards satisfaction of the Loan on a pro rata basis;
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(b)	SECONDLY: 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 Borrowers, the Security Parties and the other Creditor Parties, states in its reasonable 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 Clause 17.1(a); and
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(c)	THIRDLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.
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17.2	Variation of order of application. The Agent may, following the occurrence of an Event of Default or a Potential Event of Default which is continuing, with the authorisation of the Majority Lenders 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.
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17.3	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 the Borrowers or any Security Party.
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18.	APPLICATION OF EARNINGS
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18.1	Payment and application of Earnings. The Borrowers undertake with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignment), as long as no Event of Default has occurred which is continuing, all the Earnings of a Ship are credited to the relevant Earnings Account and shall be applied as follows:
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(a)	first, towards payment of all sums other than principal and interest due to the Lenders under this Agreement and the other Finance Documents;
(b)	secondly, towards payment of the next instalment of principal and the next payment of interest due to the Lenders in accordance with the provisions of Clause 18.2;
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(c)	thirdly, any surplus shall (subject always to the other provisions of this Clause 18 and provided no Event of Default is continuing) be available to the Borrowers, and
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it is expressly agreed that so long as no Event of Default shall have occurred and is continuing, the Borrowers shall be entitled to withdraw from the Earnings Account any amount provided, however, that if in the opinion of the Agent or the Security Trustee (as the case may be) there will be insufficient sums standing to the credit of the Earnings Account to meet payments under (a) and (b) above, the Agent or the Security Trustee (as the case may be) shall be entitled to refuse any withdrawal from the Earnings Account.

18.2	Monthly retentions. The Borrowers undertake with each Creditor Party to ensure that, in each calendar month of the Security Period commencing one month after a Drawdown Date, on such dates as the Agent may from time to time specify, there is transferred to the Retention Account out of the aggregate Earnings received in the Earnings Account(s) during the preceding calendar month:
(a)	one‑third of the amount of the repayment instalment falling due under Clause 8 on the next Repayment Date; and
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(b)	the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest under this Agreement.
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The “relevant fraction” 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 or the last due date for payment of interest to the next due date for payment of interest under this Agreement).

18.3

Shortfall in Earnings. If the aggregate Earnings received in the Earnings Account(s) are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 18.2, the Borrowers shall make up the amount of the insufficiency on demand from the Agent; but, without thereby prejudicing the Agent’s right to make such demand at any time, the Agent may permit the Borrowers to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 18.2 from the Earnings received in the next or subsequent months.

18.4

Application of retentions. Until an Event of Default occurs, the Lenders shall on each Repayment Date and on each due date for the payment of interest under this Agreement apply in accordance with the payment details set out in Clause 16.1 so much of the balance on the Retention Account as equals:

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(a)	the repayment instalment due on that Repayment Date; or
(b)	the amount of interest payable on that interest payment date;
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in discharge of the Borrowers’ liability for that repayment instalment or that interest.

