Exhibit 4.54

|      |     
|----- | ----
|DATED | 2008
|     

SAFE BULKERS INC.
- to -
DnB NOR BANK ASA

|                       
|-----------------------
|                       
|                       
|GUARANTEE AND INDEMNITY
|                       
|                       

STEPHENSON HARWOODOne, St Pauls Churchyard
London EC4M 8SH
Tel: +44 020 7329 4422
Fax: +44 020 7329 7100
(Ref: 04.142)

---



CONTENTS

|   |                                        |  |     
|-- | -------------------------------------- |  | ----
|   |                                        |  | Page
|  
|1  | Definitions
 and Interpretation        |  | 2   
|  
|2  | Representations
 and Warranties        |  | 4   
|  
|3  | Guarantee
 and Indemnity               |  | 5   
|  
|4  | Preservation
 of Guarantors Liability |  | 6   
|  
|5  | Preservation
 of Lenders Rights       |  | 8   
|  
|6  | Undertakings                           |  | 10  
|  
|7  | Payments                               |  | 12  
|  
|8  | Currency                               |  | 14  
|  
|9  | Set-Off                                |  | 15  
|  
|10 | Application
 of Moneys                 |  | 15  
|  
|11 | Partial
 Invalidity                    |  | 16  
|  
|12 | Further
 Assurance                     |  | 16  
|  
|13 | Miscellaneous                          |  | 16  
|  
|14 | Notices                                |  | 16  
|  
|15 | Counterparts                           |  | 17  
|  
|16 | Law and
 Jurisdiction                  |  | 17  

---



GUARANTEE AND INDEMNITY

Dated:                    2008

BY:

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)           | SAFE BULKERS INC., a company incorporated according to the law of the Republic of
Marshall Islands whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the Guarantor)                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|IN FAVOUR OF:
|             
|(2)           | DnB NOR BANK ASA, acting through its office at 20 St.
 Dunstans Hill, London EC3R 8HY,
 England (the Lender).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|WHEREAS:     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(A)           | The Lender
has agreed to lend to Efragel Shipping Corporation (the Borrower) an amount not exceeding forty two
million Dollars ($42,000,000) (the Loan)
on the terms and subject to the conditions set out in a secured
multi-currency reducing revolving credit facility agreement dated 11 January
2008 made between the Lender (as lender) and the Borrower (as borrower) (the Original Facility Agreement) as
amended and supplemented by a
supplemental agreement dated 22 May 2008 (the Supplemental Agreement and together with the Original
Facility Agreement as the same may be further amended, supplemented, replaced
and/or novated from time to time, the Facility
Agreement).
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(B)           | The Borrower
 and the Lender have also entered into, an ISDA Master Agreement together with
 the Schedule thereto, each dated 11 January 2008, pursuant to which the
 Borrower may enter into one or more Transactions the terms and conditions of
 which shall be specified in a Confirmation sent or to be sent by the Lender
 to the Borrower.                                                                                                                                                                                                                                                                                                                                                     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(C)           | The Borrower
 has informed the Lender that it wishes to enter into a series of transactions
 (the Reorganisation) as a result of which (a) the
 Borrowers shares will cease to be wholly owned by its present shareholders;
 (b) the Guarantor will own 100% of the Borrowers shares; and (c) the
 Borrowers ownership structure will change following the                                                                                                                                                                                                                                                                                                                                       

---



|    |                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | initial
 public offering of the common stock of the Guarantor on the New York Stock
 Exchange (the Offering).                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                   
|(D) | The Borrower
 has requested the Lender to proceed in amending, inter alia, clauses 13.2.17
 and 14.1.8 of the Original Facility Agreement, which would otherwise be
 breached upon the occurrence of the Reorganisation and the Offering, and to
 delete, inter alia, clause 13.2.14 and to amend, inter alia, clause 13.2.13
 of the Original Facility Agreement.
|    |                                                                                                                                                                                                                                                                                                                                                                   
|(E) | The Lender
 is willing to accede to such requests as listed in Recital D above and has
 agreed to amend the Original Facility Agreement and the Security Documents
 (as applicable) on the terms and conditions contained in the Supplemental
 Agreement.                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                   
|(F) | Pursuant to
 the Facility Agreement, and as a condition precedent to the obligation of the
 Lender to make the Loan available to the Borrower, the Borrower has, amongst
 other things, agreed to procure that the Guarantor execute and deliver this
 Guarantee and Indemnity in favour of the Lender.                                                           

