Exhibit 4.63

Dated:          25 SEPTEMBER 2008

ENIAPROHI SHIPPING CORPORATION
(as Borrower)

- and -

DnB NOR BANK ASA
(as Lender)

|                                 
|---------------------------------
|                                 
|                                 
|US$45,000,000 SECURED            
|MULTI-CURRENCY REDUCING REVOLVING
|CREDIT FACILITY AGREEMENT        
|                                 
|                                 

m.v. ELENI

STEPHENSON HARWOOD
One St. Pauls Churchyard
London EC4M 8SH
Tel: 020 7329 4422
Fax: 020 7329 7100
Ref: 04.133

---



CONTENTS

|   |                                     |     
|-- | ----------------------------------- | ----
|   |                                     | Page
|   |                                     |     
|1  | Definitions
 and Interpretation     | 1   
|   |                                     |     
|2  | The Loan and
 its Purpose           | 17  
|   |                                     |     
|3  | Conditions
 of Utilisation          | 17  
|   |                                     |     
|4  | Advance                             | 20  
|   |                                     |     
|5  | Currency                            | 20  
|   |                                     |     
|6  | Repayment                           | 20  
|   |                                     |     
|7  | Prepayment                          | 21  
|   |                                     |     
|8  | Interest                            | 22  
|   |                                     |     
|9  | Indemnities                         | 25  
|   |                                     |     
|10 | Fees                                | 29  
|   |                                     |     
|11 | Security and
 Application of Moneys | 29  
|   |                                     |     
|12 | Representations                     | 35  
|   |                                     |     
|13 | Undertakings
 and Covenants         | 38  
|   |                                     |     
|14 | Events of
 Default                  | 47  
|   |                                     |     
|15 | Assignment and
 Sub-Participation   | 51  
|   |                                     |     
|16 | Set-Off                             | 52  
|   |                                     |     
|17 | Payments                            | 53  
|   |                                     |     
|18 | Notices                             | 55  
|   |                                     |     
|19 | Partial
 Invalidity                 | 56  
|   |                                     |     
|20 | Remedies and
 Waivers               | 56  
|   |                                     |     
|21 | Miscellaneous                       | 56  
|   |                                     |     
|22 | Law and
 Jurisdiction               | 57  

---



|                                |                                      |   
|------------------------------- | ------------------------------------ | --
|SCHEDULE 1:                     | Conditions
 Precedent and Subsequent | 59
|Part
 I: Conditions precedent   | 59                                  
|Part
 II: Conditions subsequent | 63                                  
|                                |                                      |   
|SCHEDULE 2:                     | Calculation
 of Mandatory Cost       | 64
|                                |                                      |   
|SCHEDULE 3:                     | Form of
 Drawdown Notice             | 67
|                                |                                      |   
|SCHEDULE 4                      | Form of
 Compliance Certificate      | 68

---



LOAN AGREEMENT

Dated:          
25 September 2008

BETWEEN:

|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)                      | ENIAPROHI SHIPPING CORPORATION, a company incorporated under the laws of the Republic of Liberia whose
 registered office is at 80 Broad Street, Monrovia, Liberia (the Borrower); and                                                                                                                                               
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|(2)                      | DnB NOR BANK ASA, acting through its office at 20 St.
 Dunstans Hill, London EC3R 8HY, England (the Lender).                                                                                                                                                                                                                        
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|WHEREAS:                
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|(A)                      | The Borrower
 has agreed to purchase and take delivery of the Vessel from the Seller on the
 terms of the Ship Sale Contract and intends to register the Vessel on
 delivery under the flag of Cyprus.                                                                                                                                 
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|(B)                      | The Lender
 has agreed to advance to the Borrower a secured multi-currency reducing
 revolving credit facility of up to forty five million Dollars ($45,000,000) for
 general working capital purposes in respect of the Group and for the purpose
 of assisting the Borrower in financing part of the acquisition cost of the
 Vessel.
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|IT IS AGREED as follows:
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|1                        | Definitions and Interpretation                                                                                                                                                                                                                                                                                                         
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|                         | 1.1                                                                                                                                                                                                                                                                                                                                     | In this
 Agreement:                                                                                                                                                                                                           
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|                         |                                                                                                                                                                                                                                                                                                                                         | Accounting Information means the annual
 financial statements and/or the quarterly financial statements to be provided
 by the Corporate Guarantor to the Lender in accordance with Clauses 13.1.1
 and 13.1.2 respectively.
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|                         |                                                                                                                                                                                                                                                                                                                                         | Accounts means the Operating Account and
 the Cash Collateral Account.                                                                                                                                                      
|                         |                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                               
|                         |                                                                                                                                                                                                                                                                                                                                         | Accounts Charge means the deed of charge
 referred to in Clause 11.1.3.                                                                                                                                                     