18.5	Interest accrued on Retention Account. Any credit balance on the Retention Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balance appears to the Account Bank likely to remain on the Retention Account.
18.6	Location of accounts. The Borrowers and each other holder of an Account shall maintain the Accounts with the Account Bank, free of Security Interest and rights of set-off (other than as created under the Accounts Pledges), until no amount remains outstanding under this Agreement or any other Finance Documents and shall procure that transfers are made from each Account (and irrevocably authorises the Agent following the occurrence of an Event of Default which is continuing to instruct the Account Bank to transfer from each Account) in order to facilitate the payment of amounts required and/or contemplated by this Agreement and the other Finance Documents and shall promptly:
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(a)	comply with any requirement of the Agent as to the location or re‑location of any of the Accounts;
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(b)	execute any documents which the Lenders specify to create or maintain in 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) each Account.
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18.7	Debits for expenses etc. The Agent shall be entitled (but not obliged) from time to time to debit the Earnings Account(s) with prior notice to the Borrowers in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which a Creditor Party has become entitled to demand under Clause 20 or 21.
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18.8	Borrowers’ obligations unaffected. The provisions of this Clause 18 do not affect:
(a)	the liability of the Borrowers to make payments of principal and interest on the due dates; or
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(b)	any other liability or obligation of the Borrowers or any Security Party under any Finance Document.
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19.	EVENTS OF DEFAULT
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19.1	Events of Default. An Event of Default occurs if:
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(a)	any Borrower or any Security Party fail to pay when due or (if payable on demand) three (3) days following the date on which the written demand is served any sum payable under a Finance Document or under any document relating to a Finance Document, unless such failure to pay is caused by an administrative or technical error or any disruption event in the payment/communication system which is beyond the control of that Borrower, in which case that Borrower shall rectify such error within three (3) Business Days; or
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(b)	any breach occurs of Clauses 9.2, 9.3, 10.12, 11,2, 11.11, 11.17, 12.2, 12.3, 13 or 15.1, and in case any such breach (other than those referred to in Clauses 9.2, 9.3, 13 and 15.1 hereinabove to which other grace periods are applicable, as therein provided) is in the opinion of the Security Trustee, capable of remedy, if it will continue un-remedied for seven (7) Business Days after its occurrence; or
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(c)	any breach of the obligations set out in Clause 11.21 occurs which in the reasonable opinion of the Majority Lenders could have a Material Adverse Effect.
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(d)	any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues un-remedied ten (10) days after written notice from the Agent requesting action to remedy the same; or
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(e)	(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 covered by paragraphs (a) or (b)); or
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(f)	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 in a material way when it is made; or
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(g)	any of the following occurs in relation to any Financial Indebtedness of any Borrower:
(i)	any Financial Indebtedness of any Borrower is not paid when due or, if payable on demand, three (3) days following the date on which the written demand is served; or
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(ii)	any Financial Indebtedness of any Borrower 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
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(iii)	a lease, hire purchase agreement or charter creating any Financial Indebtedness of any Borrower is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or
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(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 any Borrower 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
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(v)	any Security Interest securing any Financial Indebtedness of any Borrower becomes enforceable; or
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(h)	any of the following occurs in relation to any Borrower:
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(i)	a Borrower becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
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(ii)	any assets of a Borrower are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $500,000 or more or the equivalent in another currency unless such execution, attachment, arrest, sequestration or distress is being contested in good faith and on substantial grounds and is discussed or withdrawn within thirty (30) days of the occurrence thereof; or
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(iii)	any administrative or other receiver is appointed over any asset of a Borrower; or
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(iv)	an administrator is appointed (whether by the court or otherwise) in respect of a Borrower;
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(v)	a Borrower makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or a winding up or administration order is made in relation to that Borrower, or the members or directors of that Borrower pass a resolution to the effect that it should be wound up, placed in administration; or
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(vi)	a resolution is passed, an administration notice is given or filed, a bona fide application or petition to a court is made or presented or any other step is taken by (aa) any Borrower or the Guarantor (bb) the members or directors of any Borrower or the Guarantor, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of any Borrower or the Guarantor, or (dd) a government minister or public or regulatory authority of a Relevant Jurisdiction for or with a view to the winding up of any Borrower and the Guarantor or the appointment of a provisional liquidator or administrator in respect of any Borrower or the Guarantor ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a person other than a Borrower and the 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 three months after the commencement of the winding up
(vii)	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 Borrower or of the Guarantor (other than a holder of Security Interests which together relate to all or substantially all of its assets) for the winding up of a Borrower or the Guarantor or the appointment of a provisional liquidator or administrator in respect of any of the above in any Relevant 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)) such Borrower or the Guarantor will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure
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(viii)	a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Borrower unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition; or
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(ix)	a Borrower petitions a court, or presents any proposal for, any form of judicial or non‑judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
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(x)	any meeting of the members or directors of a Borrower is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi) above; or
(xi)	in a Relevant Jurisdiction other than England, any event occurs or any procedure is commenced which, in the reasonable opinion of the Majority Lenders, is similar to any of the foregoing; or
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(i)	any Borrower 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
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(j)	it becomes unlawful in any Relevant Jurisdiction or impossible:
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(i)	for any 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
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(ii)	for the Agent, the Security Trustee, the Account Bank or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
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(k)	any consent necessary to enable a Borrower to own, operate or charter a Ship or to enable such Borrower or any Security Party to comply with any provision which the Majority Lenders (acting reasonably) consider material of a Finance Document 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
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(l)	it appears to the Majority Lenders that, without their prior consent (which shall not be unreasonably withheld), a change has occurred after the date of this Agreement in the legal or beneficial ownership of the shares of Ultra General Partner Ltd or Ultra Limited Partner Ltd or Eurodry Eco Ultra AS or the limited partnership interests in any Borrower (including, but not limited to, the percentage of the limited partnership interests held by Jianzhong Dong and Alastair Douglas James Locke in the Borrowers), or in the ultimate control of the voting rights attaching to any shares of the Guarantor as declared to the Agent prior to the execution of this Agreement. For the avoidance of doubt the Agent consents and agrees to any changes relating to the Guarantor’s trading shares in the normal course of business and confirm that such changes do not violate the terms of this Agreement; or
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(m)	any provision which the Majority Lenders (acting reasonably) 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 third party claim or interest; or
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(n)	the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
(o)	If any debt of any Security Party (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) is not paid when due or any debt of any Security Party (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) becomes due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by the relevant Security Party of a voluntary right of prepayment), or any creditor of any Security Party becomes entitled to declare its claim (which in the case of the Guarantor exceeds an aggregate amount of $1,000,000) due and payable, or any facility or commitment available to any Security Party is withdrawn, suspended or cancelled by reason of any default (however described) of such Security Party, and such debt is not discharged within seven (7) Business Days; or
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(p)	any of the following occurs in relation to any of the Ships:
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(i)	a Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of a Borrower (for any reason other than the reason of a Total Loss of such Ship) and that Borrower shall fail to procure the release of such Ship within a period of forty (40) days thereafter; or
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(ii)	any change to the name or port of registry, or flag of any Ship is made without the prior written consent of the Agent (acting on the authority of the Majority Lenders), (such consent not to be unreasonably withheld) or the registration of any Ship in the ownership of the relevant Borrower under the laws and flag of the Approved Flag State is cancelled or terminated without the prior written consent of the Agent or, if any Ship is only provisionally registered on the relevant Drawdown Date of the relevant Advance and is not permanently registered under the laws and flag of Approved Flag State at least five (5) days prior to the deadline for completing such permanent registration; or
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(iii)	in the event of hostilities in any part of the world (whether war is declared or not), any Ship is entered or trades 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 Majority Lenders has been given and the relevant Borrower being that Ship’s registered owner, has (at its expense) effected any special, additional or modified insurance cover which the Majority Lenders may require or an Approved Flag State, becomes involved in hostilities or civil war or there is a seizure of power in the relevant Approved Flag State by unconstitutional means if, in any such case, such event could in the opinion of the Majority Lenders reasonably be expected to have a Material Adverse Effect on the security constituted by any of the Finance Documents and the relevant Borrower being that Ship’s registered owner fails to register that Ship under another Approved Flag State as and when requested by the Majority lenders or do such other action as the Agent may reasonably require to ensure that such event or circumstance will not have a Material Adverse Effect within 30 days of notice from the Agent or such longer period as the Agent may in its discretion agrees; or
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(iv)	any Relevant Person and/or the Approved Manager and/or any of their respective Environmental Affiliates fails to comply with any Environmental Approval or any Environmental Law and all other laws or regulations relating to any Ship, her operation and management (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port) or any Ship is involved in any incident which gives rise or which may give rise to any Environmental Claim, if in any such case, such non-compliance or incident or the consequences thereof could be expected to have a material adverse effect on the business assets, operations, property or financial condition of any Borrower or the Guarantor or any other Security Party or on the security created by any of the Finance Documents; or
(v)	a Security Party or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which any of the Ships is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover in relation to that Ship (including without limitation, liability for Environmental Claims arising in jurisdictions where that Ship operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
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(vi)	a Ship ceases to be managed by the Approved Manager (for any reason other than the reason of a Total Loss or sale of that Ship) without the approval of the Majority Lenders (not to be unreasonably withheld) and the relevant Borrower being that Ship’s registered owner fails to appoint another Approved Manager prior to the termination of the mandate with the previous Approved Manager; or
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(vii)	any Earnings of a Ship are not paid to the relevant Earnings Account for any reason whatsoever (other than with the Agent’s prior written consent); or
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(viii)	a Ship ceases to comply with the ISM Code or, as the case may be, the ISPS Code; or
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(q)	any other event occurs or any other circumstances arise or develop including, without limitation:
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(i)	a Material Adverse Effect; or
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(ii)	any accident or other event involving a Ship in the light of which the Majority Lenders (acting reasonably) consider that there is a significant risk that the relevant Borrower, being that Ship’s registered owner, is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due.
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19.2	Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default which is continuing:
(a)	the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
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(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 terminated; and/or
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(ii)	serve on the Borrowers a notice stating that the Loan, all 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
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(iii)	take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii) above, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
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(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) above, the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
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19.3	Termination of Commitments. On the service of a notice under paragraph (a)(i) of Clause 19.2, the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall terminate.
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19.4	Acceleration of Loan. On the service of a notice under paragraph (a)(ii) of Clause 19.2, the Loan, all accrued interest and all other amounts accrued or owing from the Borrowers 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.
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19.5	Multiple notices; action without notice. The Agent may serve notices under paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
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19.6	Notification of Creditor Parties and Security Parties. The Agent shall send to each Lender, the Security Trustee, the Account Bank 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 the Borrowers or any Security Party with any form of claim or defence.
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19.7	Creditor Parties’ rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 and Clause 3.2.
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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 Borrowers 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
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(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 caused by the gross negligence 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.
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19.9	Interpretation. In Clause 19.1 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(h) “petition” includes an application.
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19.10	Relevant Persons. In this Clause 19, a “Relevant Person” means the Borrowers, the Guarantor, the Approved Manager and any other Security Party.
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20.	FEES AND EXPENSES
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20.1	Evaluation Costs and Expenses – Commitment Fee
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(a)	The Borrowers shall irrevocably and unconditionally pay to the original Lender specified in Schedule 1 (The lenders and their Commitments) of this Agreement, a non-refundable amount equal to zero point seventy five (0.75%) per centum of the Loan payable pro rata on each Drawdown Date of the Loan representing the cost and expenses for the evaluation of the Commitment and the terms on which it shall be made available (as outlined in this Agreement) and the arrangement of the drawdown of the Loan, whether in whole or in part.
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(b)	The Borrowers shall pay to the Agent a commitment fee at the rate of zero point thirty five per cent (0.35%) per annum on the undrawn portion of the Maximum Facility Amount, such fee accruing from the date hereof and being payable quarterly in arrears to the Agent on account of the Lenders on the earliest of:
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(i)	31 December 2023; or
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(ii)	the date upon which the Loan is fully utilized by the Borrowers; or
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(iii)	the date upon which the Borrowers shall have given written notification to the Agent as to its intention not to make use of the Loan.
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(c)	The Evaluation Costs and Expenses and Commitment Fee referred to in this Clause 20.1 shall not be refundable irrespective of whether the Loan is drawn or not.
20.2	Costs of negotiation, preparation etc. The Borrowers shall pay to the Agent on its demand the amount of all expenses (including, but not limited to, all legal expenses and VAT, if applicable) 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, other than any syndication costs/expenses.
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20.3	Costs of variations, amendments, enforcement etc. The Borrowers shall pay to the Agent, on the Agent's demand, the amount of all expenses incurred by a Lender in connection with:
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(a)	any amendment or supplement to a Finance Document, or any proposal for such an amendment or supplement to be made, including, but not limited to, an amendment pursuant to or contemplated by Clause 24.7;
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(b)	any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document;
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(c)	the valuation of any security provided or offered under Clause 15 or any other matter relating to such security;
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(d)	any step taken by the Agent or the Security Trustee 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.
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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 liabilities and expenses resulting from any failure or delay by the Borrowers to pay such a tax.
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20.5	Certification of amounts. A notice which is signed by at least one officer 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, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.
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21.	INDEMNITIES
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21.1	Indemnities regarding borrowing and repayment of Loan. The Borrowers shall fully indemnify the Agent and each Lender on the Agent's written demand and the Security Trustee on its demand in respect of all expenses, liabilities and losses which are 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:
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(a)	the Loan 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)	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;
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(c)	any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if payable on demand, three (3) days following the date on which the written demand is served (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 8);
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(d)	the occurrence and/or continuance of an Event of Default or a Potential Event of Default (including, but not limited to, a breach of Clauses 11.17 or 11.19) and/or the acceleration of Loan under Clause 19.4;
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21.2	Breakage costs. Without limiting its generality, Clause 21.1 covers any liability, expense 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
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(b)	in terminating, or reversing or otherwise in connection with, any open position arising under this Agreement.
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21.3	Miscellaneous indemnities. The Borrowers shall fully indemnify the Agent and the Security Trustee severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind (“liability items”) which may be made or brought against, or incurred by, the Agent or the Security Trustee, in any country, in relation to:
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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;
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(b)	any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document;
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21.4	Extension of indemnities; environmental indemnity. Without prejudice to its generality, Clause 21.3 covers:
(a)	any matter which would be covered by Clause 21.3 if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and
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(b)	any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment if such liability items would not have arise or asserted against the Lender or Agent or the Security Trustee (as the case may be) if any of them had not entered into any of the Finance Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Finance Documents.
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21.5	Currency indemnity. If any sum due from the Borrowers or any other 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:
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(a)	making or lodging any claim or proof against the Borrowers or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
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(b)	obtaining an order or judgment from any court or other tribunal; or
---	---
(c)	enforcing any such order or judgment;
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the Borrowers or such other Security Party shall indemnify the Creditor Party concerned against any 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.