THIS DEED WITNESSES
as follows:

|  |                                |                                                                                                                                                                                                                                                                                                  | 
|- | ------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|1 | Definitions and Interpretation
|  |                                |                                                                                                                                                                                                                                                                                                  | 
|  | 1.1                            | In this
 Guarantee and Indemnity:                                                                                                                                                                                                                                                               
|  |                                |                                                                                                                                                                                                                                                                                                  | 
|  |                                | Default Rate means interest at the rate
 calculated in accordance with clause 8.8 of the Facility Agreement.                                                                                                                                                                                  
|  |                                |                                                                                                                                                                                                                                                                                                  | 
|  |                                | GAAP means generally accepted accounting
 principles in the United States of America.                                                                                                                                                                                                         
|  |                                |                                                                                                                                                                                                                                                                                                  | 
|  |                                | Guarantors Liabilities means all of the
 liabilities and obligations of the Guarantor to the Lender under or pursuant
 to this Guarantee and Indemnity, from time to time, whether in respect of
 principal, interest, costs or otherwise and whether present, future, actual
 or contingent.
|  |                                |                                                                                                                                                                                                                                                                                                  | 
|  |                                | Indebtedness means the aggregate from
 time to time of: the amount of the Loan outstanding; all accrued and unpaid
 interest on the Loan; and all other sums of any nature (together with all
 accrued and unpaid interest on any of those sums)                                              

2

---



| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | payable by the Borrower to
 the Lender under all or any of the Finance Documents.                                                                                                                                                           
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| | 1.2 | Unless
 otherwise specified in this Guarantee and Indemnity, or unless the context
 otherwise requires, all words and expressions defined in the Facility
 Agreement shall have the same meaning when used in this Guarantee and
 Indemnity.
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| | 1.3 | In this
 Guarantee and Indemnity:                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.1                                                                                                                                                                                                                                        | words
 denoting the plural number include the singular and vice versa;                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.2                                                                                                                                                                                                                                        | words
 denoting persons include corporations, partnerships, associations of persons
 (whether incorporated or not) or governmental or quasi-governmental bodies or
 authorities and vice versa;                                        
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.3                                                                                                                                                                                                                                        | references
 to Clauses are references to clauses of this Guarantee and Indemnity;                                                                                                                                                      
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.4                                                                                                                                                                                                                                        | references
 to this Guarantee and Indemnity include the recitals to this Guarantee and
 Indemnity;                                                                                                                                     
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.5                                                                                                                                                                                                                                        | the headings
 and contents page(s) are for the purpose of reference only, have no legal or
 other significance, and shall be ignored in the interpretation of this
 Guarantee and Indemnity;                                           
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.6                                                                                                                                                                                                                                        | references
 to any document (including, without limitation, to any of the Finance
 Documents) are, unless the context otherwise requires, references to that
 document as amended, supplemented, novated or replaced from time to time;
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.7                                                                                                                                                                                                                                        | references
 to statutes or provisions of statutes are references to those statutes, or
 those provisions, as from time to time amended, replaced or re-enacted;                                                                        
| |     |                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                        
| |     | 1.3.8                                                                                                                                                                                                                                        | references
 to the Lender include its successors, transferees and assignees; and                                                                                                                                                       

3

---



|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                             | 1.3.9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | words and
 expressions defined in the Master Agreement, unless the context otherwise
 requires, have the same meaning.
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|2 | Representations and Warranties                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | The
 Guarantor represents and warrants to the Lender at the date of this Guarantee
 and Indemnity and, save for Clauses 2.4, 2.9 and 2.13, (by reference to the
 facts and circumstances then pertaining) on each day throughout the Facility
 Period that:
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.1                                                                                                                                                                                                                                                         | all
 representations and warranties given by the Borrower in the Facility
 Agreement in respect of the Guarantor and/or this Guarantee and Indemnity are
 and will remain correct and none of them is or will become misleading; and                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.2                                                                                                                                                                                                                                                         | the
 Guarantor is a corporation, duly incorporated and validly existing under the
 law of its jurisdiction of incorporation and has the power to own its assets
 and to carry on its business as it is being conducted; and                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.3                                                                                                                                                                                                                                                         | the
 Guarantor has the power to enter into and perform this Guarantee and
 Indemnity and has taken all necessary action to authorise its entry into and
 performance of this Guarantee and Indemnity; and                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.4                                                                                                                                                                                                                                                         | the
 Guarantor is not insolvent or in liquidation or administration or subject to
 any other formal or informal insolvency procedure, and no receiver,
 administrative receiver, administrator, liquidator, trustee or analogous
 officer has been appointed in respect of the Guarantor or all or any part of
 its assets; and                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.5                                                                                                                                                                                                                                                         | this
 Guarantee and Indemnity constitutes legal, valid, binding and enforceable obligations of the Guarantor; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                       
|  | 2.6                                                                                                                                                                                                                                                         | all
 consents, licences, approvals and authorisations of, or registrations with or
 declarations to, any governmental authority, bureau or agency which may be
 required in connection with the entry into, performance, validity or
 enforceability of this Guarantee and Indemnity have been obtained or made and
 remain in full force and effect and the Guarantor is not aware of any event
 or circumstance which could reasonably be expected adversely to affect the
 right of the Guarantor to hold and/or obtain renewal of any such consents,
 licences, approvals or authorisations; and

