Dated 2009
 ADVENTURE FIVE S.A.
    
    
    (1
    )in favour ofCREDIT SUISSE AG
    
    
    (2
    )(formerly known as CREDIT SUISSE)
 
 FIRST PREFERRED LIBERIAN
SHIP MORTGAGE on
m.v. Free Goddess
GRANTED IN CONTINUATION OF PRIOR MORTGAGE




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Contents
 Clause
    
    Page1 Definitions
    
    
    22 Grant, conveyance and mortgage
    
    
    63 Covenants to pay and perform
    
    
    64 Continuing security and other matters
    
    
    65 Covenants
    
    
    76 Powers of Mortgagee to protect security and remedy defaults
    
    
    147 Powers of Mortgagee on Event of Default
    
    
    158 Application of moneys
    
    
    169 Remedies cumulative and other provisions
    
    
    1610 Costs and indemnity
    
    
    1711 Attorney
    
    
    1712 Further assurance
    
    
    1813 Total amount and maturity
    
    
    1814 Law, jurisdiction and other provisions
    
    
    1815 Other provisions
    
    
    1916 Notices
    
    
    19Schedule 1 The Principal Agreement
    
    
    21Schedule 2 The Second and Third Supplemental Agreements
    
    
    22Schedule 3 The Master Swap Agreement
    
    
    23Schedule 4 The Corporate Guarantee
    
    
    24Schedule 5 The Prior Mortgage
    
    
    25




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THIS FIRST PREFERRED SHIP MORTGAGE
 BY:
 (1)
    
    ADVENTURE FIVE S.A., a company incorporated under the laws of the Republic of Marshall
Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH96960 and qualified as a Foreign Maritime Entity in the Republic of
Liberia (the Owner) in favour of(2)
    
    CREDIT SUISSE AG(formerly known as CREDIT SUISSE) of Paradeplatz 8, 8070 Zurich, Switzerland
(the Mortgagee).
 WHEREAS
 (A)
    
    the Owner is the sole, absolute and unencumbered, legal and beneficial owner of the whole of
m.v. Free Goddessdocumented under the laws and flag of the Republic of Liberia, Official
Number 14519 of 13,695 gross tons and 7,710 net tons;(B)
    
    by a facility agreement dated 24 December 2007 (the Original Agreement) and made between
(i) FreeSeas Inc. (therein and herein referred to as the Borrower) as borrower and (ii) the
Mortgagee as lender (therein referred to as the Bank) as amended and restated by a
supplemental agreement dated 26 June 2008 made between (inter alios) the Borrower, the Owner
and the Mortgagee (the First Supplemental Agreement and, together with the Original
Agreement the Principal Agreement) (a copy of the form of which Principal Agreement without
its schedules is annexed hereto as schedule 1 and forms an integral part hereof) and as
further amended and supplemented by a supplemental agreement dated 23 March 2009 made between
(inter alios) the Borrower, the Owner and the Mortgagee (the Second Supplemental Agreement)
and a supplemental agreement dated 27 November 2009 (the Third Supplemental Agreement and
together with the Principal Agreement and the Second Supplemental Agreement, the Loan
Agreement) (an executed copy of which Second Supplemental Agreement and a copy of the form of
which Third Supplemental Agreement without their schedules are annexed hereto as schedule 2
and forms an integral part hereof), the Mortgagee agreed (inter alia) to make available to the
Borrower, upon the terms and conditions therein contained, a reducing revolving credit
facility of up to Ninety one million Dollars ($91,000,000);(C)
    
    by a 2002 ISDA master swap agreement dated as of 24 December 2007 (the Master Swap
Agreement) and made between the Borrower and the Mortgagee (a copy of the form of which
Master Swap Agreement with its Schedule is annexed hereto as schedule 3 and forms an integral
part hereof), the Mortgagee agreed the terms and conditions upon which it would enter into
(inter alia) derivative transactions with the Borrower, whether in respect of the Loan
(whether in whole or in part, as the case may be, from time to time) or for any other purpose
whatsoever. The Owner has agreed pursuant to this Mortgage to secure the debts and obligations
arising or that may arise in favour of the Mortgagee under the Master Swap Agreement and the
Owner and the Mortgagee agree for the purpose of this Mortgage that the maximum amount of such
obligations to be secured by this Mortgage shall be Eighteen million two hundred thousand
Dollars ($18,200,000) (the Swap Obligations);(D)
    
    pursuant to the said Loan Agreement, the Mortgagee as of the date hereof has advanced or has
agreed to advance to the Borrower (and the Borrower is indebted to the Mortgagee in) a total
principal amount of up to Ninety one million Dollars ($91,000,000) which (together with
interest (as provided in clause 3.1 of the said Loan Agreement) thereon and fees) is to be
repaid and paid, as the case may be, as provided in the Loan Agreement;(E)
    
    by a corporate guarantee (the Corporate Guarantee) dated 28 December 2007 and executed by
the Owner (therein referred to as the Guarantor) in favour of the Mortgagee (a copy of the
form of which Corporate Guarantee is annexed hereto as schedule 4 and forms an integral part
hereof), the Owner (inter alia) guaranteed the payment of any moneys owing by
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the Borrower to the Mortgagee under the Loan Agreement, the Master Swap Agreement and the other Security Documents;(F)
    
    prior to the date hereof, the Ship was registered in the Marshall Islands (the Prior
Registry) in the ownership of the Owner with Official No. 3030, I.M.O. No. 9107045 and with
International Call Sign V7NW4 and the Owners obligation to repay the Outstanding Indebtedness
was secured by, among other instruments, a first preferred Marshall Islands ship mortgage
dated 28 December 2007 made by the Owner in favour of the Mortgagee and recorded on 28
December 2007 (the First Recording Date) with the Office of the Maritime Administrator of
the Marshall Islands (Book PM 18 at Page 1143), as amended by an amendment No. 1 dated 4 July
2008 made by the Owner in favour of the Mortgagee and recorded on 4 July 2008 with the Office
of the Maritime Administrator of the Marshall Islands (Book PM 19 at Page 531) and an
amendment No. 2 dated 2 April 2009 made by the Owner in favour of the Mortgagee and recorded
on 2 April 2009 with the Office of the Maritime Administrator of the Marshall Islands (Book PM
20 at page 215) (together the Prior Mortgage). A copy of the Prior Mortgage, together with a
copy of a Certificate of Ownership and Encumbrance issued by the Registrar of Marshall Islands
Ships on 2 April 2009 are annexed hereto as schedule 5;(G)
    
    pursuant to the Third Supplemental Agreement, the Mortgagee consented to the deletion of the
Ship from the Marshall Islands registry and the registration of the Ship under the laws and
flag of Liberia on condition that, inter alia, the Owner executes and records this Mortgage on
the Ship for the purpose of securing the repayment of the said principal amount and interest
thereon, costs, expenses of collection and all other sums of money from time to time owing to
the Mortgagee under the said Corporate Guarantee and the performance and observance of and
compliance with all of the covenants, terms and conditions in this Mortgage, the Corporate
Guarantee, the Loan Agreement, the Master Swap Agreement, the Prior Mortgage and the other
Security Documents, in continuation of the Prior Mortgage, and with preferred status as of the
First Recording Date as provided under Section 101 of Title 21 of the Liberian Code of Laws
Revised as amended; and(H)
    
    this Mortgage is the Mortgage in respect of the Ship referred to in the Loan Agreement.
 NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED
 1 Definitions
 1.1
    