---



| |                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Administration has the meaning given to it in paragraph 1.1.3 of the ISM
 Code.                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                             
| | Annex VI means Annex VI (Regulations for
 the Prevention of Air Pollution from Ships) to the International Convention
 for the Prevention of Pollution from Ships 1973 (as modified in 1978 and
 1997).                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                             
| | Assignment means the deed of assignment referred to in Clause 11.1.2.                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                             
| | Availability Termination Date means
 three (3) months prior to the Final Maturity Date or such later date as the
 Lender may in its discretion agree.                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                             
| | Avstes means Avstes Shipping
 Corporation, a company incorporated according to the laws of the Republic of
 Liberia or such other company which shall be its successor in title.                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                             
| | Avstes Agreement means the reducing revolving
 multi-currency credit facility agreement dated 17 April 2008, as amended and
 supplemented by a first supplemental agreement dated 22 May 2008, each made
 between Avstes, as borrower and the Lender, as lender, as the same may be
 further amended and/or supplemented and/or novated from time to time.
| |                                                                                                                                                                                                                                                                                                                                                             
| | Avstes Indebtedness means the Indebtedness as such term is
 defined in the Avstes Agreement.                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                             
| | Break Costs means all sums payable by the Borrower from time to time under
 Clause 9.3.                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                             
| | Broker means any one of Arrow Chartering
 (UK), Braemer Seascope Group, Clarksons PLC and Fearnleys and Brokers means more than one of them.                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                             
| | Builder means IHI Marine United Inc., a corporation organised and
 existing under the laws of Japan, having its registered office at 22-23,
 Kaigan 3-chome, Minato-ku, Tokyo 108-0022, Japan.                                                                                                                                                            

2

---



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |     |                                                                                                                                                                                                                                                                                
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Business Day means a day (other than a Saturday or Sunday) on which
 banks are open for general business in New York, Athens and London and Tokyo
 (only if an amount in Japanese Yen is involved) and Zurich (only if an amount
 in Swiss Francs is involved) and any other financial centre which the Lender
 may consider appropriate for the operation of the provisions of this
 Agreement, and in the case of Euro, a day on which the Trans-European
 Automated Real Time Gross Settlement Express Transfer Payment System (TARGET)
 is operating.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Cash Collateral Account means the bank
 account to be opened (if and when required) in the name of the Borrower with
 the Lender and designated 63647003 - Cash Collateral Account.                                                                                                                                                                                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Charters means the Existing Charter and
any other time charter or other contact of employment in respect of the
Vessel which shall not exceed thirteen (13) months duration and Charter
means either of them.                                                                                                                                                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Charterer means Daiichi Chuo Kisen Kaisha of Tokyo, Japan or any
 other charterer who has entered into or shall enter into a Charter and Charterers means more than one of
them.                                                                                                                                                                                                                                                                                                                                                                       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Compliance Certificate means a
 certificate substantially in the form set out in Schedule 4 in form and
 substance satisfactory to the Lender.                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Consolidated Group Leverage means at any
 relevant time Consolidated Total Liabilities divided by Consolidated Total
 Assets.                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    
| |  | Consolidated Total Assets means, at any
 date, the aggregate of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |     |                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (a) | the then
 current market values of all vessels owned by any member of the Group (in the
 case of a Vessel or any other vessel, the market value shall be determined by
 reference only to the most recent valuation of such Vessel or vessel in
 accordance with Clause 11.11);

