EuroDry (EDRY) 20-F2023 FY Annual report (foreign)

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;

THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Agent;

HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Mandated Lead Arranger; and

HAMBURG COMMERCIAL BANK AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany, as Security Trustee.

$14,000,000; and

52.5 per cent. of the Initial Market Value of the Ship,

INTERPRETATION

Definitions

"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:

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

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:

30 June 2023 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower) or

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:

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;

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

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:

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;

the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

"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:

is agreed in writing by the Borrower and the Agent (in its own capacity) and the Agent (acting on the instructions of the Lenders);

specifies the relevant terms which are expressed in this Agreement to be determined by reference to the Benchmark Terms; and

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 day (other than a Saturday or Sunday) on which banks are open for general business:

in New York regarding the fixing of any interest rate which is required to be determined under this Agreement or any Finance Document;

in Hamburg and New York in respect of any payment which is required to be made under a Finance Document; and

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

in relation to:

any date for payment or purchase of dollars; or

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,

"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:

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

any change to the legal ownership of any of the shares in the Borrower; and/or

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:

is agreed in writing by the Borrower and the Agent (in its own capacity) and the Agent (acting on the instructions of the Lenders);

specifies a calculation methodology for that rate; and

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 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

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:

from performing its payment obligations under the Finance Documents; or

from communicating with other Parties or, if applicable, any Security Party in accordance with the terms of the Finance Documents,

"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):

except to the extent that they fall within paragraph (b);

all freight, hire and passage moneys;

compensation payable to the Borrower or the Security Trustee in the event of requisition of the Ship for hire;

remuneration for salvage and towage services;

demurrage and detention moneys;

damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and

all moneys which are at any time payable under any Insurances in respect of loss of hire; and

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:

any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or

any claim by any other person which relates to an Environmental Incident,

"Environmental Incident" means:

any release of Environmentally Sensitive Material from the Ship; or

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

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:

sections 1471 to 1474 of the Code or any associated regulations;

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

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:

this Agreement;

the Agency and Trust Agreement;

any Fee Letter;

the Drawdown Notice;

the Accounts Pledges;

the Corporate Guarantee;

the Mortgage;

the General Assignment;

any Deed of Covenant;

any Charterparty Assignment;

the Approved Manager's Undertaking;

any Benchmark Terms Supplement;

any Compounding Methodology Supplement; and

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:

for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

under any loan stock, bond, note or other security issued by the debtor;

under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

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;

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

under receivables sold or discounted (other than any receivables to the extent that they are sold on a non-recourse basis); or

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:

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

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:

before the Loan is made, Lenders whose Commitments total 66 ^2/3 per cent. of the Total Commitments; and

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:

the business, property, assets, liabilities, operations or condition (financial or otherwise) of the Borrower and/or any Security Party taken as a whole;

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

the validity, legality or enforceability of any Finance Document.

"Maximum Loan Amount" means an amount of up to the lesser of:

$14,000,000; and

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:

liens for unpaid master's and crew's wages in accordance with usual maritime practice;

liens for salvage;

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;

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

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:

any Finance Document;

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;

any other document contemplated by or referred to in any Finance Document; and

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:

England and Wales;

the country under the laws of which the company is incorporated or formed;

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;

a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

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

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:

any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

"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:

formally designated, nominated or recommended as the replacement for the RFR by:

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

any Relevant Nominating Body,

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

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:

listed on, or owned or controlled by a person listed on any Sanctions List;

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

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:

the methodology, formula or other means of determining the RFR has, in the reasonable opinion of the Lenders, materially changed;

the administrator of the RFR or its supervisor publicly announces that such administrator is insolvent; or

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,

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;

the supervisor of the administrator of the RFR publicly announces that the RFR has been or will be permanently or indefinitely discontinued; or

the administrator of the RFR or its supervisor publicly announces that the RFR may no longer be used; or

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:

the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lenders) temporary; or

the RFR is calculated in accordance with any such policy or arrangement for a period which is no less than 10 Additional Business Days.

the Security Council of the United Nations;

the United States;

the United Kingdom;

the European Union;

any member state of the European Union;

any country to which any Security Party or the Borrower or any affiliate of any of them is bound; or

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")

"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:

the Market Value of the Ship; and

the net realisable value of any additional security provided at that time under Clause 15 (Security Cover),

"Security Interest" means:

a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

the rights of a plaintiff under an action in rem; and

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:

all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

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

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:

actual, constructive, compromised, agreed or arranged total loss of the Ship;

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;

any condemnation of the Ship by any tribunal or by any person or person claiming to be a tribunal; and

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:

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;

in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earlier of:

the date on which a notice of abandonment is given to the insurers; and

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

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 person which is resident for tax purposes in the US; or

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:

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;

in relation to any other applicable Bail-In Legislation other than the UK Bail In Legislation:

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

any similar or analogous powers under that Bail-In Legislation; and

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.