    Defined expressionsWords and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall,
unless the context otherwise requires or unless otherwise defined herein, have the same
meanings when used in this Mortgage.1.2
    
    DefinitionsIn this Mortgage unless the context otherwise requires:Approved Brokers means such firm or firms of insurance brokers, appointed by the Owner, as
may from time to time be approved in writing by the Mortgagee for the purposes of this
Mortgage;Casualty Amount means Two hundred and fifty thousand Dollars ($250,000) (or the equivalent
in any other currency);Collateral Instruments means notes, bills of exchange, certificates of deposit and other
negotiable and non-negotiable instruments, guarantees, indemnities and other assurances
against financial loss and any other documents or instruments which contain or evidence an
obligation (with or without security) to pay, discharge or be responsible directly or
indirectly for, any indebtedness or liabilities of the Owner or any other person liable and
includes any
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documents or instruments creating or evidencing a mortgage, charge (whether
fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security
interest of any kind;Earnings means all moneys whatsoever from time to time due or payable to the Owner during
the Security Period arising out of the use or operation of the Ship including (but without
limiting the generality of the foregoing) all freight, hire and passage moneys, income
arising under pooling arrangements, compensation payable to the Owner in the event of
requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and
detention moneys, and damages for breach (or payments for variation or termination) of any
charterparty or other contract for the employment of the Ship;Event of Default means any of the events or circumstances described in clause 10.1 of the
Loan Agreement;Expenses means the aggregate at any relevant time (to the extent that the same have not
been received or recovered by the Mortgagee) of:
 (a)
    
    all losses, liabilities, costs, charges, expenses, damages and outgoings of
whatever nature, (including, without limitation, Taxes, repair costs, registration fees
and insurance premiums) suffered, incurred or paid by the Mortgagee in connection with
the exercise of the powers referred to in or granted by the Corporate Guarantee, the
Loan Agreement, the Master Swap Agreement, this Mortgage, the General Assignment or any
other of the Security Documents or otherwise payable by the Owner in accordance with
clause 10 of this Mortgage or clause 8 of the General Assignment; and(b)
    
    interest on all such losses, liabilities, costs, charges, expenses, damages and
outgoings from the date on which the same were suffered, incurred or paid by the
Mortgagee until the date of receipt or recovery thereof (whether before or after
judgement) at a rate per annum calculated in accordance with clause 2.5 of the Corporate
Guarantee (as conclusively certified by the Mortgagee);
 General Assignment means a deed of assignment dated 28 December 2007 as amended by a
supplemental agreement dated 27 November 2009 made between the Owner and the Mortgagee
whereby the Owner has assigned to the Mortgagee the Insurances, any Requisition Compensation
and the Earnings of the Ship;Guaranteed Liabilities shall have the meaning ascribed thereto in the Corporate Guarantee;Insurances means all policies and contracts of insurance (which expression includes all
entries of the Ship in a protection and indemnity or war risks association) which are from
time to time during the Security Period in place or taken out or entered into by or for the
benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the
Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise
howsoever in connection with the Ship and all benefits thereof (including claims of
whatsoever nature and returns of premia);Loan means the total principal amount of up to Ninety one million Dollars ($91,000,000)
referred to in recital (B) hereto advanced by the Mortgagee to the Borrower pursuant to the
Loan Agreement or (as the context may require) the amount thereof at any time advanced and
outstanding;Loan Agreement means, together, the agreement dated 24 December 2007 as amended and
restated by the First Supplemental Agreement, as further amended by the Second Supplemental
Agreement and the Third Supplemental Agreement, each mentioned in recital (B) hereto and as
may be further amended and supplemented from time to time;Loss Payable Clauses means the provisions regulating the manner of payment of sums
receivable under the Insurances which are to be incorporated in the relevant insurance
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documents, such provisions to be in the forms set out in schedule 1 to the General Assignment
or in such other form as may from time to time be required or agreed in writing by the
Mortgagee;Master Swap Agreement means the 2002 ISDA Master Agreement dated as of 24 December 2007
made between the Mortgagee and the Borrower mentioned in recital (C) hereto, comprising an
ISDA Master Agreement (and a Schedule thereto), together with any Confirmations (as defined
therein) supplemental thereto;Master Swap Agreement Liabilities means, at any relevant time, all liabilities, actual or
contingent, present or future, owing by the Borrower to the Mortgagee under the Master Swap
Agreement;Mortgagee includes the successors in title and the Assignees and/or Transferees of the
Mortgagee;Notice of Assignment of Insurances means a notice of assignment in the form set out in
schedule 2 to the General Assignment or in such other form as may from time to time be
required or agreed in writing by the Mortgagee;Outstanding Indebtedness means the aggregate of the Guaranteed Liabilities and interest
accrued and accruing thereon, the Master Swap Agreement Liabilities up to the maximum amount
of Eighteen million two hundred thousand Dollars ($18,200,000), the Expenses and all other
sums of money from time to time owing to the Mortgagee whether actually or contingently,
under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement and the other
Security Documents or any of them;Owner includes the successors in title of the Owner;Requisition Compensation means all moneys or other compensation from time to time payable
during the Security Period by reason of the Compulsory Acquisition of the Ship;Security Documents means the Corporate Guarantee, the Loan Agreement, the Master Swap
Agreement, this Mortgage, the General Assignment and any other such document as is defined in
the Loan Agreement as a Security Document or as may have been or may hereafter be executed to
guarantee and/or secure all or any part of the Guaranteed Liabilities, the Master Swap
Agreement Liabilities, the Loan, interest thereon and other moneys from time to time owing by
the Owner and/or any other Security Party pursuant to the Corporate Guarantee and/or any
other Security Document (whether or not any such document also secures moneys from time to
time owing pursuant to any other document or agreement);Security Period means the period commencing on the date hereof and terminating upon
discharge of the security created by the Security Documents by payment of all moneys payable
thereunder;Ship means the vessel described in Recital (A) hereto and includes any interest therein and
her engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel, consumable or
other stores, belongings and appurtenances whether on board or ashore and whether now owned
or hereafter acquired and also any and all additions, improvements and replacements hereafter
made in or to such vessel or any part thereof or in or to her equipment and appurtenances
aforesaid;Total Loss means:
 (a)
    
    the actual, constructive, compromised or arranged total loss of the Ship; or(b)
    
    the Compulsory Acquisition of the Ship; or
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(c)
    
    the hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of the Ship (other than where the same amounts to the Compulsory
Acquisition of the Ship) by any Government Entity or by persons acting or purporting to
act on behalf of any Government Entity unless the Ship be released and restored to the
Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation within thirty (30) days after the occurrence thereof.
 1.3
    
