Exhibit 4.19

Private & confidential

| |                        | 
| | ---------------------- | 
| | Dated: 30th June, 2008 | 
| |                        | 

STALOUDI SHIPPING CORPORATION

- and -

DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT

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LOAN AGREEMENTfor a secured 
loan facility of up to US$56,600,000

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Theo V. Sioufas & Co.Law Offices
Piraeus

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TABLE OF CONTENTS

|       |                                             |     
|------ | ------------------------------------------- | ----
|CLAUSE | HEADINGS                                    | PAGE
|       |                                             |     
|1.     | PURPOSE AND
 LOAN AMOUNT                    | 1   
|       |                                             |     
|2.     | CURRENCY OF
 THE LOAN-DEFINITIONS           | 1   
|       |                                             |     
|3.     | DRAWDOWN                                    | 3   
|       |                                             |     
|4.     | TERM OF THE
 LOAN                           | 3   
|       |                                             |     
|5.     | INTEREST AND
 INTEREST PERIODS              | 4   
|       |                                             |     
|6.     | REPAYMENT -
 PREPAYMENT                     | 6   
|       |                                             |     
|7.     | FEES-COMMITMENT
 COMMISSION                 | 8   
|       |                                             |     
|8.     | PAYMENTS                                    | 8   
|       |                                             |     
|9.     | COSTS,
 EXPENSES AND DAMAGES                | 9   
|       |                                             |     
|10.    | SECURITIES                                  | 11  
|       |                                             |     
|11.    | INSURANCES                                  | 13  
|       |                                             |     
|12.    | AVAILABILITY                                | 14  
|       |                                             |     
|13.    | EVENTS OF
 DEFAULT                          | 15  
|       |                                             |     
|14.    | REPRESENTATIONS
 AND WARRANTIES - COVENANTS | 16  
|       |                                             |     
|15.    | JUDGEMENT
 CURRENCY                         | 20  
|       |                                             |     
|16.    | WAIVERS                                     | 20  
|       |                                             |     
|17.    | INVALIDITY-INCREASED
 COST                  | 21  
|       |                                             |     
|18.    | SURVIVAL                                    | 22  
|       |                                             |     
|19.    | FURTHER
 ASSURANCE                          | 22  
|       |                                             |     
|20.    | NOTICES                                     | 22  
|       |                                             |     
|21.    | ASSIGNMENT                                  | 23  
|       |                                             |     
|22.    | MISCELLANEOUS                               | 23  

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|         |                    |     
|-------- | ------------------ | ----
|CLAUSE   | HEADINGS           | PAGE
|         |                    |     
|23.      | CHANGE OF
 LAW     | 24  
|         |                    |     
|24.      | APPLICABLE
 LAW    | 24  
|         |                    |     
|25.      | EXECUTION          | 25  
|         |                    |     
|SCHEDULE |                   
|         |                   
|1.       | NOTICE OF
 DRAWING |     

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THIS AGREEMENT
is made this 30th day of June, 2008

BETWEEN

|    |                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | STALOUDI SHIPPING CORPORATION, a company
 organised and existing under the laws of the Republic of Liberia having its
 registered office at 80 Broad Street, Monrovia, Liberia (hereinafter the Borrower which expression shall include
 its permitted successors and assigns); and
|    |                                                                                                                                                                                                                                                                                      
|(2) | DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT,
 Bremen and Hamburg, acting through its office in Bremen, Domshof 17, 28195
 Bremen, Federal Republic of Germany (hereinafter called the Bank which expression shall include its
 successors and permitted assigns).                      

BY WHICH IT IS AGREED

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | PURPOSE AND LOAN AMOUNT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | This
 Agreement sets out the terms and conditions upon which the Bank will make
 available to the Borrower a floating interest rate loan facility in the sum
 of US$56,600,000 (United States Dollars Fifty six million six hundred
 thousand) (hereinafter called the Loan
 which expression shall also mean the balance thereof at any time outstanding
 hereunder), for the purpose of refinancing the existing loan indebtedness of
 the Borrower to the Bank and to provide working capital to the Borrower.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.  | CURRENCY OF THE LOAN-DEFINITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.1 | Subject to
 the conditions and provisions of this Agreement, the whole amount of the Loan
 shall be advanced in Dollars.                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.2 | The
 advancing or maintaining of the Loan (or any part thereof) in Dollars is
 subject to the fact that the then applicable currency regulations do not, in
 the reasonable opinion of the Bank, adversely affect the position of the Bank
 in relation thereto.                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.3 | In this
 Agreement the following terms shall have the meanings given to them below:                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Banking Day means a day (other than a
 Saturday or Sunday) on which banks and financial markets in London,
 Frankfurt/Main, Hamburg and Bremen are open for business and, in respect of a
 day on which a payment is required to be made hereunder, a day on which banks
 and financial markets are open for business in the main financial centre of
 the country in which such payment is to be made;                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Dollars and S means the lawful currency
 for the time being of the United States of America in immediately available
 and transferable funds or such other funds as are customary for same day
 settlement of international Dollar transactions;                                                                                                                                                                                                                                                               

1

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Drawdown Date means the date upon which
 the Borrower has requested that the Loan be advanced to it pursuant to Clause
 3, or thereafter the date on which the Loan is actually advanced to the
 Borrower hereunder;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Guarantee means a guarantee and/or
 indemnity given or, as the context may require, to be given by the Guarantor
 in form and substance satisfactory to the Bank as security for the
 Outstanding Indebtedness and any and all other obligations of the Borrower
 under this Agreement and the Master Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Guarantor means SAFE
 BULKERS
 INC.,
 a company organised and existing under the laws of the Republic of Marshall
 Islands (and includes its successors) which shall give the Guarantee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Interest Period shall have the meaning
 given to it in Clause 5.1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Loan Currency means Dollars;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Manager means for the time being SAFETY MANAGEMENT OVERSEAS S.A., of
Panama, having its
 registered office in Panama and an office established in Greece (32 Avenue
 Karamanli, POBox 70837, GR 16605 Voula, Athens) pursuant to the Greek laws
 89/67, 378/68, 27/75 and 814/79 (as amended) or any other person appointed by
 the Borrower, with the consent of the Bank, as the manager of the Vessel and
 includes its successors in title;                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Master Agreement means any Deutscher
 Rahmenvertrag (Rahmenvertrag Für Finanztermingeschäfte) (or any other form
 of master agreement relating to interest or currency exchange transactions)
 entered into between the Bank and the Borrower during the Security Period,
 including each Schedule (if any) to the Master Agreement and each
 Confirmation exchanged pursuant to the Master Agreement;                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Master Agreement Liabilities means all
 liabilities of the Borrower to the Bank under or pursuant to the Master
 Agreement, whether actual or contingent, present or future;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Outstanding Indebtedness means the
 aggregate of (a) the Loan and interest accrued and accruing thereon, (b) any
 Master Agreement Liabilities, (c) all such expenses, claims, liabilities,
 losses, costs, duties, fees, charges or other moneys as are stated in this
 Agreement, the Master Agreement and the other Security Documents to be
 payable by the Borrower to or recoverable from the Borrower by the Bank (or
 in respect of which the Borrower agrees in this Agreement, the Master Agreement
 and the other Security Documents to indemnify the Bank) and (d) all other
 sums of money from time to time owing by the Borrower to the Bank, whether
 actually or contingently under this Agreement, the Master Agreement and the
 other Security Documents:
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Pledged Account means an account of the
 Borrower opened or to be opened with the Bank whereto the Pledged Deposit
 shall be deposited and maintained;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Pledged Deposit means, an amount equal to
 Two million Dollars ($2,000,000) shall be deposited into the Pledged Account;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

