Definitions and Interpretation

Definitions In this Guarantee:

Defined terms Unless otherwise specified in this Guarantee, or unless the context otherwise requires, all words and expressions defined or explained in the Loan Agreement shall have the same meanings when used in this Guarantee.

Construction Clause 1.2 of the Loan Agreement (Construction) shall apply to this Guarantee as if it were incorporated into it with any necessary modifications.

Headings Clause and Schedule headings are for ease of reference only.

Third party rights A person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.

Contractual recognition of bail-in If the Guarantor is not a party to the Loan Agreement, the Guarantor agrees to be bound by clause 1.9 of the Loan Agreement (Contractual recognition of bail-in) as if it is a party to the Loan Agreement.

Guarantee and Indemnity

guarantees to the Lender punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents;

undertakes with the Lender that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

agrees with the Lender that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Lender immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Guarantee if the amount claimed had been recoverable on the basis of a guarantee.

Protection of Lender

Continuing Guarantee This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any Intermediate payment or discharge in whole or in part. When the whole of Indebtedness has been paid in full and all the Guarantor’s Liabilities have been paid in full, the Lender will, at the cost of and on the request of Guarantor execute and deliver a discharge of the Guarantor’s Security Documents.

Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by the Lender in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Guarantee will continue or be reinstated as if the discharge, release or arrangement had not occurred.

Waiver of defences The obligations of the Guarantor under this Guarantee will not be affected by an act, omission, matter or thing which, but for this Clause 3.3, would reduce, release or prejudice any of its obligations under this Guarantee (without limitation and whether or not known to it or the Lender) including:

any time, waiver or consent granted to, or composition with, any Obligor or other person;

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any Obligor or any other member of the Group;

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

any insolvency or similar proceedings.

Guarantor intent Without prejudice to the generality of Clause 3.3, the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such

any failure by the Borrower to comply with its obligations under clause 16 of the Loan Agreement (Costs and Expenses);

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

the taking, holding, protection or enforcement of the Security Documents;

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;

any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

acting as holder of any of the Security Documents, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Lender’s, Receiver’s or Delegate’s gross negligence or wilful misconduct),

Currency indemnity If any sum due from the Guarantor under this Guarantee (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

making or filing a claim or proof against the Guarantor, or

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

Amendment costs If the Guarantor requests an amendment, waiver or consent in relation to any Guarantor Security Document, the Guarantor shall, within three Business Days of demand, reimburse the Lender for the amount of all costs and expenses (including legal fees) reasonably incurred by the Lender (and by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement provided that (a) no sum shall be payable under this Clause 4.3 if liability for the same matters also accrues under the Loan Agreement

Requirements as to financial statements

shall be certified by a director of the Guarantor as giving a true and fairview of (in the case of annual consolidated financial statements), or fairly representing (in other cases), Its financial condition as at the date as at which those financial statements were drawn up; and

shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, In relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Lender:

a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and

sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether Clause 8 has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

Information: miscellaneous The Guarantor shall supply to the Lender:

at the same time as they are dispatched, copies of all documents dispatched by the Guarantor or to its creditors generally (or any class of them);

promptly upon becoming aware of them, the details of any litigation,arbitration or administrative proceedings which are current, threatened or pending against any Obligor, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;

promptly, such information as the Lender may reasonably require about theCharged Property and compliance of the Obligors with the terms of any Security Documents including without limitation cash flow analyses and details of the operating costs of the Vessel; and

promptly on request, such further information regarding the financialcondition, affairs, commitments, assets and operations of any Obligor or any other member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under the Loan Agreement and this Guarantee as the Lender may reasonably request.

Notification of default The Guarantor shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

Financial Covenants

Maximum Leverage not higher than 75%;

Liquidity of an amount of not less than $300,000 in respect of each Fleet Vessel; and

Net Worth of not less than fifteen million dollars ($15,000,000)

General Undertakings

No security The Guarantor has not taken, and will not take without the prior written consent of the Lender (and then only on such terms and subject to such conditions as the Lender may impose), any security from any of the other Obligors in connection with this Guarantee, and any security taken by the Guarantor notwithstanding this Clause 9.1 shall be held by the Guarantor in trust for the Lender absolutely as a continuing security for the Guarantor Liabilities.