    Insurance termsIn clause 5.1.1:1.3.1
    
    excess risks means the proportion (if any) of claims for general average, salvage and
salvage charges and under the ordinary collision clause not recoverable in consequence of the
value at which a vessel is assessed for the purpose of such claims exceeding her insured
value;1.3.2
    
    protection and indemnity risks means the usual risks (including oil pollution and freight,
demurrage and defence cover) covered by a protection and indemnity association which is a
member of the International Group of P&I Clubs (including, without limitation, the proportion
(if any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation therein of
Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down
Clause (1/10/71) or any equivalent provision; and1.3.3
    
    war risks includes those risks covered by the standard form of English marine policy with
Institute War and Strikes Clauses Hulls-Time (1/11/95) attached or similar cover.1.4
    
    HeadingsClause headings and the table of contents are inserted for convenience of reference only and
shall be ignored in the interpretation of this Mortgage.1.5
    
    Construction of certain termsIn this Mortgage, unless the context otherwise requires:1.5.1
    
    references to clauses and schedules are to be construed as references to clauses of, and
schedules to, this Mortgage and references to this Mortgage include its schedules;1.5.2
    
    references to (or to any specified provision of) this Mortgage or any other documents shall
be construed as references to this Mortgage, that provision or that document as in force for
the time being and as amended in accordance with the terms thereof or, as the case may be,
with the agreement of the relevant parties;1.5.3
    
    words importing the plural shall include the singular and vice versa;1.5.4
    
    references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;1.5.5
    
    references to a guarantee include references to an indemnity or other assurance against
financial loss including, without limitation, an obligation to purchase assets or services as
a consequence of a default by any other person to pay any Indebtedness and guaranteed shall
be construed accordingly; and1.5.6
    
    references to statutory provisions shall be construed as references to those provisions as
replaced or amended or re-enacted from time to time.
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2 Grant, conveyance and mortgage
 For good and valuable consideration (receipt of which is hereby acknowledged by the
Owner) and, pursuant to the Corporate Guarantee and in order to secure the repayment of the
Outstanding Indebtedness and to secure the performance and observance of and compliance with
the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the
Loan Agreement and the Master Swap Agreement, express or implied, the Owner has granted,
conveyed and mortgaged and does by these presents grant, convey and mortgage unto the
Mortgagee, the whole of the Ship TO HAVE AND TO HOLD the same unto the Mortgagee forever,
upon the terms herein set forth, for the enforcement of the payment of the
Outstanding Indebtedness and to secure the performance and observance of and compliance with
the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee, the
Loan Agreement and the Master Swap Agreement, express or implied.PROVIDED ONLY, and the condition of these presents is such that, if the Owner shall pay or
cause to be repaid to the Mortgagee, the Outstanding Indebtedness as and when the same shall
become due and payable in accordance with the terms of the Corporate Guarantee and this
Mortgage and shall observe and comply with the covenants, terms and conditions contained in
the Corporate Guarantee and this Mortgage, expressed or implied, to be performed, observed or
complied with, by and on the part of the Owner, then these presents and the rights hereunder
shall cease, determine and be void, otherwise to be and remain in full force and effect.IT IS NOT INTENDED that this Mortgage shall cover, and this Mortgage shall not cover,
property other than the Ship as the term Vessel is used in Sub-division 1 of Section 106 of
Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended).
 3 Covenants to pay and perform
 3.1
    
    For the consideration aforesaid the Owner hereby covenants with the Mortgagee as follows:3.1.1
    
    the Owner will pay to the Mortgagee any sums payable by the Owner pursuant to the Corporate
Guarantee at the times and in the manner specified in the Corporate Guarantee;3.1.2
    
    the Owner will pay to the Mortgagee interest on any such sums and overdue interest or other
moneys payable under the Corporate Guarantee at the rates, at the times and in the manner
specified in the Corporate Guarantee;3.1.3
    
    the Owner will pay all other moneys comprising the Outstanding Indebtedness as and when the
same shall become due and payable in accordance with the terms of the Corporate Guarantee and
this Mortgage;3.1.4
    
    the Owner will pay interest at a rate per annum calculated in accordance with clause 2.5 of
the Corporate Guarantee (as conclusively certified by the Mortgagee) on any moneys which are
by this Mortgage expressed to be payable on demand and which are not paid forthwith on demand
being made as from the date of demand until payment (both before and after any judgment)
provided however that this provision shall not affect the right of the Mortgagee to receive
that part of its Expenses as comprises interest from such date prior to demand being made as
is referred to in the definition of Expenses; and3.1.5
    
    the Owner will keep, perform and observe the covenants and provisions of the Corporate Guarantee.
 4 Continuing security and other matters
 4.1
    
    Continuing securityThe security created by this Mortgage shall:
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4.1.1
    
    be held by the Mortgagee as a continuing security for the payment of the Outstanding
Indebtedness and the performance and observance of and compliance with all of the covenants,
terms and conditions contained in the Corporate Guarantee, the Loan Agreement, the Master Swap
Agreement or this Mortgage, express or implied, and the security so created shall not be
satisfied by any intermediate payment or satisfaction of any part of the amount hereby and
thereby secured (or by any settlement of accounts between the Owner or any other person who
may be liable to the Mortgagee in respect of the Outstanding Indebtedness or any part thereof
and the Mortgagee;4.1.2
    
    be in addition to, and shall not in any way prejudice or affect, and may be enforced by the
Mortgagee without prior recourse to, the security created by any other of the Security
Documents or by any present or future Collateral Instruments, right or remedy held by or
available to the Mortgagee or any right or remedy of the Mortgagee thereunder; and4.1.3
    
    not be in any way prejudiced or affected by the existence of any of the other Security
Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly
or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee
dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving
time for payment or performance or indulgence or compounding with any other person liable.4.2
    
    Rights additionalAll the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to
and not a limitation of any and every other right, power or remedy vested in the Mortgagee
under the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage,
the other Security Documents or any Collateral Instrument or at law and all the rights,
powers and remedies so vested in the Mortgagee may be exercised from time to time and as
often as the Mortgagee may deem expedient.4.3
    
    No enquiryThe Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any
payment received by it under this Mortgage or to make any claim or take any action to collect
any moneys or to enforce any rights or benefits to which the Mortgagee may at any time be
entitled under this Mortgage.4.4
    
    Waiver of rightsThe Owner hereby waives any rights under the provisions of the laws of a given country which
require the Mortgagee to levy execution against the Owner or make any demand or claim against
the Owner prior to the enforcement of rights under this Mortgage.5
    