2

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Security Documents shall have the meaning
 given to them in Clause 10;                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|    | Security Party means the Borrower, the
 Manager, the Guarantor and any other person (other than the Bank) which is or
 may become a party to any of the Security Documents;                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Security Period means the period
 commencing on the date hereof and terminating on the date upon which the
 whole of the Outstanding Indebtedness has been repaid in full and the
 Borrower has ceased to be under any further actual or contingent liability to
 the Bank under or in connection with the Security Documents;                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Total Loss means:                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                           | actual or
 constructive or compromised or arranged total loss of the Vessel; or                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                           | requisition
 for title or other compulsory acquisition of the Vessel by a government
 entity otherwise than by requisition for hire; and                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                           | hijacking,
 theft, condemnation capture, seizure, arrest, detention or confiscation of
 the Vessel by any government or by persons acting or purporting to act on
 behalf of any government unless the Vessel be released from such hijacking,
 theft, condemnation seizure capture arrest or detention within thirty (30)
 days after the occurrence thereof; and
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|    | Vessel means the dry bulk carrier STALO of 87,000 dwt constructed at
 IHIMU Yokohama, Japan in 2005 and registered in the ownership of the Borrower
 under the laws and flag of the Republic of Cyprus with IMO No. 9309485.                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|3.  | DRAWDOWN                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|3.1 | The Borrower
 may drawdown the full amount of the Loan on the Drawdown Date, such date
 being not later than 31st July, 2008 (the Termination Date) or such later date as
 the Bank in its sole discretion may agree in writing. Any portion of the Loan
 not drawn by the Termination Date shall be cancelled and shall thereafter not
 be available to the Borrower, unless the parties hereto agree otherwise.                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|3.2 | The Borrower
 may make a request for the advance of the Loan by sending to the Bank a duly
 completed Notice of Drawing substantially in the form of Schedule 1 hereto
 (which shall be revocable up until the fourth Banking day, prior to the
 specified Drawdown Date - whereafter it will be irrevocable) to be received
 by the Bank not later than 12.00 a.m. (Hamburg/Bremen time) three (3) Banking
 Days prior to the Drawdown Date.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|4.  | TERM OF THE LOAN                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                   
|4.1 | The Loan is
 to be made available to the Borrower for a period commencing on the Drawdown
 Date and ending, subject to the terms and conditions of this Agreement,
 fifteen (15) years thereafter, provided, however, that the Bank shall
 be entitled on the 10th anniversary of the Drawdown Date by notice
 to the Borrower to declare that the obligation of the Bank to make the Loan
 available is terminated and demand full          

3

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|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | repayment of
 the Outstanding Indebtedness, whereupon the same shall, immediately or in
 accordance with the terms of such notice, become due and payable without any
 further diligence, presentment, demand of payment, protest or notice which
 are expressly waived by the Borrower.                                          
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4.2 | The period
 commencing on the date hereof and terminating upon all the moneys payable or
 to become payable at any time pursuant to this Agreement, the Master
 Agreement and/or the other Security Documents shall have been paid and
 discharged in full is herein called the Security
 Period.                               
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.  | INTEREST AND INTEREST PERIODS                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.1 | The Borrower
 shall pay interest on the Loan (or such relevant part) in respect of each
 Interest Period relating thereto (hereinafter the Interest) on the last day of such Interest Period at the
 rate per annum determined by the Bank to be the aggregate (hereinafter the Basic Rate) of (i) the Margin and (ii)
 Libor.
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.2 | In this
 Agreement:                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (a)                                                                                                                                                                                                                                                                                                                                | Interest Period shall mean each period for
 the calculation of Interest in respect of the Loan (or such part thereof)
 ascertained in accordance with Clause 5.3 and 5.4;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (b)                                                                                                                                                                                                                                                                                                                                | Margin shall mean zero point nine zero per
 centum (0.90%) per annum;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (c)                                                                                                                                                                                                                                                                                                                                | Libor shall mean the rate of interest
 applicable to the Loan (or the relevant part thereof) for each Interest
 Period relative thereto and being the rate per annum determined by the Bank
 to be equal (rounded upwards, if necessary, to the nearest one sixty-fourth
 of one per centum (1/64%)) to the offered rate for deposits in Dollars or, as
 the case may be, the relevant for a term co-extensive with such Interest
 Period as set forth on the Reuters Page FRBD at approximately 11:00 a.m.
 London time on the second Banking Day prior to the commencement of such
 Interest Period; provided always that if such offer rate is not
 available, for whatsoever reason, on the Reuters Page FRBD at approximately
 11:00 a.m. London time then Libor for such Interest Period shall mean the
 rate per annum determined by the Bank to be the arithmetic mean (rounded
 upwards, if necessary, to the nearest one sixty-fourth of one per centum
 (1/64%)) of the rates communicated by the Reference Banks to the Bank as the
 rates at which each such Reference Bank would offer a deposit in Dollars for
 a period equal to such Interest Period in an amount equivalent to or
 comparable with the amount of the Loan or the relevant part (thereof) to
 prime banks in the London Interbank Market at approximately 11:00 a.m. London
 time on the second Banking Day prior to the commencement of such Interest
 Period; provided always, that if any of the Reference Banks fails so to
 communicate a rate, Libor shall be determined by reference to the rate or
 rates offered by the remaining Reference Bank or Reference Banks;

4

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Reference Banks shall mean Deutsche
 Schiffsbank Aktiengesellschaft, The Royal Bank of Scotland, Plc. and Barclays
 Bank Plc.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|5.3 | The Borrower
 may by written notice to the Bank not later than 11:00 a.m. (Hamburg time)
 three (3) Banking Days prior to the Drawdown Date and thereafter on the
 second Banking Day prior to the commencement of each Interest Period select
 at its option in relation to the Loan (but not in relation to a part thereof)
 whether the length of the ensuing Interest Period shall be of three (3), six
 (6) or twelve (12) months or request an Interest Period of a different
 duration to which the Bank, in this case at its option, may agree.                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|5.4 | If the
 Borrower fails to make a selection or request in respect of an Interest
 Period in accordance with the provisions of this Clause, the Borrower shall
 be deemed to have selected for such an Interest Period either a duration of
 six (6) months or, in case that funds in the amount of the Loan are not
 available for six (6) months, any other of the aforesaid periods which the
 Bank may reasonably and in good faith determine.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|5.5 | The first
 Interest Period in respect of the Loan shall commence on the Drawdown Date
 and subsequent Interest Periods shall commence forthwith upon the expiry of
 the previous Interest Period. Interest shall be calculated on the Loan as
 from the commencing date of each Interest Period to the last day of such
 Interest Period and shall be paid on the last day of such Interest Period or,
 in the case of Interest Periods of more than six (6) months, by instalments,
 the first such instalment being payable six (6) months from the commencement
 of the Interest Period and the subsequent instalments at intervals of six (6)
 months thereafter or, if shorter, the period from the date of the preceding
 instalment until the last day of the relevant Interest Period.                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|5.6 | In the event
 that a Repayment Instalment or Instalments (as such terms are defined
 hereinafter) fall due on a day of an Interest Period other than the last day
 of such an Interest Period, the Interest to be paid by the Borrower in
 relation to such an Interest Period shall be the aggregate of (i) the
 interest accruing on the Repayment Instalment or Instalments from the
 beginning of such Interest Period to the date when each such Repayment
 Instalment was made and (ii) the Interest accruing on the balance of the Loan
 (namely the amount of the Loan outstanding after the Repayment Instalment or
 Instalments have been made) from the date when the last such Repayment
 Instalment was made during the Interest Period in question to the last day of
 such an Interest Period.                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                
|5.7 | In the event
 that the Borrower fails to pay on its due date any amount payable under this
 Agreement (other than of disbursements and expenses referred to in Clause
 9.5) the Borrower shall pay interest (hereinafter Default Interest) on such sum, on demand, from the due
 date thereof up to the date of actual payment, at a rate (hereinafter Default Rate) determined by the Bank to
 be the aggregate of (i) two per centum (2%) p.a. and (ii) the funding cost of
 the Bank. If for the reason specified in Clause 5.8(b) the Bank is unable to
 determine a rate in accordance with the provisions of this Clause 5.7, the
 Default Interest on any sum not paid on its due date for payment shall be
 calculated at a rate determined to be one and one half per centum per annum
 (1-1/2%) above the aggregate of (i) the Margin and (ii) the cost of funds to
 the Bank.