This Clause 21.5 creates a separate liability of the Borrowers 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.

21.6	Certification of amounts. A notice which is signed by 1 officer 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, save for manifest error, 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, 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.
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21.8	Mandatory Costs. The Borrowers shall, on demand by the Agent, pay to the Agent for the account of a Lender, such amount which any Lender certifies in a notice to the Agent to be its good faith determination of the amount necessary to compensate it for complying with:
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(a)	in the case of a Lender lending from a lending office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that lending office; and
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(b)	in the case of any Lender lending from a lending office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions), which, in each case, is referable to that Lender's participation in the Loan.
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22.	NO SET-OFF OR TAX DEDUCTION
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22.1	No deductions. All amounts due from the Borrowers under a Finance Document shall be paid:
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(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 Borrowers is required by law to make.
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22.2	Grossing-up for taxes. If the Borrowers are required by law to make a tax deduction from any payment:
---	---
(a)	the Borrowers shall notify the Agent as soon as it becomes aware of the requirement;
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(b)	the Borrowers shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
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(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.
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22.3	Evidence of payment of taxes. Within 1 month after making any tax deduction, the Borrowers 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 “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.
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22.5	FATCA Information. ****
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(a)	Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:
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(i)	confirm to that other Party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party;
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(ii)	supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
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(iii)	supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
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(b)	If a Party confirms to another Party pursuant to paragraph (a) (i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
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(c)	Paragraph (a) 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 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 party for purposes of this paragraph (c).
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(d)	If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then 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 until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
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22.6	FATCA Deduction
(a)	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.
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(b)	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 Borrowers and the Agent and the Agent shall notify the other Creditor Parties.
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22.7	Contractual recognition of Bail-In. ****
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(a)	any Bail-In Action in relation to any such liability applicable to such Party, including (without limitation):
(i)	a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
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(ii)	a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
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(iii)	a cancellation of any such liability; and
---	---
(b)	a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability applicable to such Party.
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23.	ILLEGALITY, ETC
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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:
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(a)	unlawful or prohibited (including, without limitation, due to a breach of Clauses 11.17 or 11.19) 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
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(b)	contrary to, or inconsistent with, any regulation,
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for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

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 terminate; 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 in accordance with Clause 8.
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23.4	Mitigation. If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, 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:
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(a)	have an adverse effect on its business, operations or financial condition; or
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(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
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24.1	Increased costs. This Clause 24 applies if the Notifying Lender notifies the Agent that as a result of:
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(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
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(b)	complying with any regulation (including any regulation 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 (including, but not limited to, Basel II, Basel III, CRD IV and CRR),
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the Notifying Lender considers that it (or any of its Affiliates) has incurred or will incur an “increased cost”, that is to say:

(i)

(ii)	a reduction in the amount of any payment to the Notifying Lender under this Agreement or any Finance Document or in the effective return which such a payment represents to the Notifying Lender or on its capital;
(iii)	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
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(viii)	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 (or any of its Affiliates) under this Agreement or any Finance Document,
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24.2	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.
24.3	Payment of increased costs. The Borrowers 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 Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
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24.4	Notice of prepayment. If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, 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.
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24.5	Prepayment; termination of Commitment. A notice under Clause 24.4 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers’ notice of intended prepayment; and:
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(a)	on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
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(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.
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24.6	Application of prepayment. Clause 8 shall apply in relation to the prepayment.
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24.7	Changes to Reference Rates
(a)	Subject to paragraph (b) of Clause 27.2, any amendment or waiver which relates to:
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(i)	providing for the use of a Replacement Reference Rate; and
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(ii)	aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
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(iii)	enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement;
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(iv)	implementing market conventions applicable to that Replacement Reference Rate;
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(v)	providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
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(vi)	adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation,
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may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrowers.

(b)	If any Lender fails to respond to a request for an amendment or waiver described in, or for any other vote of Lenders in relation to, paragraph (a) above within 5 Business Days (or such longer time period in relation to any request which the Borrowers and the Agent may agree) of that request being made:
(i)	its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and
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(ii)	its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(c)	In this Clause 24.7:
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“Published Rate” **** means:

(a)	SOFR; or
(b)	Term SOFR for any Quoted Tenor.
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“Quoted Tenor” **** means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.

“Relevant Nominating Body” **** means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

“Replacement Reference Rate” **** means a reference rate which is:

(a)	formally designated, nominated or recommended as the replacement for a Published Rate by:

(i) the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or

(ii) any Relevant Nominating Body,

(b)	in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
(c)	in the opinion of the Majority Lenders and the Borrowers, an appropriate successor or alternative to a Published Rate.
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25.	SET‑OFF
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25.1	Application of credit balances. Each Creditor Party may without prior notice at any time after the occurrence of an Event of Default which is continuing:
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(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 Borrowers and/or the Guarantor at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrowers and/or the Guarantor to that Creditor Party under any of the Finance Documents; and
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(b)	for that purpose:
(i)	break, or alter the maturity of, all or any part of a deposit of the Borrowers and/or the Guarantor;
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(ii)	convert or translate all or any part of a deposit or other credit balance into Dollars;
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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.
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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).
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25.3	Sums deemed due to a Lender. For the purposes of this Clause 25, a sum payable by the Borrowers and/or the Guarantor 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.
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25.4	No Security Interest. This Clause 25 gives the Lenders a contractual right of set off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrowers and/or the Guarantor.
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25.5	No Borrowers’/Guarantor’s set off. The Borrowers and/or the Guarantor shall not have a right of set off in relation to sums that may be due from any Creditor Party under this Agreement or any of the other Finance Documents.
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26.	TRANSFERS AND CHANGES IN LENDING OFFICES
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26.1	Transfer by the Borrowers. The Borrowers may not:
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(a)	without the prior written consent of the Agent (given on the instructions of all of the Lenders), transfer any of its rights or obligations under any Finance Document;
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(b)	without the prior written consent of the Agent (given on the instructions of all the Lenders), enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.
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26.2	Transfer by a Lender. Subject to Clause 26.4, a Lender (the “Transferor Lender”) may, at its sole discretion and at the expense of the Transferee Lender (as hereinafter defined), without the consent of and/or the prior consultation with the Borrowers (but with notice to the Borrowers) and/or any Security Party, at any time assign or transfer by novation (as applicable):
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(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);
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to be (in the case of its rights) assigned or transferred to, or (in the case of its obligations) assumed by and novated to, another bank or financial institution, or another branch, any Subsidiary or Affiliate of, or company controlled by, the Lender or a member of the European Central Bank System, a credit institution, a financial services institution, a financial institution, an insurance company, a social security a pension fund, a hedge fund, an investment company/trust or a special purpose company established for the purposes of securitization, or by 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 4 with any modifications approved or required by the Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender and should the Transfer Certificate alone be not sufficient in the Transferor Lender’s or Transferee Lender's jurisdiction for a Transferor Lender to transfer all or a proportionate share of the Transferor Lender's interest in the security constituted by the Finance Documents, the Borrowers hereby undertake, immediately on being requested to do so by the Agent and at the cost of the Transferee Lender, to enter into, and procure that the other Security Parties shall (at the cost of the Transferee Lender) enter into, such documents as may be necessary or desirable to transfer to the Transferee Lender all or the relevant part of such Lender’s interest in the Finance Documents and all relevant references in this Agreement to such Lender shall thereafter be construed as a reference to the Transferor Lender and/or its Transferee Lender (as the case may be) to the extent of their respective interests.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be dealt with separately in accordance with the Agency and Trust Deed.