Construction of certain terms

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);

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;

a reference to a page or screen of an information service displaying a rate shall include:

any replacement page of that information service which displays that rate; and

the appropriate page of such other information service which displays that rate from time to time in place of that information service,

a reference to a "Central Bank Rate" shall include any successor rate to, or replacement rate for, that rate;

any Benchmark Terms Supplement overrides anything in:

Schedule 7 (Benchmark Terms); or

any earlier Benchmark Terms Supplement; and

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:

Schedule 8 (Daily Non-Cumulative Compounded RFR Rate) or Schedule 9 (Cumulative Compounded RFR Rate), as the case may be; or

any earlier Compounding Methodology Supplement.

Meaning of "month"

other than where paragraph (b) below applies:

(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;

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

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

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.

Meaning of "subsidiary"

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

P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

P has the direct or indirect power to appoint or remove a majority of the directors of S; or

P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

General Interpretation

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;

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;

words denoting the singular number shall include the plural and vice versa;

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

Clauses 1.1 (Definitions) to 1.5 (General Interpretation) apply unless the contrary intention appears.

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.

Headings

FACILITY

Amount of facility

Lenders' participations in the Loan

Purpose of Loan

POSITION OF THE LENDERS

Interests several

Individual right of action

Proceedings requiring Majority Lender consent

Obligations several

the obligations of the other Lenders being increased; nor

the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;

DRAWDOWN

Request for the Loan

Availability

the Drawdown Date has to be a Business Day during the Availability Period;

the amount of the Loan shall not exceed the Maximum Loan Amount;

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

the amount of the Loan shall not exceed the Total Commitments.

Notification to Lenders of receipt of a Drawdown Notice

the amount of the Loan and the Drawdown Date;

the amount of that Lender's participation in the Loan; and

the duration of the first Interest Period.

Drawdown Notice irrevocable

Lenders to make available Contributions

Disbursement of the Loan

to the account which the Borrower specifies in the Drawdown Notice; and

in like funds as the Agent received the payments from the Lenders.

INTEREST

Payment of normal interest

Normal rate of interest

the Margin; and

the Compounded Reference Rate for that day.

Payment of accrued interest

Notifications

The Agent shall promptly upon an Interest Payment being determinable notify:

the Borrower of that Interest Payment;

each Lender of the proportion of that Interest Payment which relates to that Lender's participation in the relevant part of the Loan; and

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.

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.

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 (Cost of funds) applies.

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.

No Interest Period for the Loan or any part of the Loan shall be longer than three Months.

Interest calculation if no RFR or Central Bank Rate

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

"Cost of funds will apply as a fallback" is specified in the Benchmark Terms,  

Market disruption

a Market Disruption Rate is specified in the Benchmark Terms; and

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,

Cost of funds

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:

the Margin; and

the rate notified to the Agent by each Lender as soon as practicable and in any event by the Reporting Time,

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.

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.

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.

If this Clause 5.7 (Cost of funds) applies pursuant to Clause 5.6 (Market disruption) and:

a Lender's rate notified pursuant to sub-paragraph (ii) of paragraph (a) above is less than the relevant Cumulative Compounded RFR Rate; or

a Lender does not notify a rate to the Agent by the time specified in sub-paragraph (ii) of paragraph (a) above,

If this Clause 5.7 (Cost of funds) applies, the Agent shall, as soon as practicable, notify the Borrower.

Notice of prepayment

Prepayment; termination of Commitments

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

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.

Application of prepayment

INTEREST PERIODS

Commencement of Interest Periods

Duration of normal Interest Periods

Duration of Interest Periods for Instalments

Non-availability of matching deposits for Interest Period selected

DEFAULT INTEREST

Payment of default interest on overdue amounts

the date on which the Finance Documents provide that such amount is due for payment; or

if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

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

its failure to pay is caused by administrative or technical error or a Disruption Event; and

payment is made within three calendar days.

Default rate of interest

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

in the case of any other overdue amount, the rate set out at Clause 7.3(b) (Calculation of default rate of interest).

Calculation of default rate of interest

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);

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)).

Notification of Interest Periods and default rates

Payment of accrued default interest

Compounding of default interest

REPAYMENT AND PREPAYMENT

Amount of Instalments

16 equal consecutive quarterly instalments, each in the amount of $240,000 (each an "Instalment" and, together, the "Instalments"); and

a balloon instalment in an amount equal to $10,160,000 (the "Balloon Instalment");

Repayment Dates

Final Repayment Date

Voluntary prepayment

Conditions for voluntary prepayment

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;

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;

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

the Borrower is in compliance with Clause 8.10 (Amounts payable on prepayment) on or prior to the date of prepayment.

Optional facility cancellation

Cancellation Notice or Prepayment Notice

Mandatory prepayment

is sold, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or

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.

Effect of Prepayment Notice and Cancellation Notice

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

in the case of a Cancellation Notice, the amount cancelled shall be permanently cancelled and may not be borrowed.

Amounts payable on prepayment

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.

Any accrued interest on the amount prepaid shall be paid:

in case of partial prepayment of the Loan, on the last day of the then current Interest Period; and

in case of full prepayment of the Loan,  on the date of such prepayment.