5

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|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.8  | If two
 Banking Days, prior to the commencement of an Interest Period, including the
 initial Interest Period, the Bank shall reasonably determine (such reasonable
 determination to be conclusive and binding upon the Borrower) that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the Loan
 Currency will not be available to the Bank in such amounts as are required
 for the funding of the Loan or the relevant part thereof for such Interest
 Period, or                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | by reason of
 changes affecting the London Interbank Eurocurrency Market adequate and fair
 means do not exist for ascertaining Libor, or                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the applicable
 currency regulations do forbid, aggravate or restrict the granting or
 maintaining of the Loan or the relevant part thereof in the Loan Currency, or                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the rate at
 which deposits in the Loan Currency are offered by the Reference Banks to prime
 banks in London doesnt accurately reflect the cost of the Bank of making or
 maintaining the Loan or the relevant part thereof during such Interest
 Period,
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|     | then the
 Bank shall forthwith give notice thereof to the Borrower, and the Borrower
 and the Bank shall enter into negotiations in order to find a mutually
 satisfactory alternative basis for the advance or, as the case may be, the
 continuation of the Loan. This alternative basis may include alternative
 currencies, alternative interest rates or alternative interest periods, but
 shall include a margin above the cost of the funds to the Bank equal to the
 Margin. If within thirty (30) days from the notice of the Bank being received
 by the Borrower the parties hereto have not agreed on any such alternative
 basis, the Loan shall be (i) if not advanced, cancelled or (ii) if advanced,
 repaid. The Borrower shall have the right to repay the Loan, without premium
 or penalty, on the last day of such thirty-days or, if agreed by the parties
 hereto, earlier, together with accrued interest thereon calculated on a daily
 basis from the expiry of the Interest Period in question up to the date of
 such repayment at a rate being the aggregate of (i) the Margin, (ii) the
 rate, or arithmetic means of rates, at which the Bank was able to fund the
 Loan from time to time during the period of negotiations and (iii) all other
 amounts due under this Agreement, the Master Agreement and the other Security
 Documents.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|5.9  | Interest and
 Default Interest shall be calculated on the basis of exact number of days
 elapsed and a year of 360 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|5.10 | The Borrower
 may, for the purpose of managing interest rate risks, request the Bank to
 enter into the Master Agreement with the Borrower, pursuant to which the
 Borrower may enter into Transactions (as such term is to be defined in the
 Deutscher Rahmenvertrag) with the Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|6.   | REPAYMENT - PREPAYMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                            
|6.1  | The Loan
 shall be repaid by (i) thirty (30) consecutive semi-annual Repayment
 Instalments, commencing with the first Repayment Instalment on the date
 falling six (6) months from the Drawdown Date; each of such Repayment
 Instalments shall be in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

6

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | amount of
 $1,820,000 (One million eight hundred twenty thousand Dollars) and (ii) by an
 additional payment of $2,000,000 (Two million Dollars) (the Balloon Instalment) which shall be
 payable together with the last Repayment Instalment one hundred and eighty
 (180) months from the Drawdown Date (the Final
 Maturity Date);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Provided
 always, that on the Final Maturity Date the Borrower
 shall pay to the Bank any and all amounts then outstanding or payable under
 this Agreement, the Master Agreement and the other Security Documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In this
 Agreement Repayment Instalments
 shall mean the thirty (30) consecutive semi-annual instalments described in
 this Clause 6.1 and in the singular shall mean any of them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6.2 | The Borrower
 may prepay without premium or penalty the whole or any part of the Loan on
 the last day of any Interest Period relating thereto, provided that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the Bank
 shall have received from the Borrower not less than 10 Banking Days prior
 written notice of its intention to make such prepayment;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the amount
 of any such partial prepayment shall be equal to the amount of a Repayment
 Instalment or a higher integral multiple thereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | no amount
 prepaid can be re-borrowed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | each
 prepayment shall be made together with accrued interest on the amount prepaid
 and all other sums payable thereon under the terms of this Agreement and if
 such prepayment is not made on the last day of an Interest Period relating to
 the amount prepaid together with any loss the Bank has suffered as a result
 of such a prepayment being made on a date other than the last day of an
 Interest Period and, for the purpose of this Clause, shall mean the
 difference between the applicable LIBOR for the relevant Interest Period and
 the interest rate the Bank may obtain by depositing the amount so prepaid;
 and
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the amount
 of any such partial prepayment shall be applied against the Repayment Instalments
 outstanding, at the time of such prepayment in direct order of maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6.3 | In case the
 Vessel becomes a Total Loss or suffers damage or is involved in an incident
 which may, in the reasonable opinion of the Bank, result in the Vessel being subsequently
 determined to be a Total Loss (i) prior to the Drawdown Date, this Agreement
 shall be cancelled or (ii) in case the Loan has been already advanced, the
 Borrower shall prepay the Loan, without penalty, premium or prepayment fee,
 within one hundred and twenty (120) days of such Total Loss or, as the case
 may be, after the date on which the incident which may, in the reasonable
 opinion of the Bank, result in the Vessel being subsequently determined to be
 a Total Loss occurred or, if earlier, on the date upon which the insurance
 proceeds in respect of such Total Loss arc or Requisition Compensation is
 received by the Borrower (or the Bank pursuant to the Security Documents),
 together with accrued interest to the date of prepayment and all other sums
 including, without limitation, any

7

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|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | amounts
 payable by the Borrower to the Bank under this Agreement, the Master
 Agreement and the other Security Documents. For the purpose of this Agreement
 a Total Loss shall he deemed to have occurred:                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (a)                                                                                                                                                                                                                                                                                                              | in the case
 of an actual total loss of the Vessel, on the actual date and at the time the
 Vessel was lost or, if such date is not known, on the date the Vessel was
 last reported;                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (b)                                                                                                                                                                                                                                                                                                              | in the case
 of constructive total loss of the Vessel, on the actual date and at the time
 notice of abandonment of the Vessel is given to the insurers of the Vessel
 for the time being, (provided a claim for total loss is admitted by such
 insurers) or, if such insurers do not admit such a claim, at the date and at the
 time at which a total loss is subsequently and finally adjudged by a
 competent court of law to have occurred;       
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (c)                                                                                                                                                                                                                                                                                                              | in the case
 of a compromised or arranged total loss, on the date upon which a binding
 agreement as to such compromised or arranged total loss has been entered into
 by the insurers of the Vessel;                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (d)                                                                                                                                                                                                                                                                                                              | in the case
 of requisition of title or other compulsory acquisition, on the date upon
 which the relevant requisition of title or other compulsory acquisition
 occurs (hereinafter Compulsory
 Acquisition); and                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (e)                                                                                                                                                                                                                                                                                                              | in the case
 of hijacking, theft, condemnation, confiscation capture, detention or seizure
 of the Vessel (other than where the same amounts to Compulsory Acquisition of
 the Vessel) by any government entity, which deprives the Borrower of the use
 of the Vessel, on the expiry of the period of sixty (60) days following the
 date upon which the relevant hijacking, theft, condemnation confiscation,
 capture, detention or seizure occurred.
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|7.  | FEES-COMMITMENT COMMISSION                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|7.1 | The Bank
 will charge to the Borrower an arrangement fee of $80,000 (Dollars Eighty
 thousand) which is due and payable on the Drawdown Date.                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8.  | PAYMENTS                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8.1 | Unless
 otherwise agreed by the Bank all moneys owed by the Borrower hereunder are payable
 in the currency in which they have become due and are payable free and clear
 of any deductions of whatsoever nature to such account and with such bank as
 the Bank shall notify to the Borrower from time to time.
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8.2 | The Borrower
 shall continue to be under its payment obligation pursuant hereto until the
 relevant amount due has been credited to the account notified by the Bank to
 the Borrower in accordance with Clause 8.1.                                                                                            
|    |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|8.3 | In case a
 payment date is not a Banking Day at the place where such payment is to be
 made then the payment shall be made on the first following Banking Day unless
 the first                                                                                                                                 

8

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|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | following
 Banking Day Calls in the next succeeding calendar month in which case the
 payment shall be made on the preceding Banking Day.                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|8.4 | All moneys
 received by the Bank under or pursuant to this Agreement and/or any of the
 other Security Documents shall be applied by the Bank in the following
 manner:                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                                                                                                                                                                                                                                                                         | firstly: in
 or towards payment of all unpaid fees and expenses which may be owing to the
 Bank under this Agreement, the Master Agreement or any of the other Security
 Documents;                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                         | secondly: in
 or towards payment of any arrears of interest owing in respect of the Loan or
 any part thereof,                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (c)                                                                                                                                                                                                                                                                                                                                                         | thirdly: in
 or towards repayment of the Loan;                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (d)                                                                                                                                                                                                                                                                                                                                                         | fourthly: in
 or towards payment to the Bank of the Master Agreement Liabilities:                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (e)                                                                                                                                                                                                                                                                                                                                                         | fifthly: in
 or towards payment of any loss suffered by reason of any such payment in
 respect of principal not being effected on the last day of the Interest
 Period relating to the part of the Loan repaid;                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (f)                                                                                                                                                                                                                                                                                                                                                         | sixthly: in
 or towards payment to the Bank of any other sums owing to it under any of the
 Security Documents; and                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (g)                                                                                                                                                                                                                                                                                                                                                         | seventhly:
 the surplus (if any) shall be paid to the Borrower or to whomsoever else may
 be entitled to receive such surplus.                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|9.  | COSTS, EXPENSES AND DAMAGES                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|9.1 | Subject to
 the provisions of this Agreement, the Borrower undertakes to pay to the Bank
 on demand:                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                                                                                                                                                                                                                                                                         | all
 reasonable expenses (including legal, printing and out-of-pocket expenses)
 incurred by the Bank in connection with the negotiation, preparation,
 execution and, where relevant registration of this Agreement, the Master
 Agreement and any of the other Security Documents (as hereinafter defined);
 and                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                         | all
 reasonable expenses (including legal and out-of-pocket expenses) incurred by
 the Bank in contemplation of, or preservation of any rights under, this
 Agreement, the Master Agreement and/or any of the other Security Documents
 (as hereinafter defined), or otherwise in respect of the moneys owing under
 this Agreement, the Master Agreement and/or any of the other Security
 Documents (as hereinafter defined).
|    |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                
|9.2 | The Borrower
 shall bear all state and local taxes and dues which are levied outside the Federal Republic of Germany on the
 capital, the repayments, the interest and other payments, today or in future
 related to this Loan. This provision concerns all taxes and dues of any kind,
 whether of direct or indirect personal or real character (as e.g.