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, the Arranger, the Account Bank and each of the Lenders;
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(b)	on behalf of the Transferee Lender, send to the Borrowers and each Security Party letters or faxes or electronic mail notifying them of the Transfer Certificate and attaching a copy of it;
---	---
(c)	send to the Transferee Lender copies of the letters or faxes or electronic mail 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. 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 Borrowers, any other Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
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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. In addition, where security rights (such as pledge and mortgage rights) created in the interest of the Lender concerned were transferred to the successor as a result of such a merger, de-merger or other reorganisation, then such rights will serve as if they were created in the interest of the successor.
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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, interests and/or obligations (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned and/or transferred by novation (as applicable) to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrowers or any other Security Party had against the Transferor Lender;
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(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 Borrowers 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 21, 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 Borrowers or any other 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) 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

---

26.10	Authorisation of Agent to sign Transfer Certificates. The Borrowers, the Arranger, the Account Bank, the Security Trustee, 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 $2,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender. Such fees will not burden any of the Security Parties under any circumstances.
---	---
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 Borrowers, any other 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 to a Transferee Lender. A Lender may disclose to a potential Transferee Lender or sub‑participant any information necessary to effect the relevant transaction which the Lender has received in relation to the Borrowers, any other Security Party or their affairs under or in connection with any Finance Document, provided that the Lender shall ensure that such person shall have entered into an undertaking of confidentiality with the Lender.
---	---
26.14	Change of lending office. A Lender may change its lending office without consultation with the Borrowers 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 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.
---	---
26.16	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, the Borrowers or any other 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 Lender as a party to any of the Finance Documents; or
(ii)	require any payments to be made by the Borrowers or any other 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.
---	---
26.17	DAC6. Nothing in any Finance Document shall prevent disclosure of any confidential information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A1 of Annex IV of Directive 2011/16/EU, if applicable.
---	---
26.18	Disclosure of information to a service provider. Further to Clause 26.13 and without limiting the foregoing, the Borrowers authorise any of the Lenders to disclose all information related or connected to:
---	---
(a)	the Ships or any other vessel owned or operated by a Security Party;
---	---
(b)	the negotiation, drafting and content of this Agreement and the Finance Documents;
---	---
(c)	the Loan; or
---	---
(d)	any Security Party,
---	---

27.

VARIATIONS AND WAIVERS

27.1

---

27.2	Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 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 Applicable Margin or in the calculation of Interest;
---	---
(b)	a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, or other sums payable under this Agreement;
---	---
(c)	an increase in any Lender's Commitment;
---	---
(d)	an extension of the Availability Period;
---	---
(e)	a change to the definition of “Majority Lenders”, “Finance Documents”, “Restricted Party”, “Sanctions”, “Sanctions Authority” or “Sanctions List”;
---	---
(f)	a change to the preamble or to Clause 2, 3, 4, 5.1, 11.17, 11.19, 17, 19 or 30;
---	---
(g)	a change to Clause 3 or this Clause 27;
---	---
(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 and 27.2, 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:
---	---
(a)	a provision of this Agreement or another Finance Document; or
---	---
(b)	an Event of Default; or
---	---
(c)	a breach by any Borrower or any other 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,
---	---

27.4	Notification of Variation or Waiver. No variation or waiver may be made before the date falling ten (10) Business Days after the terms of that variation or waiver have been notified by the Agent to the Lenders. The Agent shall notify the Lenders reasonably promptly of any variations or waivers proposed by the Borrowers.

27.5	Variation or Waiver: FATCA.

Notwithstanding the foregoing, if the Agent or a Lender reasonably believes that an amendment or waiver may constitute a “material modification” for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrowers and the Agent accordingly, that amendment or waiver may, subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender (as the case may be).

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 or electronic mail; 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 shall be sent:
---	---
(a)	to the Borrowers:	c/o Eurodry Ltd
---	---	---
		4, Messogiou & Evropis Street
		151 24, Maroussi
		Athens, Greece
		Fax No: +30 2111 804097
		Email: aha@euroseas.gr
		Attn: Mr. Tassos Aslidis/Simos Pariaros
(b)	to a Lender:	At the address below its name in
		Schedule 1 or (as the case may require) in the relevant Transfer Certificate;
(c)	to the Arranger, Account Bank and Security Trustee:	EUROBANK S.A.
		83 Akti Miaouli & 1, Flessa Street
		185 38 Piraeus
		Greece
		Fax No: +30 210 4587877;

(d)	to the Agent:	EUROBANK S.A.
		83 Akti Miaouli & 1, Flessa Street
		185 38 Piraeus
		Greece
		Fax: +30 210 4587877
		Email: ShippingLoansAdministration@eurobank.gr

or to such other person, address or fax number as is notified by the Borrowers or any other Security Party or the Agent, the Security Trustee or a Lender (as the case may be) to the other parties to this Agreement in writing.

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;
---	---
(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;
---	---
(c)	a notice which is sent by e-mail shall be deemed to be effective in accordance with paragraphs (c) and (d) of Clause 28.7.
---	---
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
---	---
(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 one 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,
---	---

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. ****
(a)	Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website), if those two Parties:
---	---

(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

(ii) notify each other of any change to their respective addresses or any other such information supplied to them by not less than five (5) Business Day’s notice.

(b)	Any such electronic communication as specified in paragraph (a) above to be made between a Security Party and the Agent or any other Creditor Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.
(c)	Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and, in the case of any electronic communication made by a Party to the Agent or any other Creditor Party, only if it is addressed in such a manner as the Agent or such other Creditor Party shall specify for this purpose.
---	---
(d)	Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
---	---
(e)	Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 28.7.
---	---
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 “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.
---	---

29.3	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.
29.4	Counterparts. A Finance Document may be executed in any number of counterparts.
---	---
29.5	PATRIOT Act Notice. Each of the Agent and the Lenders hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies the Borrowers and each other Security Party, which information includes the name and address of the Borrowers and each other Security Party and such other information that will allow the Agent and each of the Lenders to identify the Borrowers and each Security Party in accordance with the PATRIOT Act.
---	---
30.	Governing LAW AND JURISDICTION
---	---
30.1	Governing 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	Jurisdiction. ****
---	---
(a)	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a "Dispute").
---	---
(b)	The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
---	---
(c)	This Clause 30.2 is for the benefit of the Creditor Parties only. As a result, no Creditor Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Creditor Parties may take concurrent proceedings in any number of jurisdictions.
---	---

30.3	Service of process.
(a)	Without prejudice to any other mode of service allowed under any relevant law, the Borrowers (and the Borrowers shall procure that each other Security Party, other than a Security Party incorporated in England and Wales):
---	---
(i)	irrevocably appoint Messrs Shoreside Agents Ltd at 5 St Helen’s Place, London EC3A 6AB, England (Tel.: +44 (0)203771 8869, fax: +44 (0)203771 8870, attention of: Mrs Electra Panayotopoulos (email:electra.panayotopoulos@shoresidelaw.com), Mr. Andrew Johnson (email Andrew.Johnson@shoresidelaw.com) as its agent for service of process in relation to proceedings of any kind, including an application for a provisional or protective measure (“proceedings”) before the English courts in connection with this Agreement and any other Finance Document; and
---	---
(ii)	agrees that (on the understanding that process has first duly been served upon the process agent) failure by a process agent to notify the Borrowers or the relevant Security Party of the process will not invalidate the proceedings concerned.
---	---
(b)	If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Borrowers must immediately (and in any event within seven (7) days of such event taking place) appoint another agent on terms reasonably acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose and will duly notify the Borrowers on the contact details of the same.
---	---
30.4	Creditor Parties’ rights unaffected. Nothing in this Clause 30 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 settlement of any Dispute, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
---	---

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year first before written.

SCHEDULE 1

THE LENDERS AND THEIR COMMITMENTS

Name of Lender	Lending Office<br><br> <br>and<br><br> <br>contact details	Total Commitments ($)
Eurobank S.A.	Lending office<br><br> <br>83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece<br><br> <br>Contact details<br><br> <br>83 Akti Miaouli & 1, Flessa Street,185 38 Piraeus, Greece<br><br> <br>Fax No: +30 210 4587877<br><br> <br>Attn: Loans Administration	22,000,000

SCHEDULE 2

DRAWDOWN NOTICE

To:	EUROBANK S.A.

83, Akti Miaouli

185 38 Piraeus

Greece

Attention: [Loans Administration]	[●] 2023
1.	We refer to the loan agreement (the “Loan Agreement”) dated [●] 2023 and made between (1) ourselves as Borrower, (2) the Lenders referred to therein and (3) yourselves as Arranger, Account Bank, Agent and as Security Trustee in connection with a secured term loan of up to $22,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
---	---
2.	We request to draw [Advance A] [ Advance B] as follows:
---	---

Amount: $ [●];

Drawdown Date: [●] 2023;

Duration of the first Interest Period shall be [●] months;

3.	Payment instructions: Please credit account of [●] and numbered [●] held in our name with the Shipping Branch EUROBANK S.A. with the amount of [●], for onward remittance [along with Borrower’s equity funds, under separate instructions value [●] to [●] swift code [●], to be released in accordance with the relevant clauses of the relevant escrow letter dated 20 September 2023 (herein called the “Escrow Letter”), attached to this Drawdown Notice as Appendix 1].We represent and warrant that:
(e)	the representations and warranties in Clause 10 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at this date;
---	---
(f)	there has been no Material Adverse Change since the date of the accounts referred to in Clause 11.6 of the Loan Agreement;
---	---
(g)	the said [Advance A] [ Advance B] will be used for our own benefit and under our full responsibility and exclusively for the purposes specified in the preamble of the Loan Agreement; and
---	---
(h)	no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the said [Advance A] [ Advance B].
---	---
4.	This notice cannot be revoked without the prior consent of the Majority Lenders.
---	---
5.	This notice is governed by English law.
---	---