3

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                                                                                                                                                                            
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (b) | the then
 current aggregate amount of cash, Marketable Securities (but no other bonds,
 notes or bills and less any cash or Marketable Securities accounted for in
 the definition of Consolidated Total Liabilities below) and receivables due
 to the Group (less provision for bad and doubtful debts) as shown in the
 latest financial statements; and
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (c) | the book
 values of all other assets (other than the assets referred to in
 sub-paragraphs (a) and (b) hereof) as shown in such latest financial
 statements.                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                                                                                                                                                                            
| |  | Consolidated Total Liabilities means, at
 the relevant date and for a particular period, the aggregate of the
 consolidated Financial Indebtedness of the Group shown in the latest
 consolidated financial statements for the Group (excluding (i) liabilities to
 its shareholders, provided that they are subordinated on terms acceptable to
 the Lender in its discretion and (ii) debt that is fully collateralised by
 cash or Marketable Securities to which the right of access, use or dealing is
 blocked for any member of the Group solely to secure that debt).
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                                                                                                                                                                            
| |  | Converted means actually or notionally (as the case may require)
 converted by the Lender at the rate at which the Lender, in accordance with
 its usual practice, is able in the London Interbank market to purchase the
 Permitted Currency in which any part of the Loan is to be denominated with
 the Permitted Currency in which the Loan is then denominated, on the second
 Business Day before the value date for that conversion pursuant to Clause 5,
 and the words Convert and Conversion shall be interpreted
 accordingly.                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |    
| |  | Corporate Guarantee means the guarantee
 and indemnity referred to in Clause 11.1.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                                                                                                                                                                            
| |  | Corporate Guarantor means Safe Bulkers
 Inc., a company incorporated according to the laws of the Republic of
 Marshall Islands or such other company which shall be its successor in title.                                                                                                                                                                                                                                                                                                                                                                                 

4

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| |  |                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                            
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Credit Support Document means any
 document described as such in the Master Agreement and, where the context
 permits, any other document referred to in any Credit Support Document which
 has the effect of creating an Encumbrance in favour of the Lender.                                                               
| |  |                                                                                                                                                                                                                                                                                                                                 |    
| |  | Credit Support Provider means any person
 (other than the Borrower) described as such in the Master Agreement.                                                                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                                 |    
| |  | Currency of Account means, in relation
 to any payment to be made to the Lender under a Finance Document, the
 currency in which that payment is required to be made by the terms of that
 Finance Document.                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                 |    
| |  | Current Shareholders means the
 shareholders of the Corporate Guarantor who beneficially hold directly or
 indirectly not less than fifty one per cent (51%) of the shares in the
 Corporate Guarantor on the Signing Date.                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                 |    
| |  | Debt means the aggregate (as of the date
 of calculation) of all obligations of the Group then outstanding for the
 payment or repayment of Financial Indebtedness as stated in the Accounting
 Information then most recently required to be delivered pursuant to Clauses
 13.1.1 and 13.1.2 including, without limitation:
| |  |                                                                                                                                                                                                                                                                                                                                 |    
| |  |                                                                                                                                                                                                                                                                                                                                 | (a) | any amounts
 payable by the Group under leases, including, but not limited to, time
 chartering contracts, or similar arrangements over their respective periods;                                          
| |  |                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                 | (b) | any credit
 to the Group from a supplier of goods or under any instalment purchase or
 other similar arrangement;                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                 | (c) | the
 aggregate amount then outstanding of liabilities and obligations of third
 parties to the extent that they are guaranteed by the Group;                                                               
| |  |                                                                                                                                                                                                                                                                                                                                 |     |                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                 | (d) | any
 contingent liabilities (including any taxes or other payments under dispute
 or arbitration) which have been or, under GAAP, should be recorded in the
 notes to the Groups financial statements; and