9

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | withholding
 tax, income tax, capital tax, trade tax and turnover tax), whether they are
 levied on any payment made by the Borrower to the Bank under and in
 accordance with the terms of this Agreement and/or the Master Agreement
 and/or any of the other Security Documents (as hereinafter defined) or on the
 property mortgaged to the Bank by the Borrower for reason of any legal or
 real events (herein collectively referred to as taxes). This provision must be understood in its broadest
 sense so as to entitle the Bank which fixes the rate of interest without
 regard to any non-German taxes, to pass on to the Borrower any taxes accruing
 outside the Federal Republic of Germany. Such taxes and dues will be charged to
 the Borrower also if for reason of any legal or authoritative regulations
 they are to be collected from the Bank. Such taxes and dues collected from
 the Bank must be reimbursed by the Borrower within thirty (30) days after it
 is informed to this effect. Any failure of the Borrower to remit to the Bank
 full payments required hereunder for any reason whatsoever shall constitute a
 default far non-payment as defined under Clause 13.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.3 | Within
 thirty days of each payment by the Borrower hereunder of tax or in respect of
 taxes, the Borrower shall deliver to the Bank evidence satisfactory to the
 Bank (including all relevant tax receipts) that such tax has been duly
 remitted to the appropriate authority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.4 | If the Bank
 should become liable to any tax (other than on overall income or aggregate
 property) or be subject to any reserve requirement against any assets of,
 deposits with or loans by the Bank or special deposit requirement the result
 of which will be to increase the cost to the Bank of making or maintaining
 the Loan or to reduce the amounts of moneys otherwise receivable by the Bank
 hereunder in either case by an amount the Bank shall deem material, then the
 Borrower will pay to the Bank on demand such additional interest on the Loan
 as will compensate the Bank for such additional cost or such reduction (as
 the case maybe).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.5 | All amounts
 so disbursed or expended by the Bank shall bear interest at 1% p.a. over the
 Banks funding cost from the 31st day after receipt of the
 relevant invoice by the Borrower until the time of refunding or repayment
 thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.6 | In case
 interest for the Loan has been fixed and the Borrower does not take the Loan
 or any part thereof or does not meet with the agreed conditions precedent set
 out in Clause 12 or the Bank for one of the reasons mentioned under Clause 13
 refuses disbursement of the Loan or the Bank prematurely demands repayment of
 the Loan or any part thereof in accordance with the terms of this Agreement,
 the Bank is entitled either to insist on performance or to withdraw from this
 Agreement and to claim damages for nonperformance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9.7 | The Borrower
 shall on demand (and it is hereby expressly undertaken by the Borrower to)
 indemnify the Bank, without prejudice to any of the other rights of the Bank
 under any of the Security Documents, against any expense or loss, which the
 Bank shall prove as sustained or incurred as a consequence of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

10

---



|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (a)                                                                                                                                                                                                                                                                                                                                          | in
 liquidating or employing deposits from third parties acquired or arranged to
 fund or maintain all or any part of the Loan and/or any overdue amount (or an
 aggregate amount which includes the Loan or any overdue amount); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | (b)                                                                                                                                                                                                                                                                                                                                          | in
 terminating, or otherwise in connection with, any interest and/or currency
 swap or any other transaction entered into (whether with another legal entity
 or with another office or department of the Bank) to hedge any exposure
 arising under this Agreement or that part which the Bank determines is thirty
 attributable to this Agreement of the amount of the liabilities, expenses or
 losses (including losses of prospective profits) incurred by it in
 terminating, or otherwise in connection with, a number of transactions of
 which this Agreement is one.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.  | SECURITIES                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.1 | To secure
 all its obligations under this Agreement and the Master Agreement, the
 Borrower shall execute and deliver and/or shall procure the execution and
 delivery to the Bank (as the case may he) of the following Security Documents
 (as hereinafter defined) and notices all to be substantially in form
 satisfactory to the Bank:
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | (a)                                                                                                                                                                                                                                                                                                                                          | Mortgage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                              | a first
 priority statutory Cyprus ship mortgage over the Vessel and the Deed of
 Covenant supplemental thereto (herein together referred to as the Mortgage).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | (b)                                                                                                                                                                                                                                                                                                                                          | Assignment
 of Vessels Insurances, Earnings and Requisition Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                              | In relation
 to the Vessel, a first priority assignment in respect of: (i) all claims and
 benefits under all insurance policies and Protection and Indemnity Insurances
 and the proceeds thereof which have been or will be arranged pursuant to the
 terms hereof and of the Mortgage. The Borrower shall execute and deliver
 notices of assignment and cause the Vessels insurers to attach such notice
 to the insurance policies; (ii) all charter hire, freights and other earnings
 or income or claims for income of the Vessel or any other amount due or to
 become due under any charter or other employment contract (including
 compensation or other indemnity) (herein Earnings);
 the Bank is entitled to notify such assignment to any relevant party at any
 time during the Security Period; and (iii) all sums of money or other
 compensation from time to time payable by reason of requisition for title or
 other compulsory acquisition of the Vessel, otherwise than by requisition for
 hire (all the aforesaid assignments hereinafter referred to as the General Assignment);
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | (c)                                                                                                                                                                                                                                                                                                                                          | Managers
 Undertaking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                              | an
 undertaking (the Managers Undertaking)
 to be executed by the Manager in favour of the Bank, whereby the Manager
 would agree to subordinate all and any claims it may have against the
 Borrower and/or the Vessel under the Management Agreement or otherwise, to
 the claims and rights of the Bank pursuant to this Agreement and the Master
 Agreement; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

11

---



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Account
 Pledge Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | an agreement
 to be made between the Borrower and the Bank for the creation of a pledge in
 favour of the Bank over the Pledged Account, in form to be agreed between the
 Bank and the Borrower (the Account Pledge
 Agreement).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Charterparty
 Assignments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | an
 assignment of (i) the time-charter entered into between the Borrower, as
 owner and Intermare Transport GMBH, of Hamburg, Germany, as charterer, dated
 13th July, 2007 providing for the employment of the Vessel until
 September, 2009, at a minimum net daily hire of $45,348 and (ii) the
 time-charter entered into between the Borrower, as owner and Dallchi Chuo
 Kisen Kaisha, of Tokyo, Japan, as charterer, dated 8th November,
 2007 providing for the employment of the Vessel from April 2010 until April,
 2015, at a minimum net daily hire of $33,733 (and shall include any addenda
 thereto) and after the termination thereof the assignment of any other any
 time or bareboat charterparty or contract of affreightment, agreement or
 related document in respect of the employment of the Vessel for a period for
 more than 12 months to be made between the Borrower and any charterer (and
 shall include any addenda thereto) on terms and conditions acceptable to the
 Bank, executed or (as the context may require) to be executed by the Borrower
 in favour of the Bank and in respect of each such charterparty the
 acknowledgement of notice of the assignment in respect thereof to be given by
 the relevant charterer (the Charterparty
 Assignments);
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | a guarantee
 and/or indemnity given or, as the context may require, to be given by SAFE BULKERS INC., of Marshall
 Islands (the Guarantor) as
 security for the Outstanding Indebtedness.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.2 | The
 Mortgage, the General Assignment, the Account Pledge Agreement, the Managers
 Undertaking, the Charterparty Assignments, the Guarantee, the Master
 Agreement and as the context may require this Agreement and any other
 documents which may now or hereafter be executed as security for the
 repayment of the Loan, interest thereon and Default Interest and any other
 moneys payable hereunder and under the Security Documents are herein
 collectively referred to as the Security
 Documents.                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.3 | The Borrower
 hereby undertakes that if the aggregate of (i) the market value of the Vessel
 as established by an expert valuer mutually accepted to the Bank and the
 Borrower at the end of December of each year during the Security Period
 (provided that any such valuation is considered necessary by the Bank) and (ii)
 the market value of any additional security for the time being actually
 provided to the Bank pursuant to Clause 10.3 (excluding the Pledged Deposit)
 falls below One hundred percent (100%) of the Loan during the first three (3)
 years of the loan period, at least One hundred ten percent (110%) of the Loan
 during the subsequent three (3) years of the loan period and thereafter below