4

---



|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|- | ----------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  | 2.7                     | no litigation,
 arbitration or administrative proceeding of or before any court, arbitral
 body or agency which if adversely determined, might reasonably be expected to
 have a material adverse effect on the business or financial condition of the Guarantor have (to the best of the
 Guarantors knowledge and belief) been started or threatened against the
 Guarantor; and
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.8                     | the entry
 into and performance of this Guarantee and Indemnity will not conflict with
 the constitutional documents of the Guarantor or any law or regulation or
 document applicable to, or binding on, the Guarantor or any of its assets;
 and                                                                                                                                 
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.9                     | the
 Guarantor is not required to make any deduction or withholding from any
 payment which it may be obliged to make to the Lender under or pursuant to
 this Guarantee and Indemnity; and                                                                                                                                                                                        
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.10                    | it is not
 necessary to ensure the legality, validity, enforceability or admissibility
 in evidence of this Guarantee and Indemnity that it be filed, recorded or
 enrolled with any court or other authority in any country or that any stamp,
 registration or similar tax be paid on or in relation to this Guarantee and
 Indemnity; and                                       
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.11                    | the
 Guarantor is not in breach of, or default under, any agreement of any sort
 binding on it or on all or any part of its assets; and                                                                                                                                                                                                                                            
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.12                    | the
 Guarantor is not aware of any material facts or circumstances which have not
 been disclosed to the Lender and which might, if disclosed, have adversely
 affected the decision of a person considering whether or not to make loan facilities
 of the nature contemplated by the Facility Agreement available to the
 Borrower; and                                          
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 2.13                    | the
 Guarantor has received a copy of the Facility Agreement and approves of, and
 agrees to, the terms and conditions of the Facility Agreement.                                                                                                                                                                                                                                  
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|3 | Guarantee and Indemnity
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | The
 Guarantor:        
|  |                         |                                                                                                                                                                                                                                                                                                                                                                                     | 
|  | 3.1                     | irrevocably
 and unconditionally guarantees the due and punctual payment of each and every
 part of the Indebtedness in accordance with the terms of the Finance                                                                                                                                                                                                                   

5

---



|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|- | ------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                       | Documents so
 that, if any of the Indebtedness is not paid when it is due and payable,
 whether on maturity or otherwise, the Guarantor will, immediately on demand,
 make such payment to the Lender in the manner specified by the Lender,
 together with interest on the amount demanded at the rate accruing on the
 same under the Facility Agreement from the date of demand until the date of
 payment, both before and after judgment; and                                                                                                                                                                                                                           
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  | 3.2                                   | agrees, as a
 separate and independent obligation, that, if any of the Indebtedness is not
 recoverable from the Guarantor under Clause 3.1 for any reason, the Guarantor
 will be liable as a principal debtor by way of indemnity for the same amount
 as that for which the Guarantor would have been liable had that Indebtedness
 been recoverable, and agrees to discharge its liability under this Clause 3.2
 by making payment to the Lender immediately on demand together with interest
 on the amount demanded at the rate accruing on the same under the Facility
 Agreement from the date of demand until the date of payment, both before and
 after judgment.
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|4 | Preservation of Guarantors Liability
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  | 4.1                                   | This
 Guarantee and Indemnity is a continuing security for the full amount of the Indebtedness from time to time until the
 expiry of the Facility Period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  | 4.2                                   | The Lender
 may without the Guarantors consent and without notice to the Guarantor and
 without in any way releasing or reducing the Guarantors Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  |                                       | 4.2.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | amend, vary,
 novate, or replace any of the Finance Documents (other than this Guarantee
 and Indemnity); and/or                                                                                                                                         
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  |                                       | 4.2.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | agree with
 the Borrower to increase or reduce the amount of the Loan, or vary the terms
 and conditions for its repayment or prepayment (including, without
 limitation, the rate and/or method of calculation of interest payable on the
 Loan); and/or
|  |                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                          
|  |                                       | 4.2.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | allow any
 time or other indulgence to any of the other Security Parties under or in
 connection with any of the Finance Documents; and/or                                                                                                               