5

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (e) | any deferred
 tax liabilities.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Deed of Covenants means the deed of
 covenants referred to in Clause 11.1.1.                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Default means an Event of Default or any
 event or circumstance specified in Clause 14.1 which would (with the expiry
 of a grace period, the giving of notice, the making of any determination
 under the Finance Documents or any combination of any of the foregoing) be an
 Event of Default.                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Delivery Date means the date of actual
 delivery of the Vessel to the Borrower by the Seller under the Ship Sale
 Contract.                                                                                                                                                                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | DOC means, in relation to the ISM
 Company, a valid Document of Compliance issued for the ISM Company by the
 Administration under paragraph 13.2 of the ISM Code.                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Dollars and $ each means available and freely transferable and
 convertible funds in lawful currency of the United States of America.                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Drawdown Date means the date on which a
 Drawing is advanced under Clause 4.                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Drawdown Notice means a notice
 substantially in the form set out in Schedule 3.                                                                                                                                                                                                                                                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Drawing means any one amount advanced or to be advanced pursuant to a
 Drawdown Notice or, where the context permits, the amount advanced and for
 the time being outstanding and Drawings means more than one of them.                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |    
| |  | Earnings means all hires, freights, pool income and other sums payable
 to or for the account of the Borrower in respect of the Vessel including
 (without limitation) all remuneration for salvage and towage services,
 demurrage and detention moneys, contributions in general average,
 compensation in respect of any requisition for hire, and damages and other
 payments (whether awarded by any court or arbitral tribunal or by agreement
 or otherwise) for breach,

6

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| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  | termination
 or variation of any contract for the operation, employment or use of the
 Vessel.                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | EBITDA on a consolidated basis of the
 Group means the earnings before interest, expenses and other financial
 charges, taxes, depreciation and amortization (for the previous period of
 twelve months).                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Efragel means Efragel Shipping
 Corporation, a company incorporated according to the laws of the Republic of
 Liberia or such other company which shall be its successor in title.                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Efragel Agreement means the reducing
 revolving multi-currency credit facility agreement dated 11 January 2008, as
 amended and supplemented by a first supplemental agreement dated 22 May 2008,
 each made between Efragel, as borrower and the Lender, as lender, as the same
 may be further amended and/or supplemented and/or novated from time to time.
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Efragel Indebtedness means the
 Indebtedness as such term is defined in the Efragel Agreement.                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Encumbrance means a mortgage, charge,
 assignment, pledge, lien, or other security interest securing any obligation
 of any person or any other agreement or arrangement having a similar effect.                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Eniadefhi means Eniadefhi Shipping Corporation, a company incorporated
 according to the laws of the Republic of Liberia or such other company which
 shall be its successor in title.                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Eniadefhi Agreement means the reducing revolving
 multi-currency credit facility agreement entered or to be entered between
 Eniadefhi, as borrower and the Lender, as lender, as the same may be amended
 and/or supplemented and/or novated from time to time.                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                  | 
| |  | Eniadefhi Indebtedness means the Indebtedness as such
 term is defined in the Eniadefhi Agreement.                                                                                                                                                                                                                                                            