    Covenants5.1
    
    The Owner further covenants with the Mortgagee and undertakes throughout the Security
Period:5.1.1
    
    Insurance
 (a)
    
    Insured risks, amounts and termsto insure and keep the Ship insured free of cost and expense to the Mortgagee and in
the sole name of the Owner or, if so required by the Mortgagee, in the joint names of
the Owner and the Mortgagee (but without liability on the part of the Mortgagee for
premiums or calls and to procure that no other assured shall be additionally named
without the prior written consent of the Mortgagee):
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(i)
    
    against fire and usual marine risks (including excess risks) and
war risks, on an agreed value basis, in such amounts (but not in any event less
than whichever shall be the greater of (A) the market value of the Ship for the
time being (as determined by the Mortgagee pursuant to clause 8.2 of the Loan
Agreement) and (B) of an amount which, when aggregated with the equivalent
insurance for all other Mortgaged Ships, shall be equal to at least one hundred
and twenty per cent (120%) of (1) the Loan and (2) the Swap Exposure) and upon
such terms as shall from time to time be approved in writing by the Mortgagee;(ii)
    
    against protection and indemnity risks (including pollution risks
for the highest amount in respect of which cover is or may become available for
ships of the same type, size, age and flag as the Ship) for the full value and
tonnage of the Ship (as approved in writing by the Mortgagee) and upon such
terms as shall from time to time be approved in writing by the Mortgagee; and(iii)
    
    in respect of such other matters of whatsoever nature and
howsoever arising in respect of which insurance would be maintained by a prudent
owner of the Ship,
 and to pay to the Mortgagee the cost (as conclusively certified by the Mortgagee) of
(aa) any mortgagees interest insurance (MII) (including, if the Mortgagee shall so
require, mortgagees additional perils (including all P&I risks) coverage (MAP))
which the Mortgagee may from time to time effect in respect of the Ship upon such
terms and in such amounts (not exceeding one hundred and ten per cent (110%) (in
respect of MII) and one hundred and ten per cent (110%) (in respect of MAP), in each
case, of (1) the Loan and (2) the Swap Exposure) as it shall deem desirable; and (bb)
any other insurance cover which the Mortgagee may from time to time effect in respect
of the Ship and/or in respect of its interest and potential third party liability as
mortgagee of the Ship as the Mortgagee shall deem desirable having regard to any
limitations in respect of amount or extent of cover which may from time to time be
applicable to any of the other insurances referred to in this clause 5.1.1(a);(b)
    
    Approved brokers, insurers and associationsto effect the insurances aforesaid in such currency as the Mortgagee may approve and
through the Approved Brokers (other than the said mortgagee interest insurance which
shall be effected through brokers appointed by the Mortgagee) and with such insurance
companies and/or underwriters having a Standard & Poor rating of at least BBB or a
comparable rating of another comparable rating agency as shall from time to time be
approved in writing by the Mortgagee; provided however that the insurances against
war risks and protection and indemnity risks may be effected by the entry of the Ship
with such war risks and protection and indemnity associations as shall from time to
time be approved in writing by the Mortgagee;(c)
    
    Fleet liens, set-off and cancellationif any of the insurances referred to in clause 5.1.1(a) form part of a fleet cover,
to procure that the Approved Brokers shall undertake to the Mortgagee that they shall
neither set off against any claims in respect of the Ship any premiums due in respect
of other vessels under such fleet cover or any premiums due for other insurances, nor
cancel the insurance for reason of non-payment of premiums for other vessels under
such fleet cover or of premiums for such other insurances, and shall undertake to
issue a separate policy in respect of the Ship if and when so requested by the
Mortgagee;(d)
    
    Payment of premiums and callspunctually to pay all premiums, calls, contributions or other sums payable in respect
of all such insurances and to produce all relevant receipts or other evidence of
payment when so required by the Mortgagee;
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(e)
    
    Renewalat least fourteen (14) days before the relevant policies, contracts or entries
expire, to notify the Mortgagee of the names of the brokers and/or the war risks and
protection and indemnity associations proposed to be employed by the Owner or any
other party for the purposes of the renewal of such insurances and of the amounts in
which such insurances are proposed to be renewed and the risks to be covered and,
subject to compliance with any requirements of the Mortgagee pursuant to this
clause 5.1.1, to procure that appropriate instructions for the renewal of such
Insurances on the terms so specified are given to the Approved Brokers and/or to the
approved war risks and protection and indemnity associations at least ten (10) days
before the relevant policies, contracts or entries expire, and that the Approved
Brokers and/or the approved war risks and protection and indemnity associations will
at least seven (7) days before such expiry (or within such shorter period as the
Mortgagee may from time to time agree) confirm in writing to the Mortgagee as and
when such renewals have been effected in accordance with the instructions so given;(f)
    
    Guaranteesto arrange for the execution and delivery of such guarantees or indemnities as may
from time to time be required by any protection and indemnity or war risks
association;(g)
    
    Hull policy documents, notices, loss payable clauses and brokers
undertakingsto deposit with the Approved Brokers (or procure the deposit of) all slips, cover
notes, policies, certificates of entry or other instruments of insurance from time to
time issued in connection with such of the insurances referred to in clause 5.1.1(a)
as are effected through the Approved Brokers and procure that the interest of the
Mortgagee shall be endorsed thereon by incorporation of the relevant Loss Payable
Clause and, where the Insurances have been assigned to the Mortgagee, by means of a
Notice of Assignment of Insurances (signed by the Owner and by any other assured who
shall have assigned its interest in the Insurances to the Mortgagee) and that the
Mortgagee shall be furnished with pro forma copies thereof and a letter or letters of
undertaking from the Approved Brokers in such form as shall from time to time be
required by the Mortgagee;(h)
    
    Associations loss payable clauses, undertakings and certificatesto procure that any protection and indemnity and/or war risks associations in which
the Ship is for the time being entered shall endorse the relevant Loss Payable
Clause on the relevant certificate of entry or policy and shall furnish the Mortgagee
with a copy of such certificate of entry or policy and a letter or letters of
undertaking in such form as may from time to time be required by the Mortgagee;(i)
    
    Extent of cover and exclusionsto take all necessary action and comply with all requirements which may from time to
time be applicable to the Insurances (including, without limitation, the making of
all requisite declarations within any prescribed time limits and the payment of any
additional premiums or calls) so as to ensure that the Insurances are not made
subject to any exclusions or qualifications to which the Mortgagee has not given its
prior written consent and are otherwise maintained on terms and conditions from time
to time approved in writing by the Mortgagee;(j)
    
    Correspondence with brokers and associationsto provide to the Mortgagee, at the time of each such communication, copies of all
written communications between the Owner and the Approved Brokers and approved
war risks and protection and indemnity associations which relate to compliance with
requirements from time to time applicable to the Insurances including, without
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limitation, all requisite declarations and payments of additional premiums or calls
referred to in clause 5.1.1(i);(k)
    