6

---



| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| | --- | ------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.2.4                                                  | renew, vary,
 release or refrain from enforcing any of the Finance Documents (other than
 this Guarantee and Indemnity); and/or                                                                                                                                                                      
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.2.5                                                  | compound
 with any of the other Security Parties; and/or                                                                                                                                                                                                                                             
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.2.6                                                  | enter into,
 renew, vary or terminate any other agreement or arrangement with any of the
 other Security Parties; and/or                                                                                                                                                                             
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.2.7                                                  | do or omit
 or neglect to do anything which might, but for this provision, operate to
 release or reduce the liability of the Guarantor under this Guarantee and
 Indemnity.                                                                                                                         
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| | 4.3 | The
 Guarantors Liabilities shall not be affected by:
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.1                                                  | the absence
 of, or any defective, excessive or irregular exercise of, any of the powers
 of any of the other Security Parties; nor                                                                                                                                                                  
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.2                                                  | any security
 given or payment made to the Lender by any of the other Security Parties being
 avoided or reduced under any law (whether English or foreign) relating to
 bankruptcy or insolvency or analogous circumstance in force from time to
 time; nor                                         
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.3                                                  | any change
 in the constitution of the Guarantor or of any of the other Security Parties
 or of the Lender or the absorption of or amalgamation by the Lender in or
 with any other entity or the acquisition of all or any part of the assets or
 undertaking of the Lender by any other entity; nor
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.4                                                  | the
 liquidation, administration, receivership, bankruptcy or insolvency of the
 Guarantor or any of the other Security Parties; nor                                                                                                                                                                 
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.5                                                  | any of the
 Finance Documents (other than this Guarantee and Indemnity) being defective,
 void or unenforceable, or the failure of any other person to provide the
 Lender with any security, guarantee or indemnity envisaged by the Facility
 Agreement; nor                                       
| |     |                                                        |                                                                                                                                                                                                                                                                                                      
| |     | 4.3.6                                                  | any
 composition, assignment or arrangement being made by any of the other
 Security Parties with any of its creditors; nor                                                                                                                                                                          

7

---



|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|- | ------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------
|  |                                 | 4.3.7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | anything
 which would, but for this provision, have released or reduced the liability
 of the Guarantor to the Lender.
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|  | 4.4                             | The Lender
 may continue the account(s) of the Borrower or open one or more new accounts
 for the Borrower notwithstanding any demand under this Guarantee and
 Indemnity, and the Guarantors liability at the date of demand shall not be
 released or affected by any subsequent payment into or out of any of the
 Borrowers accounts with the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|5 | Preservation of Lenders Rights
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|  | 5.1                             | This
 Guarantee and Indemnity is in addition to any other security, guarantee or
 indemnity now or in the future held by the Lender in respect of the
 Indebtedness, whether from the Borrower, the Guarantor or any other person,
 and shall not merge with, prejudice or be prejudiced by, any such security,
 guarantee or indemnity or any contractual or legal right of the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|  | 5.2                             | Any release,
 settlement, discharge or arrangement relating to the Guarantors Liabilities
 shall be conditional on no payment, assurance or security received by the
 Lender in respect of the Indebtedness being avoided or reduced under any law
 (whether English or foreign) in force from time to time relating to
 bankruptcy, insolvency or any (in the opinion of the Lender) analogous
 circumstance, and, after any such avoidance or reduction, the Lender shall be
 entitled to exercise all of its rights, powers, discretions and remedies
 under or pursuant to this Guarantee and Indemnity and/or any other rights,
 powers, discretions or remedies which it would otherwise have been entitled
 to exercise, as if no release, settlement, discharge or arrangement had taken
 place.
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|  | 5.3                             | Following
 the full payment of the Indebtedness, the Lender shall be entitled to retain
 this Guarantee and Indemnity and any security which it may hold for the
 Guarantors Liabilities until the Lender is satisfied in its discretion that
 it will not have to make any payment under any law referred to in Clause 5.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                       
|  | 5.4                             | Until the
 expiry of the Facility Period the Guarantor shall not:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