Yours faithfully

[●]

authorised signatory for

CHRISTOS ULTRA LP

MARIA ULTRA LP

SCHEDULE 3

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a):

1.	A duly executed original of this Agreement, the Agency and Trust Deed, the Guarantee and the Accounts Pledges.
2.	Copies of the certificate of conversion, certificate of limited partnership and limited partnership agreement (including any amendments and restatements thereto) of each Borrower and the certificate of incorporation and constitutional documents of the Guarantor, the Approved Manager and Eurobulk Ltd., together with up to date evidence of the good standing.
---	---
3.	Originals of resolutions of the directors and limited partners of each Borrower and originals of the relevant minutes containing the resolutions of the directors of the Guarantor, the Approved Manager and Eurobulk Ltd. authorising the execution of each of the Finance Documents referred to at 1 above to which each Borrower and/or any other Security Party is a party and authorising named officers of that Borrower to give the Drawdown Notice and other notices under this Agreement.
---	---
4.	The original of any power of attorney under which any Finance Document referred to at 1 above is executed on behalf of each Borrower, the Guarantor, the Approved Manager and Eurobulk Ltd.
---	---
5.	Copies of all consents which a Borrower or any other Security Party requires to enter into, or make any payment under, any Finance Document.
---	---
6.	All documentation required by the Agent in respect of the Borrowers and any other Security Party pursuant to any Lender’s “Know your customer” requirements based on applicable laws and regulations from time to time and the Agent’s own internal guidelines from time to time, together with such other documents or evidence as such Lender may reasonably require with respect to money laundering regulations.
---	---
7.	Copies of each MOA and each Escrow Letter and of all documents signed or issued by each Borrower or the relevant Sellers under or in connection with it and such documentary evidence as the Agent and its legal advisors may require in relation to the due authorisation and execution by that Borrower and the relevant Sellers of the relevant MOA, the relevant Escrow Letter and of all documents to be executed by that Borrower and the relevant Sellers.
---	---
8.	if applicable a copy of the Charter (and any addenda thereto).
---	---
9.	Documentary evidence that the agent for service of process named in Clause 30 of this Agreement has accepted its appointment.
---	---
10.	Favourable legal opinions from lawyers appointed by the Agent on such matters concerning English law or the laws of the Marshall Islands and/or Liberia and such other Relevant Jurisdictions as the Agent may require.
---	---

11.	A certificate in a form and substance satisfactory to the Lenders confirming the legal ownership and the beneficial ownership of the limited partnership interests in each Borrower, in a form and substance satisfactory to the Agent in its sole discretion.
12.	The originals of any mandates or other documents required in connection with the opening and operation of the Earnings Account, the Retention Account, the Cash Collateral Account.
---	---
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.
---	---

PART B

The following are the documents referred to in Clause 9.1(b):

1.	The following delivery documents in respect of each Ship:
(a)	evidence that the ten per cent (10%) deposit in respect of a Ship has been duly paid and all other sums of money (other than the Loan where applicable) required to be paid by the relevant Borrower to the relevant Sellers pursuant to the relevant MOA and the relevant Escrow Letter have been duly paid on the respective Delivery Date;
---	---
(b)	evidence proving each Sellers’ title to the relevant Ship;
---	---
(c)	copies of the corporate documentation of the relevant Sellers proving the legal existence of that Sellers and the due authorization of the sale of the relevant Ship;
---	---
2.	On the Delivery Date for a Ship and/or (as the case may be) prior to or simultaneously with the release of the Purchase Price to the relevant Sellers, a duly executed original of:
---	---
(a)	evidence proving a Ship free of any Security Interests, liens, debts or claims of any nature whatsoever;
---	---
(b)	a duly executed original of (i) the Bill of Sale, (ii) the Protocol of Delivery and Acceptance and (iii) the Commercial invoice for the respective Ship, each duly executed and delivered;
---	---
(c)	the Mortgage;
---	---
(d)	the General Assignment;
---	---
(e)	the Approved Manager’s Undertaking-Assignment;
---	---
(f)	the Guarantor’s Undertaking-Assignment;
---	---
(g)	if applicable, a Charter Assignment,
---	---

together with (if not already delivered pursuant to Schedule 3, Part A, paragraph 3) up to date evidence of the good standing, originals resolutions of the directors and limited partners of the Borrowers and originals of the relevant minutes containing the resolutions of the directors of the Guarantor and the Approved Manager authorising the execution of each of the Finance Documents with respect to the execution of such Finance Documents, and all other documents required by any of such Finance Documents, including, without limitation, all notices of assignment and/or charge;

3.	Documentary evidence that as from each Delivery Date and/or (where applicable) as from the relevant Drawdown Date:
(a)	each Ship is provisionally registered in the name of the relevant Borrower under the Approved Flag;
---	---
(b)	each Ship is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents related to that Ship;
---	---
(c)	each Ship is classed with the highest available class with DNV or such any other first class classification society which is a member of IACS acceptable to the Agent, free of all overdue recommendations and conditions of such classification society affecting Class;
---	---
(d)	the Mortgage in respect of each Ship has been duly registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State;
---	---
(e)	each Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances shall have been complied with; and
---	---
(f)	where a Ship is subject to a Charter, a signed copy of that Charter and/or a copy of the recap agreement containing the terms of the relevant fixture.
---	---
4.	Documents establishing that each Ship is, as from the relevant Drawdown Date, managed by the Approved Manager on terms acceptable to the Agent, together with:
---	---
(a)	a copy of the ship management agreement for each Ship;
---	---
(b)	copies of the Document of Compliance and Safety Management Certificate and ISSC;
---	---
(c)	copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to the Borrowers have requested not later than 2 days before the relevant Drawdown Date, certified as true and complete in all material respects by the Borrowers and the Approved Manager;
---	---
5.	Subordination letters from any other co-assureds named in the insurance policies for each Ship (other than the relevant Borrower and the relevant Approved Manager), in the form required by the Agent;
---	---
6.	A valuation of each Ship addressed to the Agent (at the Borrowers’ expense) prepared in accordance with Clause 15.4 of this Agreement and not older than thirty (30) days prior to the Drawdown Date of the Loan, in a form satisfactory to the Agent;
---	---
7.	Evidence that an aggregate sum equal to the Minimum Liquidity is standing to the credit of an account or accounts opened or to be opened with the Lenders/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrowers or the Guarantor or any other entity acceptable to the Agent pursuant to the provisions of Clause 12.5 of this Agreement;
---	---
8.	A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the insurances for each Ship as the Agent may require, and at the cost and expense of the Borrowers;
---	---

9.	Favourable legal opinions from lawyers appointed by the Lenders on such matters concerning the laws of England, the laws of Liberia, the laws of the Marshall Islands, the laws of the Approved Flag State (if different) and such other Relevant Jurisdiction as the Agent may require;
10.	Receipt by the original Lender specified in Schedule 1 (The lenders and their Commitments) of this Agreement of the amount referred to in Clause 20.1 (a) representing the Evaluation Costs and Expenses and of any other fees, costs and expenses due under Clause 20 of this Agreement;
---	---
11.	On the Delivery Date of a Ship or as soon as practicable thereafter an extract of the trim and stability booklet certifying the lightweight of that Ship ;
---	---
12.	A Statement of Compliance – Fuel Oil Consumption Reporting for each Ship and the trading certificates of that Ship promptly upon their issuance;
---	---

PART C

CONDITIONS SUBSEQUENT

(1)	Letters of undertaking. Letters of undertaking in respect of the Insurances as required by the Finance Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Creditor Parties.
(2)	Service of notices and acknowledgements of notices to the Charterer. Service of all notices of assignment and/or charge given pursuant to any Finance Documents by the Agent pursuant to Part A or Part B of this Schedule 3 and (on an effort basis) an acknowledgement by the Charterer of any notice of assignment executed in connection with a Charter Assignment, in any case provision of same is not delayed or denied by the Charterer.
---	---
(3)	Legal opinions. Such of the legal opinions specified in Part B of this Schedule 3 as have not already been provided to the Agent.
---	---
(4)	Ship’s trading certificates in force and relevant confirmation. (if not already delivered pursuant to Schedule 3, Part B, paragraph 11), copies of all trading certificates of a Ship as soon as practicable after the relevant Delivery Date, to be in force and effect and a signed confirmation in writing by the relevant Borrower, confirming that all trading certificates of that Ship are up to date and in full force as per the applicable rules and regulations thereto.
---	---

SCHEDULE 4

TRANSFER CERTIFICATE

To:	EUROBANK S.A. for itself and for and on behalf of the Borrowers, each other Security Party, the Arranger, the Account Bank, the Agent, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below.