    Independent reportif so requested by the Mortgagee, but at the cost of the Owner, to furnish the
Mortgagee from time to time with a detailed report signed by an independent firm of
marine insurance brokers appointed by the Mortgagee dealing with the insurances
maintained on the Ship and stating the opinion of such firm as to the adequacy
thereof;(l)
    
    Collection of claimsto do all things necessary and provide all documents, evidence and information to
enable the Mortgagee to collect or recover any moneys which shall at any time become
due in respect of the Insurances;(m)
    
    Employment of Shipnot to employ the Ship or suffer the Ship to be employed otherwise than in conformity
with the terms of the Insurances (including any warranties express or implied
therein) without first obtaining the consent of the insurers to such employment and
complying with such requirements as to extra premium or otherwise as the insurers may
prescribe; and
 (n)
    
    Application of recoveries
 to apply all sums receivable under the Insurances which are paid to the Owner in
accordance with the Loss Payable Clauses in repairing all damage and/or in
discharging the liability in respect of which such sums shall have been received;
 5.1.2
    
    Ships name and registration
 not to change the name of the Ship and to register the Ship as a Liberian ship and not to
do or suffer to be done anything, or omit to do anything the doing or omission of which
could or might result in such registration being forfeited or imperilled or which could or
might result in the Ship being required to be registered under any flag other than the
Liberian flag and not to register the Ship or permit its registration under any other flag
without the prior written consent of the Mortgagee;
 5.1.3
    
    Repair
 to keep the Ship in a good and efficient state of repair and to procure that all repairs
to or replacement of any damaged, worn or lost parts or equipment are effected in such
manner (both as regards workmanship and quality of materials) as not to diminish the value
of the Ship;
 5.1.4
    
    Modification; removal of parts; equipment owned by third parties
 not without the prior written consent of the Mortgagee to or suffer any other person to:
 (a)
    
    make any modification to the Ship in consequence of which her structure,
type or performance characteristics could or might be materially altered or her value
materially reduced; or(b)
    
    remove any material part of the Ship or any equipment the value of which is
such that its removal from the Ship would materially reduce the value of the Ship
without replacing the same with equivalent parts or equipment which are owned by the
Owner free from Encumbrances; or
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(c)
    
    install on the Ship any equipment owned by a third party which cannot be
removed without causing damage to the structure or fabric of the Ship;
 5.1.5
    
    Maintenance of class; compliance with regulations
 to maintain the Classification as the class of the Ship and to comply with and ensure that
the Ship at all times complies with the provisions of all laws, regulations and
requirements (statutory or otherwise) from time to time applicable to vessels registered
under the laws and flag of the Republic of Liberia or otherwise applicable to the Ship and
to procure that the Classification Society shall make available to the Mortgagee upon its
request such information and documents in respect of the Ship as are maintained in the
records of the Classification Society;
 5.1.6
    
    Surveys
 to submit the Ship to continuous surveys and such periodical or other surveys as may be
required for classification purposes and if so required to supply to the Mortgagee copies
of all survey reports issued in respect thereof;
 5.1.7
    
    Inspection
 to ensure that the Mortgagee, by surveyors or other persons appointed by it (at the
expense of the Owner) for such purpose, may board the Ship at all reasonable times for the
purpose of inspecting her and her records and to afford all proper facilities for such
inspections and for this purpose to give the Mortgagee reasonable advance notice of any
intended drydocking of the Ship (whether for the purpose of classification, survey or
otherwise) Provided thatif no Event of Default has occurred the Owner shall only bear the
cost of no more than one (1) such inspection in every two (2) calendar years;
 5.1.8
    
    Prevention of and release from arrest
 promptly to pay and discharge all debts, damages, liabilities and outgoings whatsoever
which have given or may give rise to maritime, statutory or possessory liens on, or claims
enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the
event of a writ or libel being filed against the Ship, her Earnings or Insurances or any
part thereof, or of any of the same being arrested, attached or levied upon pursuant to
legal process or purported legal process or in the event of detention of the Ship in
exercise or purported exercise of any such lien or claim as aforesaid, to procure the
release of the Ship, her Earnings and Insurances from such arrest, detention, attachment
or levy or, as the case may be, the discharge of the writ or libel forthwith upon
receiving notice thereof by providing bail or procuring the provision of security or
otherwise as the circumstances may require;
 5.1.9
    
    Employment
 not to employ the Ship or permit her employment in any manner, trade or business which is
forbidden by Liberian law or international law, or which is otherwise unlawful or illicit
under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or
in any manner whatsoever which may render her liable to condemnation in a prize court, or
to destruction, seizure, confiscation, penalty or sanctions and, in the event of
hostilities in any part of the world (whether war be declared or not), not to employ the
Ship or permit her employment in carrying any contraband goods, or to enter or trade to or
to continue to trade in any zone which has been declared a war zone by any Government
Entity or by the Ships war risks insurers unless the prior written consent of the
Mortgagee is obtained and such special insurance cover as the Mortgagee may require shall
have been effected by the Owner and at its expense;
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5.1.10
    
    Information
 promptly to furnish to the Mortgagee all such information as it may from time to time
require regarding the Ship, her employment, position and engagements, particulars of all
towages and salvages, and copies of all charters and other contracts for her employment or
otherwise howsoever concerning her;
 5.1.11
    
    Notification of certain events
 to notify the Mortgagee forthwith by facsimile thereafter confirmed by letter of:
 (a)
    
    any damage to the Ship requiring repairs the cost of which will or might
exceed the Casualty Amount;(b)
    
    any occurrence in consequence of which the Ship has or may become a Total
Loss;(c)
    
    any requisition of the Ship for hire;(d)
    
    any requirement or recommendation made by any insurer or the Classification
Society or by any competent authority which is not, or cannot be, complied with in
accordance with its terms;(e)
    
    any arrest or detention of the Ship or any exercise or purported exercise
of a lien or other claim on the Ship or the Earnings or Insurances or any part
thereof;(f)
    
    any petition or notice of meeting to consider any resolution to wind-up the
Owner (or any event analogous thereto under the laws of the place of its
incorporation);(g)
    
    the occurrence of any Default;(h)
    
    the occurrence of any Environmental Claim against the Owner, the Ship, any
other Relevant Party or any other Relevant Ship or any incident, event or
circumstance which may give rise to any such Environmental Claim; or(i)
    
    the occurrence of any other matter, event or incident, actual or
threatened, the effect of which will or could lead to the ISPS Code not being
complied with by the Owner;
 5.1.12
    
    Payment of outgoings and evidence of payments
 promptly to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and
her Earnings and Insurances and to keep proper books of account in respect of the Ship and
her Earnings and, as and when the Mortgagee may so require, to make such books available
for inspection on behalf of the Mortgagee, and to furnish satisfactory evidence that the
wages and allotments and the insurance and pension contributions of the Master and crew
are being promptly and regularly paid and that all deductions from crews wages in respect
of any tax liability are being properly accounted for and that the Master has no claim for
disbursements other than those incurred by him in the ordinary course of trading on the
voyage then in progress;
 5.1.13
    