8

---



| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 5.4.1                                                                                                                                                                                                                                                           | be entitled
 to participate in any sums received by the Lender in respect of any of the
 Indebtedness; nor                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | 5.4.2                                                                                                                                                                                                                                                           | be entitled
 to participate in any security held by the Lender in respect of any of the
 Indebtedness nor stand in the place of, or be subrogated for, the Lender in
 respect of any such security; nor                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | 5.4.3                                                                                                                                                                                                                                                           | take any
 step to enforce any claim against any of the other Security Parties (or their
 respective estates or effects), nor claim or exercise any right of set off or
 counterclaim against any of the other Security Parties, nor make any claim in
 the bankruptcy or liquidation of any of the other Security Parties, in
 respect of any sums paid by the Guarantor to the Lender or in respect of any sum
 which includes the proceeds of realisation of any security at any time held
 by the Lender in respect of any of the Guarantors Liabilities; nor
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | 5.4.4                                                                                                                                                                                                                                                           | take any
 steps to enforce any other claim which it may have against any of the other
 Security Parties without the prior written consent of the Lender, and then
 only on such terms and subject to such conditions as the Lender may impose.                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 5.5 | The Lender
 may, but shall not be obliged to, resort for its own benefit to any other
 means of payment at any time and in any order it thinks fit without releasing
 or reducing the Guarantors Liabilities.                                                 
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 5.6 | The Lender
 may enforce this Guarantee and Indemnity either before or after resorting to
 any other means of payment without entitling the Guarantor to any benefit
 from or share in any such other means of payment until the expiry of the
 Facility Period.
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 5.7 | The
 Guarantor agrees that it is, and will throughout the Facility Period remain,
 a principal
 debtor in respect of the Guarantors Liabilities.                                                                                                              
| |     |                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 5.8 | No failure
 to exercise, nor any delay in exercising, on the part of the Lender, any
 right or remedy under this Guarantee and Indemnity shall operate as a waiver,
 nor shall any single or partial exercise of any right or remedy prevent any further       

9

---



|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|- | ------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |              | or other
 exercise or the exercise of any other right or remedy. The rights and
 remedies provided in this Guarantee and Indemnity are cumulative and not
 exclusive of any rights or remedies provided by law.                                                                                                                                                                                                                                                                                                             
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|6 | Undertakings
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  | 6.1          | The Guarantor
 shall pay to the Lender on demand on a full indemnity basis all documented
 costs and expenses incurred by the Lender in or about or incidental to the
 exercise by it of its rights under this Guarantee and Indemnity, together
 with interest at the Default Rate on the amount demanded from the date of
 demand until the date of payment, both before and after judgment, which
 interest shall be compounded with the amount demanded at the end of such
 periods as the Lender may reasonably select.
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  | 6.2          | The Guarantor
 has not taken, and will not take without the prior written consent of the
 Lender (and then only on such terms and subject to such conditions as the
 Lender may impose), any security from any of the other Security Parties in
 connection with this Guarantee and Indemnity, and any security taken by the Guarantor notwithstanding this Clause shall
 be held by the Guarantor in trust for the Lender absolutely as a continuing
 security for the Guarantors Liabilities.                            
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  | 6.3          | The
 Guarantor will observe and perform any and all covenants and undertakings in
 the Facility Agreement whose observance and performance by the Guarantor the
 Borrower has undertaken to procure.                                                                                                                                                                                                                                                                                                                        
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  | 6.4          | The
 Guarantor will not without the Lenders prior written consent:                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  |              | 6.4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | create nor
 permit to arise any Encumbrance or other third party rights over any of its
 shares in the Borrower other than in favour of the Lender; nor                                                                                  
|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          
|  |              | 6.4.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | permit the
 Borrower to acquire any new vessels nor permit the Borrower to create or
 permit to arise or continue any Encumbrance or other third party right on or
 over all or any part of its present or future assets or undertakings.

10

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6.5 | The
 Guarantor shall supply to the Lender as soon as the same become available,
 but in any event within one hundred and eighty (180) days after the end of
 each of its financial years, its audited consolidated financial statements
 for that financial year, together with a Compliance Certificate, signed by
 two directors of the Guarantor, setting out (in reasonable detail)
 computations as to compliance with clause 13.2.22 of the Facility Agreement
 as at the date at which those financial statements were drawn up. Each set of
 financial statements shall be:-          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| |     | 6.5.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | prepared
 using GAAP; and                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| |     | 6.5.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | certified by
 a director of the Guarantor as fairly representing its financial condition as
 at the date at which those financial statements were drawn up; and                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| | 6.6 | The
 Guarantor shall supply to the Lender as soon as the same become available,
 but in any event within ninety (90) days after the end of each quarter during
 each of the Guarantors financial years, its unaudited consolidated quarterly
 financial statements for that quarter, together with a Compliance Certificate
 to be provided on a semi-annual basis, signed by two directors of the
 Guarantor, setting out (in reasonable detail) computations as to compliance
 with clause 13.2.22 of Facility Agreement as at the date at which those
 financial statements were drawn up.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| | 6.7 | The
 Guarantor shall supply to the Lender:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| |     | 6.7.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | all
 documents dispatched by the Guarantor to its shareholders (or any class of
 them) or its creditors generally at the same time as they are dispatched
 other than any documents that are subject to any confidentiality restrictions
 pursuant to the New York Stock Exchange regulations that may prohibit such
 dissemination;                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
| |     | 6.7.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | promptly
 upon becoming aware of them, details of any litigation, arbitration or
 administrative proceedings which are current, threatened or pending against
 any Security Party, and which might, if adversely determined, have a
 materially adverse effect on the business, assets, financial condition or
 creditworthiness of that Security Party; and