[●]

1.	This Certificate relates to the loan agreement dated [●] 2023 (the “Loan Agreement”) and made between (1) CHRISTOS ULTRA LP and MARIA ULTRA LP as joint and several borrowers (the “Borrowers”), (2) the banks and financial institutions named therein as Lenders, (3) EUROBANK S.A. as Arranger, Account Bank, Agent, and Security Trustee, for a secured term loan of up to $22,000,000.
2.	In this Certificate:
---	---

“the Relevant Parties” means the Agent, the Borrowers, each other Security Party, the Security Trustee, the Arranger, the Account Bank and each Lender;

“the Transferor” means [full name] of [lending office];

“the Transferee” means [full name] of [lending office].

Terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate.

3.	The effective date of this Certificate is [●] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
4.	The Transferor [transfers by novation to the Transferee all rights, interests and obligations] or upon transfer of rights only [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 [●] per cent of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:
---	---
Contribution	Amount transferred
---	---
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 $[●]] [from [●] per cent. of its Commitment, which percentage represents $[●]] and the Transferee acquires a Commitment of $[●].
---	---

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. [For the avoidance of doubt the Transferor shall remain as [●] under the Loan Agreement and the Finance Documents].
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 Creditor 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:
---	---
(iii)	that 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
---	---
(iv)	that 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 [transfer] [assignment] in paragraph 4 above;
---	---
(c)	undertakes with the Transferee that the Transferor will, at the expense of the Transferee, 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 either the Transferor, the Agent, the Arranger, the Account Bank, the Security Trustee or any Lender in the event that:
---	---
(iv)	the Finance Documents prove to be invalid or ineffective,
---	---
(v)	the Borrowers or any other Security Party fails to observe or perform its obligations, or to discharge its liabilities, under the Finance Documents;
---	---
(vi)	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 other Security Party under the Finance Documents;
---	---
(c)	agrees that it will have no rights of recourse on any ground against the Agent, the Arranger, the Account Bank, 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 (i) that it has full capacity to enter into this transaction and has taken all corporate action and obtained all official consents which it needs to take or obtain in connection with this transaction; and (ii) that 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; and
(f)	agrees to be responsible for all legal and other costs (including without limitation, notarial fees, breakage costs and, if applicable, VAT) incurred by the Transferor with respect to documenting the transfer and perfecting any security.
---	---
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 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 above 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.
---	---
12.	This Certificate (and any non-contractual obligations connected with it) shall be governed by and construed in accordance with English law, and may be executed in any number of counterparts, each of which shall be deemed an original).
---	---
[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

Eurobank S.A.

By: [●]

Date: [●]

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person:

(Loan Administration Department):

Telephone:

Fax:

Email:

Contact Person

(Credit Administration Department):

Telephone:

Fax:

Email:

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.

SCHEDULE 5

FORM OF COMPLIANCE CERTIFICATE

To:	OBANK S.A.
	83, Akti Miaouli
	185 38 Piraeus
	Greece
Attn:	Loans Administration

All values are in Euros.

Dear Sirs

Loan Agreement dated [●] October 2023 (the “Loan Agreement”) made between (i) the Borrowers referred to therein, (ii) the Lenders referred to therein and (iii) EUROBANK S.A. as Arranger, Account Bank, Agent and Security Trustee in connection with a loan facility of up to $22,000,000.

Terms defined in the Loan Agreement have their defined meanings when used in this Compliance Certificate.

We enclose with this certificate a copy of the annual audited consolidated financial statements of the Guarantor referred to in the Loan Agreement (the “Guarantor”) for the financial year commencing from the 31^st^ December 2023. The accounts (i) have been prepared in accordance with all applicable laws and GAAP principles and practices consistently applied, (ii) give a true and fair view of the state of affairs of the Borrowers and the Guarantor 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 Borrowers and the Guarantor.

We also enclose copies of the valuation of the Ships which is used in calculating the asset cover ratio under Clause 15.1 of the Loan Agreement as at [●].

The Borrowers represent 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 mater or event]).]

We now certify that, as at [●].

(a) minimum liquidity balances equal to the Minimum Liquidity have been maintained in an Account or Accounts held with the Lenders/Lender(s)’ banking group or the Agent or the Account Bank in the name of the Borrowers or the Guarantor or any other entity acceptable to the Agent in line with Clause 12.5;

(b) the asset cover ratio under Clause 15.1 of the Loan Agreement is [●]%.

This certificate shall be governed by, and construed in accordance with, English law.

Signed

____________________________

authorised signatory for

CHRISTOS ULTRA LP

MARIA ULTRA LP

Schedule 6

Form of Sustainability Performance Certificate

To:

From: [CHRISTOS ULTRA LP] [MARIA ULTRA LP]/EURODRY LTD.

Date [ ]

Dear Sirs

Loan agreement dated [●] October 2023 in respect of a loan of up to $22,000,000 (the “Loan Agreement”) made between (i) Christos Ultra LP and Maria Ultra LP as joint and several borrowers (the “Borrowers”), (ii) the banks and financial institutions listed in Schedule 1 thereto, as lenders (“the Lenders” or “a Lender”) and (iii) Eurobank S.A., as agent (the “Agent”), arranger (the “Arranger”), account bank (the “Account Bank”) and security trustee (the “Security Trustee”)

1.	We refer to the Loan Agreement. This is a Sustainability Performance Certificate. Words and expressions whose meanings are defined in the Loan Agreement shall have the same meanings when used herein.
2.	We hereby certify and confirm that (i) the [Ship A’s] [Ship B’s] CII Rating for the year ending on 31 December 20[●] was [●], (ii) the [Ship A’s] [Ship B’s] Reported EEOI for the same period was [●] and (iii) [Christos Ultra LP] [Maria Ultra LP] had during the same period two (2) directors being female [resulting in an Applicable Margin [reduction/increase] of [●]% per annum]/ [and therefore the Applicable Margin will remain unchanged] in respect of the Loan until the end of the next Pricing Adjustment Period.
---	---
3.	The above calculation is based on the attached documents for the year ending [ ].
---	---

Yours faithfully

[CHRISTOS ULTRA LP] [MARIA ULTRA LP]//EURODRY LTD.

By

[Director: […….Shipping]

[[Chief Executive Officer] [Chief Financial Officer]: EURODRY LTD.]

SCHEDULE 7

TIMETABLES

Delivery of a duly completed Drawdown Notice	Two Business Days before the intended Drawdown Date.
Reference Rate is fixed	Quotation Day ****

EXECUTION PAGES

THE BORROWERS
Signed by	)
Stefania Karmiri	) /s/ Stefania Karmiri
for and on behalf of	)
CHRISTOS ULTRA LP	)
in the presence of
Witness:	__/s/ Aikaterini Maria Avramidou ___
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law
Signed by	)
---	---
Stefania Karmiri	) /s/ Stefania Karmiri
for and on behalf of	)
MARIA ULTRA LP	)
in the presence of
Witness:	_/s/ Aikaterini Maria Avramidou ____
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law
THE LENDERS
---	---
Signed by	)
Stavros Yagos	) /s/ Stavros Yagos
and Nikoletta Mitropoulou	) /s/ Nikoletta Mitropoulou
for and on behalf of	)
EUROBANK S.A.	)
in the presence of
Witness:	__/s/ Aikaterini Maria Avramidou ___
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law

THE ARRANGER
Signed by	)
Stavros Yagos	) /s/ Stavros Yagos
and Nikoletta Mitropoulou	) /s/ Nikoletta Mitropoulou
for and on behalf of	)
EUROBANK S.A.	)
in the presence of
Witness:	_/s/ Aikaterini Maria Avramidou _
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law
THE ACCOUNT BANK
---	---
Signed by	)
Stavros Yagos	) /s/ Stavros Yagos
and Nikoletta Mitropoulou	) /s/ Nikoletta Mitropoulou
for and on behalf of	)
EUROBANK S.A.	)
in the presence of
Witness:	_/s/ Aikaterini Maria Avramidou ___
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law
THE AGENT
---	---
Signed by	)
Stavros Yagos	) /s/ Stavros Yagos
and Nikoletta Mitropoulou	) /s/ Nikoletta Mitropoulou
for and on behalf of	)
EUROBANK S.A.	)
in the presence of
Witness:	__/s/ Aikaterini Maria Avramidou ___
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law

THE SECURITY TRUSTEE
Signed by	)
Stavros Yagos	) /s/ Stavros Yagos
and Nikoletta Mitropoulou	) /s/ Nikoletta Mitropoulou
for and on behalf of	)
EUROBANK S.A.	)
in the presence of
Witness:	___/s/ Aikaterini Maria Avramidou___
---	---
Name:	Aikaterini Maria Avramidou
Address:	13, Defteras Merarchias Street
	Piraeus, Greece
Occupation:	Attorney-at-law