    Encumbrances
 not without the prior written consent of the Mortgagee (and then only subject to such
conditions as the Mortgagee may impose) to hypothecate, create or purport or agree to
create or permit to arise or subsist any Encumbrance (other than Permitted Liens) over or
in respect of the Ship, any share or interest therein or in the Insurances, Earnings or
Requisition Compensation or any part thereof or interest therein other than to or in
favour of the Mortgagee;
 5.1.14
    
    Sale or other disposal
 not without the prior written consent of the Mortgagee (and then only subject to such
terms and conditions as the Mortgagee may impose) to sell, agree to sell, transfer,
abandon or otherwise dispose of the Ship or any share or interest therein;
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5.1.15
    
    Chartering
 save under any charter relating to the Ship as disclosed to the Mortgagee by the Owner,
not without the prior written consent of the Mortgagee (which the Mortgagee shall have
full liberty to withhold) and, if such consent is given, only subject to such conditions
as the Mortgagee may impose, to let the Ship:
 (a)
    
    on demise charter for any period;(b)
    
    by any time or consecutive voyage charter for a term which exceeds or which
by virtue of any optional extensions therein contained might exceed twelve (12)
months duration;(c)
    
    on terms whereby more than two (2) months hire (or the equivalent) is
payable in advance; or(d)
    
    below the market rate prevailing at the time when the Ship is fixed or
other than on arms length terms;
 5.1.16
    
    Sharing of Earnings
 not without the prior written consent of the Mortgagee (and then only subject to such
conditions as the Mortgagee may impose) to enter into any agreement or arrangement whereby
the Earnings may be shared with any other person;
 5.1.17
    
    Payment of Earnings
 to procure that the Earnings are paid to the Operating Account for the Ship at all times
unless and until the Mortgagee shall have directed to the contrary pursuant to clause
2.1.1 of the General Assignment and that any Earnings which are so payable and which are
in the hands of the Owners brokers or agents are duly accounted for and paid over to the
Mortgagee forthwith on demand;
 5.1.18
    
    Repairers liens
 not without the prior written consent of the Mortgagee to put the Ship into the possession
of any person for the purpose of work being done upon her in an amount exceeding or likely
to exceed the Casualty Amount unless such person shall first have given to the Mortgagee
in terms satisfactory to it, a written undertaking not to exercise any lien on the Ship or
her Earnings for the cost of such work or otherwise;
 5.1.19
    
    Manager
 not without the prior written consent of the Mortgagee to appoint manager of the Ship
other than the Manager, or terminate, or amend the terms of, the relevant Management
Agreement;
 5.1.20
    
    Compliance with Liberian law
 to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of
the Republic of Liberia as prescribed by Chapter 3 of Title 21 of the Liberian Code of
Laws Revised as amended and otherwise to comply with and satisfy all the requirements and
formalities established by the said Liberian Code of Laws and any other pertinent
legislation of the Republic of Liberia to perfect this Mortgage as a valid and enforceable
first and preferred lien upon the Ship and to furnish to the Mortgagee from time to time
such proofs as the Mortgagee may reasonably request for its satisfaction with respect to
the Owners compliance with the provisions of this sub-clause;
 5.1.21
    
    Notice of Mortgage
 to place and at all times and places use due diligence to retain a properly certified copy
of this Mortgage (which shall form part of the ships documents) on board the Ship with
her
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papers and cause such certified copy of this Mortgage to be exhibited to any and all
persons having business with the Ship which might create or imply any commitment or
encumbrance whatsoever on or in respect of the Ship (other than a lien for crews wages
and salvage) and to any representative of the Mortgagee and to place and keep prominently
displayed in the chart room and in the Masters cabin of the Ship a framed printed notice
in plain type reading as follows:
 NOTICE OF MORTGAGE
 This Vessel is covered by a First Preferred Liberian Continuation Mortgage to CREDIT
SUISSE AG(formerly known as CREDIT SUISSE) of Paradeplatz 8, 8070 Zurich, Switzerland
under authority of Title 21 of the Liberian Code of Laws Revised as amended. Under the
terms of the said Mortgage neither the Owner nor any charterer nor the Master of this
Vessel nor any other person has any right, power or authority to create, incur or permit
to be imposed upon this Vessel any commitments or encumbrances whatsoever other than for
crews wages and salvage;
 5.1.22
    
    Conveyance on default
 where the Ship is (or is to be) sold in exercise of any power contained in this Mortgage
to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship
as the Mortgagee may require;
 5.1.23
    
    Anti-drug abuse
 without prejudice to clause 5.1.9, to take all necessary and proper precautions to prevent
any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or
any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship
shall be employed or located or trade or which may otherwise be applicable to the Ship
and/or the Owner and, if the Mortgagee shall so require, to enter into a Carrier
Initiative Agreement with the United States Customs and Border Protection and to procure
that such agreement (or any similar agreement hereafter introduced by any Government
Entity of the United States of America) is maintained in full force and effect and
performed by the Owner; and
 5.1.24
    
    Compliance with environmental laws
 to comply with, and use all reasonable and proper endeavours to procure that all
Environmental Affiliates of the Owner comply with, all Environmental Laws in relation to
the Ship including, without limitation, requirements relating to manning, submission of
oil spill response plans, designation of qualified individuals and establishing of
financial responsibility and to obtain and comply with, and procure that all Environmental
Affiliates of the Owner obtain and comply with, all Environmental Approvals in relation to
the Ship.
 6
    
    Powers of Mortgagee to protect security and remedy defaults6.1
    
    Protective actionThe Mortgagee shall, without prejudice to its other rights, powers and remedies, be entitled
(but not bound) at any time, and as often as may be necessary, to take any such action as it
may in its discretion think fit for the purpose of protecting or maintaining the security
created by this Mortgage and all Expenses attributable thereto shall be payable by the Owner
on demand.6.2
    
    Remedy of defaultsWithout prejudice to the generality of the provisions of clause 6.1:
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6.2.1
    
    if the Owner fails to comply with any of the provisions of clause 5.1.1 the Mortgagee shall
be entitled (but not bound) to effect and thereafter to maintain all such insurances upon the
Ship as in its discretion it may think fit in order to procure the compliance with such
provisions or alternatively, to require the Ship (at the Owners risk) to remain in, or to
proceed to and remain in, a port designated by the Mortgagee until such provisions are fully
complied with;6.2.2
    
    if the Owner fails to comply with any of the provisions of clauses 5.1.3, 5.1.5 or 5.1.6,
the Mortgagee shall be entitled (but not bound) to arrange for the carrying out of such
repairs, changes or surveys as it may deem expedient or necessary in order to procure the
compliance with such provisions; and6.2.3
    
    if the Owner fails to comply with any of the provisions of clause 5.1.8, the Mortgagee shall
be entitled (but not bound) to pay and discharge all such debts, damages, liabilities and
outgoings as are therein mentioned and/or to take any such measures as it may deem expedient
or necessary for the purpose of securing the release of the Ship in order to procure the
compliance with such provisions,and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be
payable by the Owner to the Mortgagee on demand.7
    