11

---



|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|- | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|  |          | 6.7.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | promptly,
 such further information regarding the financial condition, business and
 operations of any Security Party as the Lender may reasonably request.
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  | 6.8      | The
 Guarantor shall permit the inspection of its financial records and accounts
 from time to
 time by the Lender or its nominee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  | 6.9      | The
 Guarantor shall remain directly or indirectly beneficially owned at a minimum
 of fifty one per cent (51%) by its Current Shareholders as of the date of the
 Side Letter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  | 6.10     | The
 Guarantor shall on a consolidated basis comply with the following financial
 covenants to be assessed on a semi-annual basis based on the Accounting
 Information received by the Lender in accordance with clauses 13.1.1 and
 13.1.4 of the Facility Agreement:-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  |          | 6.10.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Consolidated Group Leverage The Consolidated Group Leverage shall be equal to or less than
seventy per cent (70%).                                         
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  |          | 6.10.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Debt to EBITDA ratio The ratio of Debt to EBITDA on a trailing twelve (12) months
basis shall not at any time exceed 5,5:1.                               
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  |          | 6.10.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Net Worth The Net Worth shall not at any time be less than one hundred and seventy five
million Dollars ($175,000,000).                                   
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|7 | Payments
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                            
|  | 7.1      | All amounts
 payable by the Guarantor under or pursuant to this Guarantee and Indemnity
 shall be paid to such accounts at such banks as the Lender may from time to
 time direct to the Guarantor in the relevant currency in same day funds for
 immediate value. Payment shall be deemed to have been received on the date on
 which the Lender receives authenticated advice of receipt, unless that advice
 is received by the Lender on a day other than a Business Day or at a time of
 day (whether on a Business Day or not) when the Lender in its discretion
 considers that it is impossible or impracticable to utilise the amount
 received for value that same day, in which event the payment in question
 shall be deemed to have been

12

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |     | received on
 the Business Day next following the date of receipt of advice by the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | 7.2 | All payments
 to be made by the Guarantor pursuant to this Guarantee and Indemnity shall,
 subject only to Clause 7.3, be made free and clear of and without deduction
 for or on account of any taxes or other deductions, withholdings,
 restrictions, conditions or counterclaims of any nature, and the Guarantor
 will not claim any equity in respect of any payment due from it to the Lender
 under or in relation to this Guarantee and Indemnity.                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | 7.3 | If at any
 time any law requires (or is interpreted to require) the Guarantor to make
 any deduction or withholding from any payment, or to change the rate or
 manner in which any required deduction or withholding is made, the Guarantor
 will promptly notify the Lender and, simultaneously with making that payment,
 will pay whatever additional amount (after taking into account any additional
 taxes on, or deductions or withholdings from, or restrictions or conditions
 on, that additional amount) is necessary to ensure that, after making the
 deduction or withholding, the Lender receives a net sum equal to the sum
 which it would have received had no deduction or withholding been made.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | 7.4 | If at any
 time the Guarantor is required by law to make any deduction or withholding
 from any payment to be made by it pursuant to this Guarantee and Indemnity,
 the Guarantor will pay the amount required to be deducted or withheld to the
 relevant authority within the time allowed under the applicable law and will,
 no later than thirty days after making that payment, deliver to the Lender an
 original receipt issued by the relevant authority, or other evidence acceptable
 to the Lender, evidencing the payment to that authority of all amounts
 required to be deducted or withheld.                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | 7.5 | If the
 Guarantor pays any additional amount under Clause 7.3, and the Lender
 subsequently receives a refund or allowance from any tax authority which the
 Lender identifies as being referable to that increased amount so paid by the
 Guarantor, the Lender shall, as soon as reasonably practicable, pay to the
 Guarantor an amount equal to the amount of the refund or allowance received,
 if and to the extent that it may do so without prejudicing its right to
 retain that                                                                                                                                                                                                                            