7

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| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------
| |  | Eniaprohi Guarantees means the guarantees
 and indemnities to be granted by the Borrower in favour of the Lender in
 respect of each of the Pelea Indebtedness, the Efragel Indebtedness, the
 Marindou Indebtedness, the Avstes Indebtedness and the Eniadefhi Indebtedness
 and Eniaprohi Guarantee means any one of them.
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Euro and  means the single currency of the Participating Member
 States.                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Event of Default means any of the events
 or circumstances set out in Clause 14.1.                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Existing Charter means in respect of the Vessel the time charter dated November
 2007 made between the Managers and the Charterer, as the same may be amended
 and/or supplemented and/or novated from time to time.                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Facility Period means the period beginning on the Signing Date and ending on
 the date when the whole of the Indebtedness has been paid in full and the
 Security Parties have ceased to be under any further actual or contingent
 liability to the Lender under or in connection with the Finance Documents.                
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Final Maturity Date means the date
 falling on the earlier of (a) ten (10) years from the Delivery Date and (b)
 30 November 2018.                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Finance Documents means this Agreement,
 the Master Agreement, the Security Documents and any other document
 designated as such by the Lender and the Borrower and Finance Document means any one of them.                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | Financial Indebtedness means any
 obligation for the payment or repayment of money, whether present or future,
 actual or contingent, in respect of:                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | (a)                                                                                                                                                                                                                                                                                                                              | moneys
 borrowed;                                            
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | (b)                                                                                                                                                                                                                                                                                                                              | any
 acceptance credit;                                      
| |  |                                                                                                                                                                                                                                                                                                                                  |                                                              
| |  | (c)                                                                                                                                                                                                                                                                                                                              | any bond,
 note, debenture, loan stock or similar instrument;

8

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| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (d)                                                                                                                                                           | any finance
 or capital lease;                                                                                                                                                                                                     
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (e)                                                                                                                                                           | receivables
 sold or discounted (other than on a non-recourse basis);                                                                                                                                                              
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (f)                                                                                                                                                           | deferred
 payments for assets or services;                                                                                                                                                                                         
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (g)                                                                                                                                                           | any derivative
 transaction protecting against or benefiting from fluctuations in any rate or
 price (and, when calculating the value of any derivative transaction, only
 the marked to market value shall be taken into account);
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (h)                                                                                                                                                           | any amount
 raised under any other transaction (including any forward sale or purchase
 agreement) having the commercial effect of a borrowing;                                                                                    
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (i)                                                                                                                                                           | any
 counter-indemnity obligation in respect of a guarantee, indemnity, bond,
 standby or documentary letter of credit or any other instrument issued by a
 bank or financial institution; and                                     
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | (j)                                                                                                                                                           | the amount
 of any liability in respect of any guarantee or indemnity for any of the
 items referred to in paragraphs (a) to (i) above.                                                                                            
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | GAAP means generally accepted accounting
 principles in the United States of America.                                                                      
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | Group means the Corporate Guarantor and
 its Subsidiaries.                                                                                                 
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | Group Guarantees means the guarantees and indemnities of the Group Guarantors
 referred to in Clause 11.1.4, and Group
 Guarantee means
 any one of them.
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | Group Guarantors means Efragel, Pelea, Avstes, Eniadefhi and Marindou, and Group
Guarantor means any one of them.                                        
| |  |                                                                                                                                                               |                                                                                                                                                                                                                                    
| |  | Guarantees means the Corporate Guarantee and the Group Guarantees and Guarantee
means any one of them.                                                   

9

---



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Guarantors means the Corporate Guarantor and the Group Guarantors, and
Guarantor means any one of them.                                                                                                                                                                                                                                                                                                                         
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | IAPPC means a valid international air pollution prevention
 certificate for the Vessel issued under Annex VI.                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | 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) payable to the Lender under all or any of the Finance Documents.                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Insurances means all policies and contracts of insurance (including all
 entries in protection and indemnity or war risks associations) which are from
 time to time taken out or entered into in respect of or in connection with
 the Vessel or her increased value or the Earnings and (where the context
 permits) all benefits under such contracts and policies, including all claims
 of any nature and returns of premium.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Interest Payment Date means each date for
 the payment of interest in accordance with Clause 8.7.                                                                                                                                                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Interest Period means each period for the determination and payment of
 interest selected by the Borrower or agreed or selected by the Lender
 pursuant to Clause 8.                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ISM Code means the International
 Management Code for the Safe Operation of Ships and for Pollution Prevention.                                                                                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ISM Company means, at any given time,
 the company responsible for the Vessels compliance with the ISM Code under
 paragraph 1.1.2 of the ISM Code.                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ISPS Code means the International Ship and Port Facility Security Code.                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ISPS Company means, at any given time,
 the company responsible for the Vessels compliance with the ISPS Code.                                                                                                                                                                                                                                                                                                                   