    Powers of Mortgagee on Event of Default7.1
    
    PowersUpon the happening of any Event of Default, the Mortgagee shall become forthwith entitled to
demand in accordance with the provisions of the Corporate Guarantee the payment of the
Outstanding Indebtedness immediately whereupon the Outstanding Indebtedness shall become so
due and payable and (whether or not the Mortgagee shall have made any such demand) the
Mortgagee shall become forthwith entitled as and when it may see fit, to put into force and
exercise all or any of the rights, powers and remedies possessed by it as mortgagee of the
Ship or otherwise (whether at law, by virtue of this Mortgage or otherwise) and in particular
(without limiting the generality of the foregoing):7.1.1
    
    to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by
the provisions of Chapter 3 of Title 21 of the Liberian Code of Laws Revised (as amended) and
all applicable laws of any other jurisdiction;7.1.2
    
    to take possession of the Ship;7.1.3
    
    to require that all policies, contracts, certificates of entry and other records relating to
the Insurances (including details of and correspondence concerning outstanding claims) be
delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee
may nominate;7.1.4
    
    to collect, recover, compromise and give a good discharge for, all claims then outstanding
or thereafter arising under the Insurances or any of them or in respect of the Ship, her
Earnings or Requisition Compensation or any part thereof, and to take over or institute (if
necessary using the name of the Owner) all such proceedings in connection therewith as the
Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit
any brokers through whom collection or recovery is effected to charge the usual brokerage
therefor;7.1.5
    
    to discharge, compound, release or compromise claims in respect of the Ship, her Earnings,
Insurances or Requisition Compensation or any part thereof which have given or may give rise
to any charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition
Compensation or any part thereof or which are or may be enforceable by proceedings against the
Ship, her Earnings, Insurances or Requisition Compensation or any part thereof;
 15




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7.1.6
    
    to sell the Ship or any share or interest therein with or without prior notice to the Owner,
and with or without the benefit of any charterparty, and free from any claim by the Owner
(whether in admiralty, in equity, at law or by statute) by public auction or private contract,
at such place and upon such terms as the Mortgagee in its absolute discretion may determine,
with power to postpone any such sale, and without being answerable for any loss occasioned by
such sale or resulting from postponement thereof and with power, where the Mortgagee purchases
the Ship, to make payment of the sale price by making an equivalent reduction in the amount of
the Outstanding Indebtedness in the manner referred to in clause 8.1;7.1.7
    
    to manage, insure, maintain and repair the Ship, and to employ, sail or lay up the Ship in
such manner and for such period as the Mortgagee, in its absolute discretion, deems expedient
accounting only for net profits arising from any such employment; and7.1.8
    
    to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in
connection with the exercise of the powers (or any of them) referred to in this clause 7.1.7.2
    
    Dealings with MortgageeUpon any sale of the Ship or any share or interest therein by the Mortgagee pursuant to
clause 7.1.6 or pursuant to clause 11.1, the purchaser shall not be bound to see or enquire
whether the Mortgagees power of sale has arisen in the manner provided in this Mortgage or
whether the Mortgagee has made a demand for payment under the provisions of the Corporate
Guarantee and the sale shall be deemed to be within the power of the Mortgagee and the
receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who
shall not be concerned with the manner of application of the proceeds of sale or be in any
way answerable therefor and the sale shall operate to divest the Owner of all rights, title
and interest of any nature whatsoever in the Ship and to bar any such interest of the Owner,
and all persons claiming through or under the Owner.8
    
    Application of moneys8.1
    
    ApplicationAll moneys received by the Mortgagee in respect of a sale of the Ship or any share or
interest therein or in respect of the employment of the Ship pursuant to the provisions of
clause 7.1.7 (or otherwise pursuant to the provisions of this Mortgage) and all moneys
received and retained by the Mortgagee in respect of the Insurances pursuant to this Mortgage
shall be held by it upon trust in the first place to pay or make good the Expenses and the
balance shall be applied in the manner specified in clause 2.10 of the Corporate Guarantee.8.2
    
    ShortfallIn the event that the balance referred to in clause 8.1 is insufficient to pay in full the
whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the
shortfall from the Owner or any other person liable therefor.9
    
    Remedies cumulative and other provisions9.1
    
    No implied waivers; remedies cumulativeNo failure or delay on the part of the Mortgagee to exercise any right, power or remedy
vested in it under the Corporate Guarantee or this Mortgage shall operate as a waiver
thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or
remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken
by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise
thereof or proceedings to enforce the same or the exercise of any other right, power or
remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of
this Mortgage requires such consent prejudice the right of the Mortgagee to give or withhold
 16




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consent to the doing of any other similar act. The remedies provided in the Corporate
Guarantee and this Mortgage are cumulative and are not exclusive of any remedies provided by
law.9.2
    
    Preferred statusAnything herein to the contrary notwithstanding, it is intended that nothing herein shall
waive the preferred status of this Mortgage and that, if any provision or portion hereof
shall be construed to waive the preferred status of this Mortgage, then such provision or
portion to such extent shall be void and of no effect.9.3
    
    DelegationThe Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate
all or any of the powers and discretions vested in it by the Corporate Guarantee or this
Mortgage (including the power vested in it by virtue of clause 11) in such manner, upon such
terms, and to such persons as the Mortgagee in its absolute discretion may think fit.9.4
    
    Incidental powersThe Mortgagee shall be entitled to do all acts and things incidental or conducive to the
exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship
(whether at law, under this Mortgage or otherwise) and in particular (but without prejudice
to the generality of the foregoing), upon becoming entitled to exercise any of its powers
under clause 7.1, the Mortgagee shall be entitled to discharge any cargo on board the Ship
(whether the same shall belong to the Owner or any other person) and to enter into such other
arrangements respecting the Ship, her insurances, management, maintenance, repair,
classification and employment in all respects as if the Mortgagee was the owner of the Ship,
but without being responsible for any loss incurred as a result of the Mortgagee doing or
omitting to do any such acts or things as aforesaid.10
    
    Costs and indemnity10.1
    
    CostsThe Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or
liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing,
out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together
with any value added tax or similar tax payable in respect thereof, incurred by the Mortgagee
in connection with the exercise or enforcement of, or preservation of any rights under, the
Corporate Guarantee or this Mortgage or otherwise in respect of the Outstanding Indebtedness
and the security therefor, or in connection with the preparation, completion, execution or
registration of the Corporate Guarantee or this Mortgage.10.2
    