Loan Agreement undertakings The Guarantor will observe and perform any and all covenants and undertakings in the Loan Agreement whose observance and performance by the Guarantor the Borrower has undertaken to procure.

Authorisations The Guarantor shall promptly:

obtain, comply with and do all that is necessary to maintain in full force and effect; and

supply certified copies to the Lender of,

enable any Obligor to perform its obligations under the Finance Documents to which it is a party;

ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and

enable any Obligor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

Environmental compliance

comply with all Environmental Laws;

obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

Environmental Claims

any Environmental Claim against any of the Obligors or any other member of the Group which is current, pending or threatened; and

any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Obligors or any other member of the Group,

Anti-corruption law

No part of the proceeds of the Loan will be used, directly or indirectly, for any payments that could constitute a violation of any applicable anti-bribery law, including, without limitation the UK Bribery Act, the FCPA or other similar legislation in other jurisdictions.

The Guarantor shall:

conduct its businesses in compliance with applicable anti-corruption laws; and

maintain policies and procedures designed to promote and achieve compliance with such laws.

Negative pledge The Guarantor shall procure that:

the Borrower shall not create nor permit to subsist any Encumbrance over any of its assets; and

it will not create nor permit to subsist any Encumbrance over the shares of the Guarantor in the Borrower.

Payments

Payments to the Lender On each date on which the Guarantor is required to make a payment under any Guarantor Security Document, the Guarantor shall make the same available to the Lender for value on the due date at the time and in such funds as required in the Finance Documents, or, if not specified therein, as specified

No set-off by Guarantor All payments to be made by the Guarantor under any Guarantor Security Document shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

Business Days Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

Currency of payments

Subject to Clauses 10.4.2 and 10.4.3, any amount payable under this Guarantee is payable in dollars.

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

Tax gross-up The clauses of the Loan Agreement numbered 12 (Tax Gross Up and Indemnities) and 15 (Mitigation by the Lender) (in so far as that clause 15 applies to that clause 12) shall apply to this Guarantee as if they were incorporated into it with any necessary modifications.

Set-Off

Calculations and Certificates

Accounts In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender are in the absence of manifest error, prima facie evidence of the matters to which they relate.

Certificates and determinations Any certification or determination by the Lender of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

Partial Invalidity

Remedies and Waivers

Miscellaneous Provisions of the Loan Agreement

Notices

Addresses The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication or document to be made or delivered under or in connection with this Guarantee and any other Guarantor Security Document is:

in the case of the Guarantor,

Address: c/o Eurobulk Ltd,

4 Messogiou & Evropis

Maroussi, Athens, Greece,

Fax no: +30 211 180 4097,

Department/Officer: Legal department; and

in the case of the Lender,

Address: 8 Canada Square,

London E14 SHQ, England

Fax no: +44 (0)20 7991 4619,

Department/Officer: Head of European Corporate Banking Centre/ Alastair Muir

Loan Agreement provisions The clauses of the Loan Agreement numbered 28.1 (Communications in writing), 28.3 (Delivery), 28.4 (Electronic communication) and 28.5 (English language) shall apply to any notice or demand under or in connection with this Guarantee.

Governing Law

Enforcement

Jurisdiction of English courts The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Guarantee (including a dispute relating to the existence, validity or termination of this Guarantee or any non-contractual obligation arising out of or in connection with this Guarantee) (a “Dispute”). The Guarantor agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly it will not argue to the contrary.

Service of process

Without prejudice to any other mode of service allowed under any relevant law, the Guarantor:

irrevocably appoints Hill Dickinson Service (London) Limited of Broadgate Tower, 20 Primrose Street, London EC2A 2E, United Kingdom as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

agrees that failure by a process agent to notify the Guarantor of the process will not invalidate the proceedings concerned.

If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Guarantor must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Lender. Failing this, the Lender may appoint another agent for this purpose.

HSBC Bank plc

Eurodry Ltd.

We refer to the Guarantee. This is a Compliance Certificate. Terms defined in the Guarantee have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

We confirm that we maintain:

Maximum Leverage of not higher than 75%;

Liquidity of an amount of not less than $300,000 per Fleet Vessel; and

Net Worth of not less than $15,000,000.

We confirm that no Default (as defined in the Loan Agreement) is continuing.