10

---



| |  |                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                           
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ISSC means a valid international ship
 security certificate for the Vessel issued under the ISPS Code.                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                           
| |  | LIBOR means:                                                                                                                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                           
| |  | (a)                                                                                                                                                                                                                                                                                                                | the
 applicable Screen Rate; or                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                           
| |  | (b)                                                                                                                                                                                                                                                                                                                | (if no
 Screen Rate is available for any Interest Period) the arithmetic mean of the
 rates (rounded upwards to four decimal places) quoted to the Lender in the
 London interbank market,
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | at 11.00
 a.m. two (2) Business Days before the first day of the relevant Interest
 Period for the offering of deposits in Dollars or its equivalent in a
 Permitted Currency in an amount comparable to the Loan (or any relevant part
 of the Loan) and for a period comparable to the relevant Interest Period.
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Loan means the aggregate amount advanced
 or to be advanced by the Lender to the Borrower under Clause 4 or, where the
 context permits, the amount advanced and for the time being outstanding.                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Management Agreement means the
 agreement(s) for the commercial and/or technical management of the Vessel
 between the Borrower and the Managers.                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Managers means Safety Management
 Overseas S.A., or such other commercial and/or technical managers of the
 Vessel nominated by the Borrower as the Lender may approve.                                                                                                                                         
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Mandatory Cost means the percentage rate
 per annum calculated by the Lender in accordance with Schedule 2.                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Margin means zero point ninety per cent
 (0.90%) per annum.                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                   
| |  | Marindou means Marindou Shipping Corporation, a company incorporated
 according to the laws of the Republic of Liberia or such other company which
 shall be its successor in title.                                                                                                                            

11

---



| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Marindou Agreement means the reducing
 revolving multi-currency credit facility agreement dated 11 January 2008, as
 amended and supplemented by a first supplemental agreement dated 22 May 2008,
 each made between Marindou, as borrower and the Lender, as lender, as the
 same may be further amended and/or supplemented and/or novated from time to
 time.
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Marindou Indebtedness means the Indebtedness as such
 term is defined in the Marindou Agreement.                                                                                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Marketable Securities means any bonds,
 stocks, notes or bills payable in a freely convertible and transferable
 currency and which are listed on a stock exchange acceptable to the Lender.                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Master Agreement means any ISDA Master Agreement (or any other form of master
 agreement relating to interest or currency exchange transactions) entered
 into between the Lender and the Borrower during the Facility Period,
 including each Schedule to any Master Agreement and each Confirmation
 exchanged pursuant to any Master Agreement.               
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Maximum Amount means forty five million
 Dollars ($45,000,000) reduced from time to time in accordance with Clause 3.4
 and/or Clause 7.4 and/or Clause 8.9.5.                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Mortgage means the first priority statutory mortgage referred to in
 Clause 11.1.1 together with the Deed of Covenants.                                                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Mortgagees Insurances means all policies and contracts
 of mortgagees interest insurance from time to time taken out by the Lender
 in relation to the Vessel.                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                    
| |  | Net Worth means Consolidated Total Assets less Consolidated Total
 Liabilities.                                                                                                                                                                                                                                                                                  