    Mortgagees indemnityThe Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses,
actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising
which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or
employee for whose liability, act or omission the Mortgagee may be answerable in respect of,
in relation to, or in connection with anything done or omitted in the exercise or purported
exercise of the powers contained in this Mortgage or otherwise in connection with such powers
or with this Mortgage or with the Ship, its Earnings, Requisition Compensation and Insurances
or otherwise howsoever in relation to, or in connection with, any of the matters dealt with
in the Corporate Guarantee or this Mortgage.11
    
    Attorney
 17




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11.1
    
    PowerBy way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney
generally for and in the name and on behalf of the Owner, and as the act and deed or
otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such
deeds, assurances, agreements, instruments, acts and things which may be required for the
full exercise of all or any of the rights, powers or remedies conferred by the Corporate
Guarantee, this Mortgage or any of the other Security Documents, or which may be deemed
proper in or in connection with all or any of the purposes aforesaid (including, without
prejudice to the generality of the foregoing, the execution and delivery of a bill of sale of
the Ship). The power of attorney hereby conferred shall be a general power of attorney and
the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance,
agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto.
Provided however that such power shall not be exercisable by or on behalf of the Mortgagee
until the happening of an Event of Default.11.2
    
    Dealings with attorneyThe exercise of such power by or on behalf of the Mortgagee shall not put any person dealing
with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor
shall such person be in any way affected by notice that no such Event of Default has
happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of the
Mortgagees right to exercise the same.11.3
    
    FilingsThe Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its
behalf and as its act and deed or otherwise of it to agree the form of and to execute and do
all deeds, instruments, acts and things in order to file, record, register or enrol this
Mortgage in any court, public office or elsewhere which the Mortgagee may in its discretion
consider necessary or advisable, now or in the future, to ensure the legality, validity,
enforceability or admissibility in evidence thereof.12
    
    Further assuranceThe Owner hereby further undertakes at its own expense from time to time to execute,
sign, perfect, do and (if required) register every such further assurance, document, act or
thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of
more effectually mortgaging and charging the Ship or perfecting the security constituted or
intended to be constituted by this Mortgage or contemplated by the Corporate Guarantee.13
    
    Total amount and maturityFor the purpose of recording this First Preferred Mortgage as required by Chapter 3 of
Title 21 of the Liberian Code of Laws Revised as amended the total amount is One hundred and
nine million two hundred thousand Dollars ($109,200,000) (of which Ninety one million Dollars
($91,000,000) represents the maximum principal amount of the Loan that may be outstanding at
any one time and Eighteen million two hundred thousand Dollars ($18,200,000) represents
maximum amount secured by this Mortgage with respect to the Swap Obligations) and interest on
the Loan and performance of mortgage covenants. The date of maturity is 31 October 2015 and
the discharge amount is the same as the total amount.14
    
    Law, jurisdiction and other provisions14.1
    
    LawThis Mortgage and any non-contractual obligations connected with it are governed by, and
shall be construed and enforceable in accordance with, the laws of the Republic of Liberia.
 18




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14.2
    
    Submission to jurisdictionFor the benefit of the Mortgagee, the Owner irrevocably agrees, that any legal action or
proceedings in connection with this Mortgage (including any non-contractual obligations
connected with it) may be brought in the English courts, or in the courts of any other
country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes
arising out of, or in connection with, this Mortgage. The Owner irrevocably and
unconditionally submits to the jurisdiction of the English courts and the courts of any
country chosen by the Mortgagee and irrevocably designates, appoints and empowers Atlas
Maritime Service Ltd. at present of Enterprise House, 113-115 George Lane, London E18 1AB,
England to receive, for it and on its behalf, service of process issued out of the English
courts in any legal action or proceedings arising out of or in connection with this Mortgage
(including any non-contractual obligations connected with it). The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee
to take proceedings against the Owner or the Ship in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude
the taking of proceedings in any other jurisdiction, whether concurrently or not.15
    
    Other provisions15.1
    
    SeverabilityIf any provision in the Corporate Guarantee, the Loan Agreement, the Master Swap Agreement,
this Mortgage or any of the other Security Documents be or becomes invalid or unenforceable
under any applicable law the provisions hereof shall in all other respects remain in full
force and effect and the provision in question shall be ineffective to the extent (but only
to the extent) of its disconformity with the requirement of the applicable law and if it is
competent to the parties to waive any requirements which would otherwise operate as aforesaid
those requirements are hereby waived to the extent permitted by such law to the end that the
Corporate Guarantee, the Loan Agreement, the Master Swap Agreement, this Mortgage and each of
the other Security Documents shall be valid, binding and enforceable in accordance with their
respective terms.15.2
    
    CounterpartsThis Mortgage may be executed in any number of counterparts each of which shall be an
original but such counterparts shall together constitute one and the same instrument.15.3
    
    Continuation MortgageThis Mortgage is granted in continuation of the Prior Mortgage within the meaning of Section
101 of Title 21 of the Liberian Code of Laws Revised as amended, and upon recordation of this
Mortgage in accordance with the provisions of Title 21 of the Liberian Code of Laws Revised
as amended, this Mortgage shall have preferred status as of 28 December 2007, the First
Recording Date.16
    
    Notices16.1
    
    Every notice, request, demand or other communication under this Mortgage shall:16.1.1
    
    be in writing delivered personally or by first-class prepaid letter (airmail if available)
or facsimile transmission or other means of telecommunication in permanent written form;16.1.2
    
    be deemed to have been received in the case of a letter, when delivered personally or three
(3) days after it has been put in to the post and, in the case of a facsimile transmission or
other means of telecommunication in permanent written form, at the time of despatch (provided
that if the date of despatch is not a business day in the country of the addressee
or if the time of despatch is after the close of business in the country of the addressee
it shall be deemed to have been received at the opening of business on the next such
business day); and
 19




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16.1.3
    
    be sent:
 (a)
    
    if to the Owner at:c/o Free Bulkers S.A.
89 Akti Miaouli
185 38 Piraeus
Greece
Fax no: +30 210 429 1010
Attention: Mr Ion Varouxakis(b)
    
    if to the Mortgagee at:Credit Suisse AG
Paradeplatz 8
8070 Zurich
Switzerland
Fax: +41 612 667 939
Attention: Mr Gianrichy Giamboi
 or to such other address and/or numbers as is notified by one party to the other party
under this Mortgage.
 IN WITNESS
 ADVENTURE FIVE S.A.By:
    /s/ Ioannis FassolisName:
    Ioannis FassolisTitle:
    Attorney-in-Fact 20




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Schedule 1
 The Principal Agreement
 21




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Schedule 2
 The Second and Third Supplemental Agreements
 22




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Schedule 3
 The Master Swap Agreement
 23




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Schedule 4
 The Corporate Guarantee
 24




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Schedule 5
 The Prior Mortgage
 25




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Acknowledgement of Mortgage
 LISCR PIRAEUS
    
    )) S.SPREFECTURE OF ATTICA, REPUBLIC OF GREECE
    
    )
 ADVENTURE FIVE S.A.
 Special Agent 26