12

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | One hundred
 and twenty percent (120%) of the Loan it will within fifteen days of being
 notified by the Bank to the Borrower of such shortfall either:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | provide the
 Bank with additional pledged cash deposits in favour of the Bank in an amount
 equal to such shortfall in an account and manner to be determined by the
 Bank; or                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | prepay
 (subject to, and in accordance with Clause 6) such part of the Loan as will
 ensure that the aggregate of (i) the market value (determined as aforesaid)
 of the Vessel and (ii) the market value of any such additional security is
 after such prepayment as set forth hereinabove in this Clause 10.3.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|11.  | INSURANCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|11.1 | The Borrower
 must at its cost and expense, and in accordance with the provisions of this
 Agreement and of the Mortgage, effect prior to Drawdown Date and maintain
 during the whole Security Period the insurances (herein Insurances) in respect of the Vessel on
 terms and conditions and with brokers and insurers acceptable to the Bank
 covering her market value but in any event in an amount not less than 115% of
 the Loan against:                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | hull and
 machinery marine and other associated risks in the London/New York/Japan and
 European Markets;                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | war risks
 with the Hellenic Mutual War Risks Association:                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | protection
 and indemnity (including the usual oil pollution as provided in Clause 5.1(b)
 of the Deed of Covenant referred to in Clause 10.1(a)) risks with a
 protection and indemnity association which is a member of the International Group
 of P&I Clubs;                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (when
 applicable) lay-up insurance                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|     | and
 otherwise as set forth in more detail in the Mortgage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|11.2 | At the
expense of the Borrower, the Bank will take out during the Security Period a
mortgagees interest insurance on the London Market and on conditions
acceptable to the Bank in an amount equal to 110% of the amount of the Loan,
provided however, that the cost of such insurance shall not exceed the cost
which the Borrower would have incurred, had the Borrower taken such insurance
on the same conditions of cover through its own London broker, and provided
further, that if the Bank decides to effect such insurance on other
conditions (German wording) the Bank shall pay the difference (if any) of the
cost of such insurance cover and the London market cover.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                  
|11.3 | If the
 Vessel navigates in an additional Premium Area as declared from time to
 time by the Hellenic Mutual War Risks Association or by insurance
 underwriters, the Borrower will (a) take out appropriate insurance cover and
 (b) notify the Bank. Failure of the Borrower to notify the Bank will not
 constitute an Event of Default.                                                                                                                                                                                                                                                                                                                                           

13

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|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | ----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12.  | AVAILABILITY                                                                                         
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|12.1 | The Loan
 will be made available as soon as the Borrower has complied with the
 following conditions:
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (a)                                                                                                   | the Borrower
 shall have accepted the terms hereof, such acceptance to be evidenced by the
 execution of this Agreement and, if the Borrower so requires, the Master
 Agreement by a duly authorised officer or attorney on the Borrowers behalf;                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (b)                                                                                                   | the Bank
 shall have obtained sufficient proof that the Borrower is duly constituted
 and is legally existing and in good standing pursuant to the laws of the
 place of its incorporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (c)                                                                                                   | the Bank
 shall have received (i) a copy, certified by the Secretary or the Assistant
 Secretary or a Director of the Borrower to be a true and complete copy, of
 (i) resolutions of the Board of Directors of the Borrower and resolutions of
 the shareholders of the Borrower and (ii) resolutions of the Board of Directors
 of the Guarantor, authorising execution of this Agreement and the Master
 Agreement and/or, as the case may be, the Security Documents to which each is
 or is to be a party as well as all other relevant documents and (ii) the
 original of any Power of Attorney issued by the Borrower and the Guarantor
 pursuant to the aforesaid resolutions;
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (d)                                                                                                   | the Bank
 shall have received evidence satisfactory to it that the Vessel is duly
 registered and documented in the name of the Borrower under Cyprus flag free
 and clear of any encumbrances, liens and debts of any kind or nature
 whatsoever with the exception of the Mortgage and the General Assignment;                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (e)                                                                                                   | the agreed
 Security Documents and notices referred to hereinabove have been duly
 executed by authorised signatories, registered in accordance with the
 relevant laws of the place of registration and delivered to the Banks
 lawyers;                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (f)                                                                                                   | the Bank
 shall have received evidence satisfactory to it, that the Insurances in
 respect of the Vessel have been effected in accordance with the provisions of
 this Agreement and the Mortgage and are in effect and that the interest of
 the Bank in respect of such Insurances has been duly noted;                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (g)                                                                                                   | the Bank
 shall have obtained copies of all class certificates in respect of the
 Vessel;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (h)                                                                                                   | the Bank or
 its lawyer shall have received evidence that all relevant governmental or
 quasi governmental approvals, consents or licenses as referred to herein or
 otherwise required in respect of the Loan and its repayment to the Bank have
 been obtained and are in full force and effect;                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (i)                                                                                                   | the Bank
 shall have received all such further documents including legal opinions as
 the Bank may deem reasonably necessary;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

14

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|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (j)                                                                                                                                                                                                                                                                                                                                                                         | the Bank
 shall have received a copy (duly certified to be a true and complete) of the
 management agreement (herein the Management
 Agreement) in respect of the Vessel entered into between the
 Borrower and the Manager; and                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (k)                                                                                                                                                                                                                                                                                                                                                                         | the Bank, if
 deemed necessary, shall have received a satisfactory to the Bank physical
 condition survey report on Vessel together with a comprehensive record
 inspection from a surveyor appointed by the Bank, at the Borrowers expense;
 and                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (l)                                                                                                                                                                                                                                                                                                                                                                         | the Bank
 shall have received the written confirmation (in terms satisfactory to the
 Bank) that the person named in Clause 24.5 has accepted its appointment by
 the Borrower, the Guarantor and the Manager as their agent for the acceptance
 of service of legal process in respect of any proceedings hereunder and under
 the Security Documents.                                                
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|13.  | EVENTS OF DEFAULT                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|13.1 | The Bank may
 by notice given to the Borrower declare that all amounts outstanding under
 this Agreement shall become immediately due and payable and any obligation of
 the Bank to make further advances shall cease automatically without any
 further act on the part of the Bank, if one or more of the following events
 (herein Event(s) of Default)
 shall occur:
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (a)                                                                                                                                                                                                                                                                                                                                                                         | if any
 Security Party fails to pay when is due any instalment of principal or
 interest or other sums payable hereunder; or                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (b)                                                                                                                                                                                                                                                                                                                                                                         | if any
 Security Party materially defaults in the performance or observance of any
 other obligation, covenant, agreement, term, undertaking, condition or
 provision contained in this Agreement, the Master Agreement and the other
 Security Documents and such default is not remedied within fourteen (14) days
 after it was brought to the Borrowers attention; or                             
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (c)                                                                                                                                                                                                                                                                                                                                                                         | if any
 representation or warranty made in this Agreement, the Master Agreement or in
 any of the other Security Documents or in any certificate, statement or other
 document delivered in connection with the execution and delivery hereof or
 thereof shall prove to have been incorrect in any material respect when made;
 or                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (d)                                                                                                                                                                                                                                                                                                                                                                         | if any
 Security Party becomes insolvent or bankrupt or becomes unable to pay its
 debts as they mature or makes any composition with or assignment for the
 benefit of its creditors or applies for or consents to or sustains the
 appointment of an insolvency trustee or receiver in respect of its assets or
 a substantial part thereof or ceases or threatens to cease to carry on
 business; or
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (e)                                                                                                                                                                                                                                                                                                                                                                         | if the Loan
 or any part thereof has not been utilised for its intended purpose; or                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (f)                                                                                                                                                                                                                                                                                                                                                                         | if the
 Vessel without prior written approval of the Bank is sold or otherwise
 disposed with or abandoned (with the exception of a Total Loss), during the
 Security Period; or                                                                                                                                                                                                                       