13

---



|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |          | refund or
 allowance and without putting itself in any worse financial position than
 that in which it would have been had the relevant deduction or withholding
 not been required to have been made. Nothing in this Clause 7.5 shall be
 interpreted as imposing any obligation on the Lender to apply for any refund
 or allowance nor as restricting in any way the manner in which the Lender
 organises its tax affairs, nor as imposing on the Lender any obligation to
 disclose to the Guarantor any information regarding its tax affairs or tax
 computations.
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 7.6      | Any
 certificate or statement signed by an authorised signatory of the Lender
 purporting to show the amount of the Indebtedness or of the Guarantors
 Liabilities (or any part of any of them) or any other amount referred to in
 any of the Finance Documents shall, save for manifest error or on any
 question of law, be conclusive evidence as against the Guarantor of that
 amount.                                                                                                                                                                             
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|8 | Currency
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 8.1      | The
 Guarantors liability under this Guarantee and Indemnity is to discharge the
 Indebtedness in the currency in which it is expressed to be payable (the
 Agreed Currency).                                                                                                                                                                                                                                                                                                                                                                                          
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 8.2      | If at any
 time the Lender receives (including by way of set off) any payment by or on
 behalf of the Guarantor in a currency other than the Agreed Currency, that
 payment shall take effect as a payment to the Lender of the amount in the
 Agreed Currency which the Lender is able to purchase (after deduction of any
 relevant costs)
 with the amount of the payment so received in accordance with its usual
 practice.                                                                                                                                          
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 8.3      | To the
 extent that any payment to the Lender (whether by the Guarantor or any other
 person and whether under any judgment or court order or otherwise) in a
 currency other than the Agreed Currency shall on actual conversion into the
 Agreed Currency fall short of the relevant amount of the Indebtedness
 expressed in the Agreed Currency, then the Guarantor as a separate and
 independent obligation will indemnify the Lender against the shortfall.                                                                                                        

14

---



|   |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|-- | --------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|9  | Set-Off               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|   |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|   |                       | The
 Guarantor irrevocably authorises the Lender at any time to set off without
 notice any sums then due and payable by the Guarantor to the Lender under
 this Guarantee and Indemnity (irrespective of the branch or office, currency
 or place of payment) against any credit balance from time to time standing on
 any account of the Guarantor (whether current or otherwise, whether or not
 subject to notice and whether or not that credit balance is then due to the
 Guarantor) with any branch of the Lender in or towards satisfaction of the
 Guarantors Liabilities and, in the name of the Lender or the Guarantor, to
 do all acts (including, without limitation, purchasing or converting or
 exchanging any currency) which may be required to effect such set-off. Notice
 of such set-off shall be given to the Guarantor after such set-off has taken
 place.
|   |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|10 | Application of Moneys
|   |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|   | 10.1                  | All sums
 which the Lender receives under or in connection with this Guarantee and
 Indemnity shall, unless otherwise agreed by the Lender or otherwise provided
 in the Facility Agreement, be applied by the Lender in or towards
 satisfaction, or by way of retention on account, of the Guarantors
 Liabilities, in such manner as the Lender may in its discretion determine.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|   | 10.2                  | The Lender
 may place any money received by it under or in connection with this Guarantee
 and Indemnity to the credit of a suspense account on such terms and subject
 to such conditions as the Lender may in its discretion determine for so long
 as the Lender thinks fit without any obligation in the meantime to apply that
 money in or towards discharge of the Indebtedness, and, despite such payment,
 the Lender may
 claim against any of the other Security Parties or prove in the bankruptcy,
 liquidation or insolvency of any of the other Security Parties for the whole
 of the Indebtedness at the date of the Lenders demand for payment pursuant
 to this Guarantee and Indemnity, together with all interest, commission,
 charges and expenses accruing subsequently.                                                                                      