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EXHIBIT 8.1

List of Subsidiaries

Subsidiary	Country of Incorporation
Pantelis Shipping Corp.	Liberia
Eirini Shipping Ltd.	Liberia
Ultra One Shipping Ltd.	Liberia
Kamsarmax One Shipping Ltd.	Marshall Islands
Kamsarmax Two Shipping Ltd.	Marshall Islands
Areti Shipping Ltd.	Marshall Islands
Light Shipping Ltd.	Marshall Islands
Blessed Luck Shipowners Ltd.	Liberia
Good Heart Shipping Ltd.	Liberia
Molyvos Shipping Ltd.	Marshall Islands
Santa Cruz Shipowners Ltd.	Marshall Islands
Yannis Navigation Ltd.	Marshall Islands
Ultra Limited Partner Ltd.	Marshall Islands
Ultra General Partner Ltd.	Marshall Islands

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Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Aristides J. Pittas, certify that:

I have reviewed this annual report on Form 20-F of EuroDry Ltd. (the “Company”);
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;
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;
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 Rule 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
---	---

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 function):

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 24, 2024

/s/ Aristides J. Pittas

Aristides J. Pittas

Chief Executive Officer

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Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Anastasios Aslidis, certify that:

I have reviewed this annual report on Form 20-F of EuroDry Ltd. (the “Company”);
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;
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;
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 Rule 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
---	---

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 function):

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 24, 2024

/s/ Anastasios Aslidis

Anastasios Aslidis

Chief Financial Officer

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Exhibit 13.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of EuroDry Ltd. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Aristides J. Pittas, 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 24, 2024

/s/ Aristides J. Pittas

Chief Executive Officer

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Exhibit 13.2

CHIEF FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of EuroDry Ltd. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Anastasios Aslidis, 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 24, 2024

/s/ Anastasios Aslidis

Chief Financial Officer

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Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-273254 and 333-273258 on Form F-3 of our report dated April 24, 2024, relating to the consolidated financial statements of EuroDry Ltd. appearing in this Annual Report on Form 20-F for the year ended December 31, 2023.

/s/ Deloitte Certified Public Accountants S.A.

Athens, Greece

April 24, 2024

ex_656850.htm

Exhibit 97.1

EURODRY LTD.

POLICY REGARDING THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

I.	Introduction

The Board of EuroDry Ltd., a Marshall Islands corporation (the “Company”), is dedicated to maintaining and enhancing a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. In accordance with the applicable rules of the Nasdaq (the “Exchange Rules”), and Section 10D and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Board has therefore adopted this Policy, which provides for the recoupment, otherwise referred to as “clawback”, of certain erroneously awarded Incentive-Based Compensation from Executive Officers in the event of an Accounting Restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws, and which is intended to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. All capitalized terms used and not otherwise defined herein shall have the meanings set forth in Section II.

II.	Definitions
(1)	“Accounting Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” or reissuance restatement), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” or revision restatement). For the avoidance of doubt, in no event will a restatement of the Company’s financial statements that is not due in whole or in part to the Company’s material noncompliance with any financial reporting requirement under applicable law (including any rule or regulation promulgated thereunder) be considered an Accounting Restatement under this Policy. For example, a restatement due exclusively to a retrospective application of any one or more of the following will not be considered an Accounting Restatement under this Policy: (i) a change in accounting principles; (ii) revision to reportable segment information due to a change in the structure of the Company’s internal organization; (iii) reclassification due to a discontinued operation; (iv) application of a change in reporting entity, such as from a reorganization of entities under common control; and (v) revision for stock splits, reverse stock splits, stock dividends or other changes in capital structure.
---	---
(2)	“Board” means the Board of Directors of the Company.
---	---
(3)	“Clawback Eligible Incentive Compensation” means all Incentive-Based Compensation Received by an Executive Officer (i) on or after the effective date of the applicable Exchange rules adopted in order to comply with Rule 10D-1, (ii) after beginning service as an Executive Officer, (iii) who served as an Executive Officer at any time during the applicable performance period relating to the applicable Incentive-Based Compensation (whether or not such Executive Officer is serving as such at the time the Erroneously Awarded Compensation is required to be repaid to the Company), (iv) while the Company has a class of securities listed on a national securities exchange or a national securities association, and (v) during the applicable Clawback Period (as defined below).
---	---
(4)	“Clawback Period” means, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date (as defined below), and if the Company changes its fiscal year, any transition period of less than nine months within or immediately following those three completed fiscal years.
---	---
(5)	“Committee” means the Compensation Committee of the Company (if composed entirely of independent directors, or in the absence of such a committee, a majority of independent directors serving on the Board).
---	---

(6)	“Erroneously Awarded Compensation” means, with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without regard to any taxes paid.
(7)	“Exchange” means Nasdaq.
---	---
(8)	“Executive Officer” means each individual who is (a) a current or former executive officer, as determined by the Committee (as defined below) in accordance with Section 10D and Rule 10D-1 of the Exchange Act and the listing standards of the Exchange, (b) a current or former employee who is classified by the Committee as an executive officer of the Company, which includes without limitation any of the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), vice president in charge of a principal business unit, division or function (such as sales, administration or finance), and any other person who performs policy-making functions for the Company (including executive officers of a parent or subsidiary if they perform policy-making functions for the Company), and (3) an employee who may from time to time be deemed subject to the Policy by the Committee. For the avoidance of doubt, the identification of an executive officer for purposes of this Policy shall include each executive officer who is or was identified pursuant to Item 6.A of Form 20-F, as applicable.
---	---
(9)	“Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and all other measures that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall, for purposes of this Policy, be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.
---	---
(10)	“Incentive-Based Compensation” shall have the meaning set forth in Section III below.
---	---
(11)	“Exchange Effective Date” means October 2, 2023.
---	---
(12)	“Policy” means this Clawback Policy, as the same may be amended and/or restated from time to time.
---	---
(13)	Incentive-Based Compensation will be deemed “Received” in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-Based Compensation documentation is attained, even if (a) the payment or grant of the Incentive-Based Compensation to the Executive Officer occurs after the end of that period or (b) the Incentive-Based Compensation remains contingent and subject to further conditions thereafter, such as time-based vesting.
---	---
(14)	“Restatement Date” means the earlier to occur of (i) the date the Board, a committee of the Board, or the officer(s) of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.
---	---
(15)	“SARs” means shareholder appreciate rights.
---	---
(16)	“SEC” means the U.S. Securities and Exchange Commission.
---	---
III.	Incentive-Based Compensation
---	---

“Incentive-Based Compensation” shall mean any compensation that is granted, earned or vested wholly or in part upon the attainment of a Financial Reporting Measure.

For purposes of this Policy, specific examples of Incentive-Based Compensation include, but are not limited to:

●	Non-equity incentive plan awards that are earned based, wholly or in part, on satisfaction of a Financial Reporting Measure performance goal;
●	Bonuses paid from a “bonus pool,” the size of which is determined, wholly or in part, based on satisfaction of a Financial Reporting Measure performance goal;
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●	Other cash awards based on satisfaction of a Financial Reporting Measure performance goal;
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●	Restricted stock, restricted stock units, performance share units, stock options and SARs that are granted or become vested, wholly or in part, on satisfaction of a Financial Reporting Measure performance goal; and
●	Proceeds received upon the sale of shares acquired through an incentive plan that were granted or vested based, wholly or in part, on satisfaction of a Financial Reporting Measure performance goal.
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For purposes of this Policy, Incentive-Based Compensation excludes:

●	Any base salaries (except with respect to any salary increases earned, wholly or in part, based on satisfaction of a Financial Reporting Measure performance goal);
●	Bonuses paid solely at the discretion of the Committee or Board that are not paid from a “bonus pool” that is determined by satisfying a Financial Reporting Measure performance goal;
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●	Bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period;
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●	Non-equity incentive plan awards earned solely upon satisfying one or more strategic measures (e.g., consummating a merger or divestiture) or operational measures (e.g., completion of a project, acquiring a specified number of vessels, attainment of a certain market share); and
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●	Equity awards that vest solely based on the passage of time and/or satisfaction of one or more non-Financial Reporting Measures (e.g., a time-vested award, including time-vesting stock options or restricted share rights).
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IV.	Administration and Interpretation
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This Policy shall be administered by the Committee and/or the Board, and any determinations made by the Committee and/or the Board shall be final and binding on all affected individuals. The Committee and/or the Board shall determine the amount of any Erroneously Awarded Compensation Received by each Executive Officer and shall promptly deliver written notice to each Executive Officer containing the amount of any Erroneously Awarded Compensation and a demand for repayment or return of such compensation, as applicable. For the avoidance of doubt, recovery of Erroneously Awarded Compensation is on a “no fault” basis, meaning that it will occur regardless of whether the Executive Officer engaged in misconduct or was otherwise directly or indirectly responsible, in whole or in part, for the Accounting Restatement.