15

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|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (g)                                                                                                                                                                                        | if any other
 loan granted to any Security Party is in default; or                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (h)                                                                                                                                                                                        | if the
 Borrower fails to execute and deliver any amendment to the Mortgage or any
 Security Party fails to execute and deliver any amendment to any other
 Security Document to which is or is to be a party or other instrument
 reasonably judged necessary or expedient by the Bank to effectuate the intent
 of this Agreement to the satisfaction of the Bank; or                                                                                                                                                
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (i)                                                                                                                                                                                        | if it
 becomes unlawful for the Borrower to pay its debts under the relevant
 Security Document to which is or is to be a party ; or                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (j)                                                                                                                                                                                        | if the
 Mortgage does not receive the agreed priority or if its legal validity or
 priority is contested and defeated; or                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (k)                                                                                                                                                                                        | if any
 Security Partys assets pass to any person or company by way of universal
 succession without the prior written approval of the Bank; or                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (l)                                                                                                                                                                                        | if the class
 of the Vessel is suspended; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (m)                                                                                                                                                                                        | if the
 Borrower has not proved to the Bank within two weeks after being requested
 that maritime liens or rights of detention in respect of the Vessel or that
 all claims ranking in priority of a mortgage under any applicable law have
 been duly discharged and satisfied, unless such liens, rights of detention or
 claims are defended against in Court or sufficient security has been provided
 by the Borrower to the relevant third parties in respect of such liens, detention,
 rights and/or claims; or
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (n)                                                                                                                                                                                        | if without
 the prior written consent of the Bank, there is a change in the beneficial
 ownership, control of the Borrower and/or the Vessel or a change of the
 Manager,                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | provided
     however  that no demand by the Bank shall be required under this Clause
     13.1 if an Event of Default under  sub-Clause (d) of this Clause 13.1 shall
     have occurred.
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.  | REPRESENTATIONS AND WARRANTIES - COVENANTS                                                                                                                                                
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.1 | The Borrower
 hereby represents and warrants that:                                                                                                                                        
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (a)                                                                                                                                                                                        | the
 execution and delivery by the Borrower, the Guarantor and by any other party
 (other than the Bank) of this Agreement, the Master Agreement and the
 Security Documents to which each is or is to be a party is within the
 respective partys corporate authority, has been duly authorised by proper
 corporate action and does not and will not contravene any provision of any
 applicable law or of the respective partys statutes or of any agreement
 binding upon it;                                    
|     |                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | (b)                                                                                                                                                                                        | each
 Security Party has obtained all approvals and consents from all relevant
 governmental and quasi-governmental authorities necessary under any
 applicable law for the execution and delivery by it of this Agreement, the
 Master Agreement, the Security Documents to which is or is to be a party and
 of any document or                                                                                                                                                                                      

16

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | instrument
 delivered or to be delivered pursuant hereto and thereto and for the
 performance by it of any and all of its obligations hereunder and thereunder;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (c) | to the
 knowledge of the Borrowers directors, there are no actions, suits or
 proceedings pending or threatened to be taken against, or affecting any
 Security Party or its property before any court or tribunal or before any
 governmental or quasi-governmental authority nor is any Security Party in
 default with respect to any order, writ, injunction, claim or demand of any
 court or any governmental or quasi-governmental authority, which may, in both
 the abovementioned cases, substantially affect its solvency or its ability to
 pay its debt or perform its obligations or affect a substantial part of its
 property;                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | this
 Agreement, the consummation of the transactions herein contemplated and the
 fulfilment of the terms hereof and the compliance by each Security Party with
 all of the terms and conditions of this Agreement, the Master Agreement and
 the Security Documents to which is or is to be a party and all documents and
 instruments referred to herein and/or delivered pursuant hereto or thereto
 will not result in any breach by it of the terms, conditions or provisions
 of, or constitute a default under its corporate papers, any indenture, a bank
 loan or credit agreement or instrument by which any Security Party is bound
 and will not result in the creation of any lien, charge or encumbrance (other
 than the Mortgage and the General Assignment) upon any of its property or
 assets;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (e) | each
 Security Party is duly incorporated and legally existing and in good standing
 under the law of the place of its incorporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (f) | the Borrower
 will not engage itself in any further business resulting in any obligation
 whatsoever other than those incurred in the ordinary course of its business
 or in connection with the operation of the Vessel;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (g) | any
 proceedings taken in relation to this Agreement, the Master Agreement and the
 other Security Documents, the choice of the laws as outlined in Clause 24 and
 any judgment obtained in relation to this Agreement will be recognised and
 enforced;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | to the
 extent that it may in any relevant jurisdiction claim for itself or its
 assets immunity from suit, execution, attachment (whether in aid of
 execution, before judgment or otherwise) or other legal process and to the
 extent that in any such jurisdiction there may be attributed to itself or its
 assets such immunity (whether or not claimed) the Borrower hereby irrevocably
 agrees not to claim and hereby irrevocably waives such immunity to the full
 extent permitted by the laws of such jurisdiction;                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | except with
 the prior consent of the Bank, none of the Security Parties (other than the
 Guarantor) will, either by single transaction or by a series of transactions
 whether related or not and whether voluntarily or involuntarily, entered
 into, sell, transfer, lease or otherwise dispose of all or of a substantial part
 of its assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                

17

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|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | ------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (j)                                                                                                                 | except with
 the prior consent of the Bank, none of the Security Parties will enter into
 any amalgamation or merger with any other party or do or consent to be done
 anything analogous to the foregoing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (k)                                                                                                                 | the Borrower
 is the beneficiary within the meaning of section 8 of the German Money
 Laundering Act (Gesetz gegen das Aufspüren von Gewinnen aus schweren
 Strafttaten or Geldwäschegesetz) for each part of the Loan made or to be
 made available to it and it will promptly inform the Bank by written notice
 if it is not, or ceases to be, the beneficiary and notify the Bank in writing
 of the name and the address of the new beneficiary/beneficiaries; the
 Borrower is aware that under applicable money laundering provisions, they
 have an obligation to state for whose account the Loan is obtained; the
 Borrower confirms that, by entering into this Agreement and the other
 Security Documents, it is acting on its own behalf and for its own account
 and it is obtaining the Loan for its own account. In relation to the
 borrowing by the Borrower of the Loan, the performance and discharge of its
 obligations and liabilities under this Agreement or any of the other Security
 Documents and the transactions and other arrangements effected or contemplated
 by this Agreement or any of the other Security Documents to which the
 Borrower is a party, it is acting for its own account and that the foregoing
 will not involve or lead to a contravention of any law, official requirement
 or other regulatory measure or procedure which has been implemented to combat
 money laundering (as defined in Article 1 of the Directive (91/308/EEC) of
 the Council of the European Community); and
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (l)                                                                                                                 | it has
 complied with all legal, quasi-legal or other requirements (including
 compliance with the provisions of the ISM Code) relative to or imposed upon
 its business and/or the Vessel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14.2 | The above
 representations and warranties shall he deemed repeated as of each date
 throughout the Security Period.
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14.3 | The Borrower
 hereby covenants and undertakes with the Bank to immediately notify the Bank
 if:                    
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (a)                                                                                                                 | the
 Borrowers entire business is substantially reduced, the operation of the
 Vessel is suspended or laid-up for more than two months or a change in the Vessels
 management occurs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (b)                                                                                                                 | the Vessel
 is deleted from her present ships register or loses the right to fly the
 flag of her home country;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (c)                                                                                                                 | the Vessel
 is arrested or put to public auction or the Borrower otherwise wholly or
 partly loses its power of disposal of the Vessel;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (d)                                                                                                                 | the Vessel
 becomes involved in maritime or other court proceedings or is being
 encumbered with a mortgage by court order;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