12

---



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Operating Account means the bank account
 opened in the name of the Managers with the Lender and designated Eniaprohi
 Shipping Corporation  Operating Account with account number 63647001.                                                                                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Participating Member States means any
 member state of the European Community that adopts or has adopted the Euro as
 its lawful currency in accordance with legislation of the European Community
 relating to Economic and Monetary Union.                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Pelea means Pelea Shipping Ltd., a company
 incorporated according to the laws of the Republic of Liberia or such other
 company which shall be its successor in title.                                                                                                                                                                                                                                                       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Pelea Agreement means the reducing
 revolving multi-currency credit facility agreement dated 12 June 2007, as
 amended and supplemented by a supplemental agreement dated 22 May 2008, and
 as further amended and supplemented by a second supplemental agreement dated
 25 September 2008, each made between Pelea and the Lender, as the same may be
 further amended and/or supplemented and/or novated from time to time.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Pelea Indebtedness means the
 Indebtedness as such term is defined in the Pelea Agreement.                                                                                                                                                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Permitted Currency means Japanese Yen,
 Swiss Francs, Euro and Dollars.                                                                                                                                                                                                                                                                                                                                                       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Reduction Date means each date falling
 at consecutive six monthly intervals after the first Drawdown Date.                                                                                                                                                                                                                                                                                                                   
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Relevant Documents means the Finance
 Documents, the Management Agreement and the Managers confirmation specified
 in Part I of Schedule 1.                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Requisition Compensation means all
 compensation or other money which may from time to time be payable to the
 Borrower as a result of the Vessel being requisitioned for title or in any
 other way compulsorily acquired (other than by way of requisition for hire).                                                                                                                                                       

13

---



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Screen Rate means in relation to LIBOR,
 the British Bankers Association Interest Settlement Rate for the relevant
 currency and period displayed on the appropriate page of the Reuters screen.
 If the agreed page is replaced or the service ceases to be available, the
 Lender may specify another page or service displaying the appropriate rate
 after consultation with the Borrower.                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Security Documents means the Mortgage, the Deed of Covenants, the Assignment, the
 Accounts Charge, the Guarantees, any other Credit Support Documents or (where
 the context permits) any one or more of them and any other agreement or
 document which may at any time be executed by any person as security for the
 payment of all or any part of the Indebtedness and Security Document means any one of them.                                                                         
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Security Parties means the Borrower, the Guarantors and any other Credit
 Support Provider and any other person who may at any time during the Facility
 Period be liable for, or provide security for, all or any part of the
 Indebtedness, and Security Party
 means any one of them.                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Seller means Itochu Corporation, a
 corporation organized and existing under the laws of Japan, having its
 registered office at 5-1, Kita-Aoyama 2 chome, Minato-ku, Tokyo, 107-8077,
 Japan.                                                                                                                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Ship Sale Contract means the contract
 dated 28 August 2006, as the same may be amended and/or supplemented and/or
 novated and/or replaced from time to time, made between the Borrower, as
 buyer, and the Seller, as seller, on the terms and subject to the conditions
 of which the Seller has agreed to cause the Builder to construct, equip and
 complete the Vessel at one of the Builders shipyards in Yokohama or Kure,
 Japan, and to sell and deliver the Vessel to the Borrower.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | Side Letter means the side letter evidencing the Current Shareholders of
 the Corporate Guarantor on the Signing Date issued by the Corporate Guarantor
 in favour of the Lender in such form as the Lender may require.                                                                                                                                                                                                                                                                       

14

---



| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Signing Date means the date of signing of this Agreement which shall occur
 no later than 26 September 2008.                                                                                                         
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | SMC means a valid safety management certificate issued for the
 Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM
 Code.                                                                  
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | SMS means a safety management system for the Vessel developed and
 implemented in accordance with the ISM Code.                                                                                                      
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | Subsidiary has the meaning ascribed to
 it by section 1159 of the Companies Act 2006 (as the same may be amended
 and/or supplemented from time to time), and Subsidiaries shall be interpreted accordingly.       
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | Swiss Francs and SFr means
 available and freely transferable and convertible funds in non-resident
 currency of Switzerland.                                                                                      
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | Tax means any tax, levy, impost, duty or
 other charge or withholding of a similar nature (including any penalty or
 interest payable in connection with any failure to pay or any delay in paying
 any of the same).
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | Total Loss means:                                                                                                                                                                                                    
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | (a)                                                                                                                                                                                                                     | an actual,
 constructive, arranged, agreed or compromised total loss of the Vessel; or                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | (b)                                                                                                                                                                                                                     | the
 requisition for title or compulsory acquisition of the Vessel by any
 government or other competent authority (other than by way of requisition for
 hire); or                                                                                                                                                                        
| |  |                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                            
| |  | (c)                                                                                                                                                                                                                     | the capture,
 seizure, arrest, detention or confiscation of the Vessel by any government or
 by persons acting or purporting to act on behalf of any government, unless
 the Vessel is released and returned to the possession of the Borrower within
 one month after the capture, seizure, arrest, detention or confiscation in question.