The Committee is authorized to interpret and construe this Policy and to make all determinations and to take such actions as may be necessary, appropriate, or advisable for the administration of this Policy and for the Company’s compliance with the Exchange Rules, Section 10D, Rule 10D-1 and any other applicable law, regulation, rule or interpretation of the SEC or the Exchange promulgated or issued in connection therewith.

V.	Recovery of Erroneously Awarded Compensation
(1)	In the event of an Accounting Restatement, the Committee shall promptly determine in good faith the amount of any Erroneously Awarded Compensation Received in accordance with the Exchange Rules and Rule 10D-1 for each Executive Officer in connection with such Accounting Restatement and shall promptly thereafter provide each Executive Officer with a written notice containing the amount of Erroneously Awarded Compensation (without regard to any taxes paid thereon by the Executive Officer) and a demand for repayment or return, as applicable.
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a.	Cash Awards. With respect to cash awards, the Erroneously Awarded Compensation is the difference between the amount of the cash award (whether payable as a lump sum or over time) that was Received and the amount that should have been received applying the restated Financial Reporting Measure.
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b.	Cash Awards Paid from Bonus Pools. With respect to cash awards paid from bonus pools, the Erroneously Awarded Compensation is the pro rata portion of any deficiency that results from the aggregate bonus pool that is reduced based on applying the restated Financial Reporting Measure.
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c.	Equity Awards. With respect to equity awards, if the shares, options or SARs are still held at the time of recovery, the Erroneously Awarded Compensation is the number of such securities Received in excess of the number that should been received applying the restated Financial Reporting Measure (or the value in excess of that number). If the options or SARs have been exercised, but the underlying shares have not been sold, the Erroneously Awarded Compensation is the number of shares underlying the excess options or SARs (or the value thereof). If the underlying shares have already been sold, then the Committee and/or Board shall determine the amount which most reasonably estimates the Erroneously Awarded Compensation.
d.	Compensation Based on Stock Price or Total Shareholder Return. For Incentive-Based Compensation based on (or derived from) stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement, (i) the amount shall be determined by the Committee and/or Board based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was Received; and (ii) the Committee and/or Board shall maintain documentation of such determination of that reasonable estimate and provide such documentation to the Exchange in accordance with applicable listing standards.
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(2)	The Committee shall have discretion to determine the appropriate means of recovering Erroneously Awarded Compensation based on the particular facts and circumstances. Notwithstanding the foregoing, except as set forth in Section VI below, in no event may the Company accept an amount that is less than the amount of Erroneously Awarded Compensation in satisfaction of an Executive Officer’s obligations hereunder.
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(3)	To the extent that the Executive Officer has already reimbursed the Company for any Erroneously Awarded Compensation Received under any duplicative recovery obligations established by the Company or applicable law, it shall be appropriate for any such reimbursed amount to be credited to the amount of Erroneously Awarded Compensation that is subject to recovery under this Policy. To the extent that the Erroneously Awarded Compensation is recovered under a foreign recovery regime, the recovery would meet the obligations of Rule 10D-1.
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(4)	To the extent that an Executive Officer fails to repay all Erroneously Awarded Compensation to the Company when due, the Company shall take all actions reasonable and appropriate to recover such Erroneously Awarded Compensation from the applicable Executive Officer. The applicable Executive Officer shall be required to reimburse the Company for any and all expenses reasonably incurred (including legal and other collection related fees) by the Company in recovering such Erroneously Awarded Compensation.
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VI.	Discretionary Recovery
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Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated by Section V above if the Committee determines that recovery would be impracticable and any of the following three conditions are met.

(1)

The Committee has determined that the direct expenses, such as reasonable legal expenses and consulting fees, paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. In order for the Committee to make this determination, the Company must make a reasonable attempt to recover the Erroneously Awarded Compensation, document such attempt(s) to recover, and provide such documentation to the Exchange;

(2)

Recovery would violate home country law where that law was adopted prior to November 28, 2022, provided that, before determining that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company has obtained an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation and a copy of the opinion is provided to Exchange;

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(3)	Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code of 1986, as amended, and regulations thereunder.
VII.	Recoupment Period Covered and Amount
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If an Accounting Restatement occurs, the Committee shall review all Incentive-Based Compensation that was granted, vested or earned on the basis of having met or exceeded Financial Reporting Measures and that was Received by an Executive Officer during the Clawback Period. With respect to each Executive Officer, the Committee shall, as provided under this Policy, seek to require the forfeiture or repayment of (1) the Erroneously Awarded Compensation, whether vested or unvested and including proceeds received upon the sale of shares acquired through an incentive plan that were granted or vested based wholly or in part on satisfying a Financial Reporting Measure, Received during the Clawback Period in the event of an Accounting Restatement, and (2) to the extent the Executive Officer engages in Detrimental Conduct, applicable Incentive-Based Compensation received thereafter.

Compensation shall be deemed to have been Received in the fiscal period in which the Financial Reporting Measure is attained, even if the Incentive-Based Compensation is not actually paid until a later date or where the compensation is subject to additional service-based or non-financial goal-based vesting conditions after the period ends. The amount to be recovered will be as provided for in this Policy.

VIII.	Method of Recovery of Erroneously Awarded Compensation

The Committee will determine, in its sole discretion, the method for recovering Erroneously Awarded Compensation hereunder, which may include, without limitation:

(1)	Requiring reimbursement of cash Incentive-Based Compensation previously paid;
(2)	Seeking recovery of any gain realized on the granting, vesting, exercise, settlement, sale, transfer or other disposition of any equity or equity-based awards;
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(3)	Offsetting the recouped amount from any compensation otherwise owed by the Company or its affiliates to the Executive Officer;
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(4)	Cancelling outstanding vested or unvested equity or equity-based awards and/or reducing outstanding future payments due or possibly due in respect of amounts already Received; and/or
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(5)	Taking any other remedial and recovery action permitted by law, as determined by the Committee.
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IX.	Disclosure Requirements
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The Company shall file all disclosures with respect to this Policy in accordance with the requirements of the federal securities laws, including the disclosure required by the rules and applicable filings required to be made with the SEC.

X.	No Indemnification

The Company shall not be permitted to insure or indemnify any Executive Officer against (i) the loss of any Erroneously Awarded Compensation that is repaid, returned or recovered pursuant to the terms of this Policy, or (ii) any claims relating to the Company’s enforcement of its rights under this Policy. Further, the Company shall not enter into any agreement that exempts any Incentive-Based Compensation that is granted, paid or awarded to an Executive Officer from the application of this Policy or that waives the Company’s right to recovery of any Erroneously Awarded Compensation, and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date of this Policy). While an Executive Officer may purchase a third-party insurance policy to fund potential recovery obligations under this Policy, the Company may not pay or reimburse the Executive Officer for premiums for such an insurance policy.

XI.	Effective Date

This Policy shall be effective as of the Exchange Effective Date.

XII.	Amendment; Termination

The Committee and thereafter, the Board, may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to comply with the requirements of any federal securities laws, SEC rule or the rules of any national securities exchange or national securities association on which the Company’s securities are then listed. Notwithstanding anything in this Section XII to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws, SEC rule, or the rules of any national securities exchange or national securities association on which the Company’s securities are then listed.

XIII.	Other Recovery Rights

This Policy will be applied to the fullest extent of the law. The Board and/or the Committee may, to the fullest extent of the law, require that any employment agreement, equity award agreement, or other plan, agreement or arrangement providing for incentive compensation shall, as a condition to the grant, receipt or vesting of any benefit thereunder, require an Executive Officer to agree to abide by the terms of this Policy, including requiring the execution of the attestation and acknowledgement set forth in Exhibit A to this Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity or equity-based plan or award agreement, or other plan, agreement or arrangement providing for incentive compensation and any other legal remedies available to the Company. However, this Policy shall not provide for recovery of Incentive-Based Compensation that the Company has already recovered pursuant to Section 304 of the Sarbanes-Oxley Act or other recovery obligations.

XIV.	Successors

This Policy shall be binding and enforceable against all Executive Officers and their beneficiaries, executors, administrators, permitted transferees, permitted assignees or other legal representatives, and shall inure to the benefit of any successor or assignee of the Company.

Exhibit A

ATTESTATION AND ACKNOWLEDGEMENT OF POLICY REGARDING THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

By my signature below, I acknowledge and agree that:

●	I have received and read the attached Policy Regarding the Recovery of Erroneously Awarded Compensation (this “Policy”).
●	I hereby agree to abide by all of the terms of this Policy both during and after my employment with the Company, including, without limitation, by promptly repaying or returning any Erroneously Awarded Compensation to the Company as determined in accordance with this Policy.
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Signature: ____________________________________
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Printed Name: _________________________________
Date: _________________________________________