18

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|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (e)                                                                                                                                                                                                                           | the Vessel
 sustains an average damage or has been salvaged from distress at sea or has
 made use of third party assistance;                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (f)                                                                                                                                                                                                                           | maritime
 liens, a right of retention or claims due under ship mortgages are put
 forward against the Vessel;                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (g)                                                                                                                                                                                                                           | the Vessel
 has become a Total Loss (as defined in the Mortgage), has been abandoned or
 becomes unworthy for repair; and                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (h)                                                                                                                                                                                                                           | the Vessel
 has lost her assisted classification.                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|14.4 | The Borrower
 hereby undertakes with the Bank that as and from the date of this Agreement
 and throughout the Security Period, without the prior written consent of the
 Bank (not to be unreasonably withheld) the Borrower:
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (a)                                                                                                                                                                                                                           | shall not
 incur or agree to incur any indebtedness or material liability (whether by
 way of loan, credit facilities or otherwise) nor shall it make any
 commitments other than those occurring in the ordinary course of the trading
 or the management of the Vessel;                                                                 
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (b)                                                                                                                                                                                                                           | subject to
 Clause 13.1(m), shall not issue or agree to issue or procure the issue of any
 guarantee in favour of any person or legal entities other than in connection
 with the ordinary trading and operation of the Vessel;                                                                                                           
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (c)                                                                                                                                                                                                                           | shall not
 mortgage, charge or otherwise encumber the Vessel, her Insurances or her
 Earnings or any of its other assets or rights other than in favour of the
 Bank;                                                                                                                                                                     
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (d)                                                                                                                                                                                                                           | shall not
 issue any further shares in its capital;                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (e)                                                                                                                                                                                                                           | so long as
 an Event of Default has occurred and is continuing, shall not declare or pay
 any dividends upon any of its outstanding shares or stock or otherwise
 dispose of any assets to any of its shareholders in cash or in any other
 manner;                                                                                       
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (f)                                                                                                                                                                                                                           | shall not
 pay out of its funds to any company or person except in connection with the
 administration of the Borrower, the management and the operation and/or
 repair of the Vessel or the servicing of the Loan or as otherwise permitted
 by or pursuant to this Agreement and the relevant Security Document to which
 it is a party;
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (g)                                                                                                                                                                                                                           | shall not
 permit any change in the ownership of its share capital (or any part thereof)
 and/or any change in the ownership or the management of the Vessel; and                                                                                                                                                                         
|     |                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                           
|     | (h)                                                                                                                                                                                                                           | shall not
 appoint as manager of the Vessel any person other than the Manager and then
 upon such terms and conditions as the Bank shall in its discretion approve.                                                                                                                                                                       

19

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|14.5 | The Borrower
 shall furnish the Bank as soon as practicable but not later than 180 days
 after the periods specified with:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | its annual,
 unaudited profit and loss accounts and balance sheets; and                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the
 unaudited quarterly and annual audited combined or consolidated profit and
 loss accounts and balance sheets of the Guarantor, prepared in accordance
 with generally accepted accounting principles consistently applied;
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|     | in each
 case, as soon as practicable but not later than 180 days after the end of the
 financial year concerned, prepared in accordance with generally accepted
 accounting principles consistently applied.                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|14.6 | The Borrower
 shall ensure that the Guarantor will observe and perform any and all
 covenants and undertakings contained in the Guarantee, including, but without
 limitation, those under clause 6.10 of the Guarantee.                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|14.7 | The Borrower
 shall procure that the Pledged Account be opened by the Borrower, as pledgor,
 and the Pledged Deposit be maintained therein throughout the Security Period.
 The amount of the Pledged Deposit for the time being standing to the credit
 of the Pledged Account shall bear interest at LIBOR plus Margin for deposits
 in Dollars for periods equal to the Interest Periods fixed for the Loan and
 in an amount comparable with the amount of the Pledged Deposit; such interest
 to be credited to the Pledged Account at the expiry of each such period and
 to be freely available to the Borrower.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|14.8 | The Borrower
 shall provide the Bank with such documents and evidence as the Bank shall
 from time to time require, based on law and regulations applicable from time
 to time and the Banks own internal guidelines applicable from time to time
 to identify the Borrower and the other Security Parties, including the
 ultimate legal and beneficial owner or owners of such entities, and any other
 persons involved in or affected by the transaction(s) contemplated by this
 Agreement.                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|15.  | JUDGEMENT CURRENCY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|15.1 | If for
 obtaining judgment in any court it is necessary or advisable for the Bank to
 convert any amount owed pursuant hereto into another currency then such
 conversion shall be deemed to be made at the rate of exchange prevailing the
 day before the Banks action is brought into court with prime banks in the
 country of such court.                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|15.2 | If in such
 case due to alterations of the exchange rate the amount finally received by
 the Bank shall be insufficient to cover the amount owed, then the Borrower
 shall pay to the Bank the amount required to compensate for such remaining
 debt.                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|16.  | WAIVERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                
|16.1 | No failure
 or delay on the part of the Bank to exercise any power or right hereunder
 shall operate as a waiver thereof, nor shall any single or partial exercise
 by the Bank of any such power or right preclude any other or further
 exercises thereof or the exercise of any                                                                                                                                                                                                                                                                                                                                     

20

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | other right.
 The remedies provided herein are cumulative and not exclusive of any remedies
 provided by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|17.  | INVALIDITY-INCREASED COST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|17.1 | In the event
 that this Agreement, the Master Agreement, the other Security Documents or
 any of the documents or instruments which may from time to time be delivered
 hereunder or thereunder or any provision thereof shall be deemed invalidated
 by present or future law of any nation or by decision of any court this shall
 not effect the validity and/or enforceability of all or any other part(s)
 hereof or thereof and in such case the parties shall execute and deliver such
 other and further agreements and/or any other documents and/or instruments
 and do such things as the Bank in its sole reasonable discretion may deem to
 be necessary to carry out the intent of this Agreement.                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|17.2 | If the
 result of (a) any change in, or in the interpretation or application of, or
 the introduction of, any law or any regulation, directive, request or
 requirement (whether or not having the force of law, but, if not having the
 force of law, with which the Bank or, as the case may be, its holding company
 habitually complies) by any governmental authority in any country the laws or
 regulations of which are applicable on the Bank or (b) compliance by the Bank
 with any request from any applicable fiscal or monetary authority (whether or
 not having the force of law, but, if not having the force of law, with which
 the Bank or, as the case may be, its holding company habitually complies),
 including (without limitation) those relating to Taxation, stock or capital
 adequacy, any type of liquidity, reserve assets, cash ratio deposits and
 special deposits or other banking or monetary controls or requirements which
 affects the manner in which the Bank allocates capital resources to its
 obligations hereunder, is to:
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | the cost to
 the Bank of making the Loan or any part thereof or maintaining or funding the
 Loan is increased or an additional cost on the Bank is imposed; and/or                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | subject the
 Bank to taxes or change the basis of taxation (other than taxes or taxation
 on the overall net income of the Bank) in respect of any payments to the Bank
 under this Agreement or any of the other Security Documents is changed;
 and/or
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | the amount
 payable or the effective return to the Bank under any of the Security
 Documents is reduced; and/or                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | the Banks
 rate of return on its overall capital by reason of a change in the manner in
 which it is required to allocate capital resources to the Banks obligations
 under any of the Security Document is reduced; and/or                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                         
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | require the
 Bank to make a payment or forgo a return on or calculated by references to
 any amount received or receivable by it under any of the Security Documents
 is required; and/or                                                               

21

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | require the
 Bank to incur or sustain a loss (including a loss of future potential
 profits) by reason of being obliged to deduct all or part of the Loan from
 its capital for regulatory purposes,
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|     | then and in
 each case the Borrower shall pay to the Bank, from time to time, upon demand,
 such additional moneys as shall indemnify the Bank for any increased or
 additional cost, reduction, payment, foregone return or loss whatsoever.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|17.3 | The Bank
 will promptly notify the Borrower of any intention to claim indemnification
 pursuant to Clause 17.2 and such notification will be a conclusive and full
 evidence binding on the Borrower as to the amount of any increased cost or
 reduction and the method of calculating the same. A claim under Clause 17.2
 may be made at any time and must be discharged by the Borrower within seven
 (7) days of demand. It shall not be a defence to a claim by the Bank under
 this Clause 17.2 that any increased cost or reduction could have been avoided
 by the Bank. Any amount due from the Borrower under this Clause 17.3 shall be
 due as a separate debt and shall not be affected by judgement being obtained
 for any other sums due under or in respect of this Agreement.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|17.4 | If any
 additional amounts are required to be paid by the Borrower to the Bank by
 virtue of Clause 17.2, the Borrower shall be entitled, on giving the Bank not
 less than five (5) days prior notice in writing, to prepay the Loan and
 accrued interest thereon, together with all other Outstanding Indebtedness on
 the fifth (5th) day from the date of receipt of such notice by the
 Bank. Any such notice, once given, shall he irrevocable.                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|18.  | SURVIVAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|18.1 | All of the
 covenants, representations and warranties made herein, in the Security
 Documents or in any of the documents or instruments executed and/or delivered
 pursuant hereto shall survive the making of the Loan and shall be binding
 upon the Borrower until all obligations of the Borrower arising pursuant to
 the terms hereof and thereof have been paid and performed in full.                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|19.  | FURTHER ASSURANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|19.1 | The Bank
 reserves the right to obtain legal opinions from its counsel in any relevant
 country (always at the expense of the Borrower) as to the validity and
 enforceability of this Agreement, the Master Agreement, the other Security
 Documents and all documents and instruments delivered pursuant thereto and
 the Borrower agrees and undertakes to take all such steps and actions
 including, but not limited to, any alterations to this Agreement, the Master
 Agreement, and any of the other Security Documents or any other documents or
 instruments relating thereto as may be deemed necessary by such opinion or
 opinions.                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|20.  | NOTICES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                     
|20.1 | All
 statements, requests, consents and other notices (hereinafter called Notices) hereunder shall be in writing
 (letter or fax) in English language;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