Application of partial prepayment or cancellation

No reborrowing

CONDITIONS PRECEDENT

Documents, fees and no default

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;

that, on the Drawdown Date but prior to the making of the Loan, the Agent receives;

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

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;

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:

no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan;

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;

none of the circumstances contemplated by Clause 5.6 (Market disruption) has occurred and is continuing; and

there has been no Material Adverse Change; and

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

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.

Waiver of conditions precedent

Conditions subsequent

REPRESENTATIONS AND WARRANTIES

General

Status

Share capital and ownership

Corporate power

to execute the Underlying Documents which it is a party and to maintain its Ship registered in its ownership under the applicable Approved Flag;

to execute the Finance Documents to which it is a party; and

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.

Consents in force

Legal validity; effective Security Interests

constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and

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,

No third party Security Interests

the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

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.

No conflicts

will not involve or lead to a contravention of:

any law or regulation; or

the constitutional documents of the Borrower or any Security Party; or

any contractual or other obligation or restriction which is binding on the Borrower or any Security Party or any of its assets, and

will not have a Material Adverse Effect; and

is for the corporate benefit of the Borrower or the relevant Security Party.

No withholding taxes

No default

Information

No litigation

Validity and completeness of the Underlying Documents

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

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.

Compliance with certain undertakings

Taxes paid

ISM Code and ISPS Code compliance

No Money laundering

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.

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).

No immunity

Choice of law

Pari passu ranking

Sanctions

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:

is a Restricted Party;

has been engaged in any transaction, activity or conduct that could reasonably be expected to result in its becoming a Restricted Party;

has or intends to have any business operations or other dealings:

in any Sanctioned Country which may result in a violation of any Sanctions applicable to it; or

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;

has received notice of, or is otherwise aware of, any claim, action, suit, proceedings or investigation involving it with respect to Sanctions; and/or

is acting on behalf of or at the direction of any Restricted Party.

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.

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.

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.

Repetition

on the date of service of the Drawdown Notice;

on the Drawdown Date; and

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.

GENERAL UNDERTAKINGS

General

Title and negative pledge

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

not create or permit to arise any Security Interest (except for Permitted Liens) over any other asset, present or future.

No disposal of assets

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

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,

any charter of the Ship; and

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.

No other liabilities or obligations to be incurred

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

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.

Information provided to be accurate

Provision of financial statements

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

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

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.

Form of financial statements

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;

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

fully disclose or provide for all significant liabilities of the Corporate Guarantor and any of their subsidiaries.

Shareholder and creditor notices

Consents

for the Borrower to perform its obligations under any Finance Document or any Underlying Document to which it is a party;

for the validity or enforceability of any Finance Document or any Underlying Document to which it is a party;

for the Borrower to continue to own and operate the Ship,

Maintenance of Security Interests

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

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.

Notification of litigation

No amendment to Underlying Documents

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;

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).

Principal place of business

Confirmation of no default

states that no Event of Default or Potential Event of Default has occurred and is continuing; or

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.

Notification of default

the occurrence of an Event of Default or a Potential Event of Default and is continuing; or

any matter which indicates that an Event of Default or a Potential Event of Default may have occurred and is continuing,

Provision of further information

to the Borrower, the Ship, the Earnings or the Insurances; or

to any other matter relevant to, or to any provision of, a Finance Document,

Provision of copies and translation of documents

"Know your customer" checks

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;

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

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,

Minimum Liquidity and Additional Minimum Liquidity

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

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: 

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:

the Borrower has repaid in full the first four Instalments; and

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

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:

the Borrower has repaid in full the first eight Instalments; and

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.

Dry Docking Reserve Amount

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.

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 Ship Provided 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.

Compliance Certificate

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).

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).

No Money laundering

The Borrower:

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

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.

The Borrower:

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

will promptly inform the Agent by written notice, if it is not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary.

The Agent shall promptly notify the Lenders of any written notice it receives under sub-paragraph (b)(ii) above.

Sanctions

The Borrower undertakes that it will not, directly or indirectly,

engage in any activities in conflict with or in violation of any Sanctions and, in particular,

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;

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

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.

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.

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.

CORPORATE UNDERTAKINGS

General

Maintenance of status

Negative undertakings

change the nature of its business or carry on any type of business other than the ownership, chartering and operation of the Ship;

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;

provide any form of credit or financial assistance to:

a person who is directly or indirectly interested in the Borrower's share or loan capital; or

any company in or with which such a person is directly or indirectly interested or connected,

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;

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);

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;

enter into any form of amalgamation, merger or de-merger, acquisition, divestiture, split-up or any form of reconstruction or reorganisation; or

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.

Subsidiaries

INSURANCE

General

Maintenance of obligatory insurances

fire and usual marine risks (including hull and machinery and excess risks);

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);

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

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.

Terms of obligatory insurances

in Dollars;

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:

an amount which is equal to 120 per cent. of the aggregate of:

the Loan; and

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

the Market Value of the Ship;

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);

in relation to protection and indemnity risks in respect of the full value and tonnage of the Ship;

in relation to war risks insurance, extended to cover piracy and terrorism where excluded under the fire and usual marine risks insurance;

on approved terms and conditions; and

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.

Further protections for the Creditor Parties

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;