15

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|11 | Partial Invalidity                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | If, at any
 time, any provision of this Guarantee and Indemnity is or becomes illegal,
 invalid or unenforceable in any respect under any law of any jurisdiction, neither
 the legality, validity or enforceability of the remaining provisions nor the
 legality, validity or enforceability of such provision under the law of any
 other jurisdiction will in any way be affected or impaired.
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|12 | Further Assurance                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | The
 Guarantor agrees that from time to time on the written request of the Lender
 it will immediately execute and deliver to the Lender all further documents
 which the Lender may require for the purpose of perfecting or protecting the
 security intended to be created by this Guarantee and Indemnity.                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|13 | Miscellaneous                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | 13.1                                                                                                                                                                                                                                                                                                                                                                                               | All the
 covenants and agreements of the Guarantor in this Guarantee and Indemnity
 shall bind the Guarantor and its successors and permitted assignees and shall
 inure to the benefit of the Lender and its successors, transferees and
 assignees.
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | 13.2                                                                                                                                                                                                                                                                                                                                                                                               | The
 representations and warranties on the part of the Guarantor contained in this
 Guarantee and Indemnity shall survive the execution of this Guarantee and
 Indemnity.                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | 13.3                                                                                                                                                                                                                                                                                                                                                                                               | No variation
 or amendment of this Guarantee and Indemnity shall be valid unless in writing
 and signed on behalf of the Guarantor and the Lender.                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | 13.4                                                                                                                                                                                                                                                                                                                                                                                               | A person who
 is not a party to this Guarantee and Indemnity has no right under the
 Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the
 benefit of any term of this Guarantee and Indemnity.                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|14 | Notices                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                       | 
|   | The
 provisions of clause 18 of the Facility Agreement shall apply (mutatis
 mutandis) to this Guarantee and Indemnity as if it were set out in full with
 references to this Guarantee                                                                                                                                                                                                           

16

---



|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   | and
 Indemnity substituted for references to the Facility Agreement and with
 references to the Guarantor substituted for references to the Borrower.                                                      
|   |                                                                                                                                                                                                            
|15 | Counterparts                                                                                                                                                                                               
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | This Guarantee
 and Indemnity may be executed in any number of counterparts, and this has the
 same effect as if the signatures on the counterparts were on a single copy of
 this Guarantee and Indemnity.
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|16 | Law and Jurisdiction                                                                                                                                                                                       
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | 16.1                                                                                                                                                                                                        | This
 Guarantee and Indemnity shall in all respects be governed by and interpreted in accordance with English law.                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | 16.2                                                                                                                                                                                                        | For the
 exclusive benefit of the Lender, the Guarantor irrevocably agrees that the
 courts of England are to have jurisdiction to settle any disputes which may
 arise out of or in connection with this Guarantee and Indemnity and that any
 proceedings may be brought in those courts.                                                                                                                                                                                 
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | 16.3                                                                                                                                                                                                        | Nothing
 contained in this Clause shall limit the right of the Lender to commence any
 proceedings against the Guarantor in any other court of competent
 jurisdiction nor shall the commencement of any proceedings against the
 Guarantor in one or more jurisdictions preclude the commencement of any
 proceedings in any other jurisdiction, whether concurrently or not.                                                                                              
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | 16.4                                                                                                                                                                                                        | The
 Guarantor irrevocably waives any objection which it may now or in the future
 have to the laying of the venue of any proceedings in any court referred to
 in this Clause and any claim that those proceedings have been brought in an
 inconvenient or inappropriate forum, and irrevocably agrees that a judgment
 in any proceedings commenced in any such court shall be conclusive and
 binding on it and may be enforced in the courts of any other jurisdiction.
|   |                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|   | 16.5                                                                                                                                                                                                        | Without
 prejudice to any other mode of service allowed under any relevant law, the
 Guarantor:                                                                                                                                                                                                                                                                                                                                                                             

17

---



| |  |        |                                                                                                                                                                                                                   
| |  | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 16.5.1 | irrevocably
 appoints Mr. Savvas Savvides, 24 Exeter Road, London N14 5JY, England
 (tel/fax: +44 208 361 2606) as its agent for service of process in relation
 to any proceedings before the English courts; and
| |  |        |                                                                                                                                                                                                                   
| |  | 16.5.2 | agrees that
 failure by a process agent to notify the Guarantor of the process will not
 invalidate the proceedings concerned.                                                                                    

IN WITNESS of which
this Guarantee and Indemnity has been duly executed and delivered as a deed the
day and year first before written.

|                                        |  
|--------------------------------------- | -
|SIGNED and DELIVERED                    | )
|as a DEED                               | )
|by SAFE BULKERS INC.                    | )
|acting by
 IOANNIS FOTEINOS             | )
|                                        | )
|its duly
 authorised attorney-in-fact   | )
|                                        | )
|in the
 presence of: Nigel Bowen-Morris | )
|                                        |  
|                                        |  
|STEPHENSON HARWOOD                      |  
|ARISTON BUILDING                        |  
|2 FILELLINON STR.& AKTI MIAOULI         |  
|PIRAEUS 185 36                          |  
|VAT. NO. 9 9 8 7 1 1 1 5 6              |  
|TEL 210 42 95 160                       |  

18

---