22

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|20.2 | Notices
addressed to either of the parties hereto shall be deemed to be received by
the relevant party when received, however, in the case of a letter seven days
after despatch and in the case of a facsimile with a confirmation report, on
the same day, provided, always, that in the case of a facsimile, same was
sent on a Banking Day during office hours.                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|20.3 | If the date
 of despatch was not a Banking Day or the time of despatch was not during
 office hours such facsimile shall be deemed to have been received at the
 opening of business on the next Banking Day.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|20.4 | Notices to
 the Borrower shall be addressed to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | SAFE BULKERS INC.32 Avenue Karamanli,
 POBox 70837, GR 16605 Voula,
 Athens, Greece
 Telefax No.: 30210 895 6900
 (Attention: Chief Financial Officer)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|20.5 | Notices to
 the Bank shall be addressed to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | DEUTSCHE SCHIFFSBANK AGDomshof 17
 28195 Bremen
 Federal Republic of Germany
 Telefax No.: 0049 421 3609 293                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|21.  | ASSIGNMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|21.1 | The Borrower
may not assign all or any part of its rights or obligations hereunder without
the prior written consent of the Bank. The Bank is entitled to assign all or
any part of its rights hereunder, provided that the Bank shall have received
the prior written consent of the Borrower for any such assignment, provided
always, that (i) the Borrower shall not be responsible for any costs or
expenses arising in connection with the Bank effecting any such assignment
and (ii) any assignee of the Bank shall only be entitled to the benefit of
the provisions of Clauses 9.2 or 9.4 to the same extent that the Bank would
have been had no such assignment been made.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|22.  | MISCELLANEOUS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|22.1 | The Borrower
 has to procure translation made by a sworn or certified translator of all
 documents which are not available in English or German language.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|22.2 | The terms
 and conditions of the Security Documents shall apply and are deemed to be an
 integral part of this Agreement, however, in case of conflict this Agreement
 shall prevail.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Bank
 shall maintain in accordance with _______ practice a loan account evidencing
 the amounts from time to time borrow ________ ower, owing to the Bank (in the
 Loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

23

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Currency),
 and paid to the ________spect of principal, interest or otherwise) hereunder
 and under ___________.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|22.3 | A person who
 is not a party t______ent has no right under the Contracts (Rights of Third
 Parties) Act 199 ______orce or to enjoy the benefit of any term of this
 Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|23.  | CHANGE OF LAW                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|23.1 | If the
 introduction of or any change in any applicable law, treaty or regulation or
 in the interpretation thereof by any authority charged with the
 administration thereof shall make it unlawful for the Bank to maintain, fund
 or perform its obligations under this Agreement then the Bank shall forthwith
 give notice thereof to the Borrower whereupon the Bank will be discharged
 from its obligations under this Agreement and the Borrower shall, on demand
 by the Bank, prepay the Loan, if permitted by applicable law, (i) at the end
 of the then current Interest Period or (ii) on the next day on which a
 payment under this Agreement is due, whatever is the earlier, together with
 accrued interest thereon and any other unpaid amounts due to the Bank
 hereunder.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.  | APPLICABLE LAW                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.1 | This
 Agreement shall be governed by, and construed in accordance with, English
 law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.2 | Subject to
 Clause 24.4, the courts of England shall have exclusive jurisdiction in
 relation to all matters which may arise out of or in connection with this
 Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.3 | The Borrower
 shall not commence any proceedings in any country other than England in
 relation to a matter which arises out of or in connection with this
 Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.4 | Clause 24.2
 is for the exclusive benefit of the Bank which reserves the rights:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | to commence
 proceedings in relation to any matter which arises out of or in connection
 with this Agreement in the courts of any country other than England and which
 have or claim jurisdiction to that matter; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | to commence
 such proceedings in the courts of any such country or countries concurrently
 with or in addition to proceedings in England or without commencing
 proceedings in England.                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.5 | The Borrower
 irrevocably appoints Mr. Savvas Savvides, 24 Exeter Road, London N14 5JY,
 England (tel/fax: +44 208 361 2606), to act as its agent to receive and
 accept on their behalf any process or other document relating to any
 proceedings in the English courts which are connected with this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                       
|24.6 | In this
 Clause 24, proceedings means
 proceedings of any kind, including an application for a provisional or
 protective measure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

24

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|    |          
|--- | ---------
|25. | EXECUTION

IN WITNESS
WHEREOF the parties hereto have caused this Agreement to be duly executed by
their duly authorised officers or attorneys as of the day and year first above
written.

|                                        |                                |                 |  | 
|--------------------------------------- | ------------------------------ | --------------- |  | 
|SIGNED by                               | )                              |                 | 
|Mr. George
 Papadopoulos                | )                              |                 | 
|for and on
 behalf of                   | )                              |                 | 
|the Borrower                            | )                              |                 | 
|STALOUDI SHIPPING CORPORATION,          | )                              |                 | 
|of Liberia
 in the presence of:         | )                              | Attorney-at-law | 
|                                        |                                |                
|Witness:                                |                                |                 | 
|Name:                                   | Angela C.
 Arcadis             |                 | 
|Address:                                | 13 Defteras
 Merarchias Street |                 | 
|                                        | Piraeus 185
 35, Greece        |                 | 
|Occupation:                             | Attorney-at-law                |                 | 
|                                       
|SIGNED by                               | )                              |                
|Mr.
 Aristeides D. Vourdas              | )                              |                
|for and on
 behalf of                   | )                              |                
|                                        | )                              |                
|DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT | )                              |                 | 
|in the
 presence of:                    | )                              | Attorney-at-law | 
|                                        |                                |                
|Witness:                                |                                |                 | 
|Name:                                   | Angela C.
 Arcadis             |                 | 
|Address:                                | 13 Defteras
 Merarchias Street |                 | 
|                                        | Piraeus 185
 35, Greece        |                 | 
|Occupation:                             | Attorney-at-law                |                 | 

25

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SCHEDULE 1

NOTICE OF DRAWING

|    |                                         |               
|--- | --------------------------------------- | --------------
|To: | DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT |               
|    | Domshof 17,
 28195 Bremen,              |               
|    | Federal
 Republic of Germany            |               
|    | (the Bank)                            |               
|    |                                         | [●] June, 2008

RE: Loan Agreement dated[●]June, 2008 made between (1) STALOUDI SHIPPING
CORPORATION, of Liberia
(the Borrower) and (b) the Bank in respect of a loan facility of up to
US$56,600,000 (the Loan Agreement).

---

We refer to
the Loan Agreement and hereby give you notice that we wish to draw the Loan in
the amount of US$56,600,000 (United States Dollars Fifty six million six
hundred thousand on [●], 2008
and we select a first Interest Period in respect of the Loan of . months. The
funds should be remitted to . [name and
number of account] with ., New York, USA.

We confirm
that:

|    |                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | no event or
 circumstance has occurred and is continuing which constitutes an Event of
 Default;                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                   
|(b) | the
 representations and warranties contained in Clause 14 of the Loan Agreement
 and the representations and warranties contained in each of the other
 Security Documents are true and correct at the date hereof as if made with
 respect to the facts and circumstances existing at such date;
|    |                                                                                                                                                                                                                                                                                                   
|(c) | the
 borrowing to be effected by the drawing of the Loan will be within our
 corporate powers, has been validly authorised by appropriate corporate action
 and will not cause any limit on our borrowings (whether imposed by statute,
 regulation, agreement or otherwise) to be exceeded; and  
|    |                                                                                                                                                                                                                                                                                                   
|(d) | to the best
 of our knowledge and belief there has been no material adverse change in our
 financial position or in the consolidated financial position of ourselves and
 the other Security Parties from that described by us to the Bank in the
 negotiation of the Loan Agreement.             

Words and
expressions defined in the Loan Agreement shall have the same meanings when
used herein.

|                                 |   |                
|-------------------------------- | - | ---------------
|SIGNED by                        | ) |                
|Mr. George
 Papadopoulos         | ) |                
|for and on
 behalf of            | ) |                
|the Borrower                     | ) |                
|STALOUDI SHIPPING CORPORATION    | ) |                
|of Liberia,
 in the presence of: | ) | Attorney-at-law

26

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