15

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Transaction means a transaction entered
 into between the Lender and the Borrower governed by the Master Agreement.                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | Vessel means the approximately 87,000
 dwt panamax dry bulk carrier vessel ELENI with Builders hull number 3254,
 which will be delivered in November 2008 and which will be registered upon
 its delivery in the ownership of the Borrower under the laws and flag of the
 Republic of Cyprus together with everything now or in the future belonging to
 her on board and ashore.
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | Japanese Yen and Y means available and freely
 transferable and convertible funds in non-resident currency of Japan.                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| | 1.2 | In this
 Agreement:                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.1                                                                                                                                                                                                                                                                                                                                                                                    | words
 denoting the plural number include the singular and vice versa;                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.2                                                                                                                                                                                                                                                                                                                                                                                    | words
 denoting persons include corporations, partnerships, associations of persons
 (whether incorporated or not) or governmental or quasi-governmental bodies or
 authorities and vice versa;                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.3                                                                                                                                                                                                                                                                                                                                                                                    | references
 to Recitals, Clauses and Schedules are references to recitals, clauses and
 schedules to or of this Agreement;                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.4                                                                                                                                                                                                                                                                                                                                                                                    | references
 to this Agreement include the Recitals and the Schedules;                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.5                                                                                                                                                                                                                                                                                                                                                                                    | 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
 Agreement;                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.6                                                                                                                                                                                                                                                                                                                                                                                    | references
 to any document (including, without limitation, to all or any of the Relevant
 Documents) are, unless the context otherwise requires, references to that
 document as amended, supplemented, novated or replaced from time to time;
| |     |                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                
| |     | 1.2.7                                                                                                                                                                                                                                                                                                                                                                                    | 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;                                                                                

16

---



|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|- | ------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------
|  |                           | 1.2.8                                                                                                                                                                                                                                    | references
 to the Lender include its successors, transferees and assignees;                                          
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  |                           | 1.2.9                                                                                                                                                                                                                                    | a time of
 day (unless otherwise specified) is a reference to London time; and                                        
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  |                           | 1.2.10                                                                                                                                                                                                                                   | words and
 expressions defined in the Master Agreement, unless the context otherwise
 requires, have the same meaning.
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 1.3                       | Offer letter                                                                                                                                                                                                                            
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  |                           | This
 Agreement supersedes the terms and conditions contained in any correspondence
 relating to the subject matter of this Agreement exchanged between the Lender
 and the Borrower or their representatives prior to the Signing Date.
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|2 | The Loan and its Purpose 
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 2.1                       | Amount Subject to the terms of this Agreement, the Lender agrees to make available
to the Borrower a revolving credit facility in an aggregate amount not
exceeding the Maximum Amount at any one time.                                 
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 2.2                       | PurposeThe Borrower shall apply the Loan
 for the purpose referred to in Recital (B).                                                                                                                                                   
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 2.3                       | MonitoringThe Lender shall not be bound to
 monitor or verify the application of any amount borrowed under this
 Agreement.                                                                                                             
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|3 | Conditions of Utilisation
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 3.1                       | Conditions precedentThe Borrower is not
 entitled to have any Drawing advanced unless the Lender has received all of
 the documents and other evidence listed in Part I of Schedule 1.                                                  
|  |                           |                                                                                                                                                                                                                                          |                                                                                                                       
|  | 3.2                       | Further conditions precedentThe Lender will
 only be obliged to advance a Drawing if on the date of the Drawdown Notice
 and on the proposed Drawdown Date:                                                                             

17

---



| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 3.2.1                                                                  | no Default
 is continuing or would result from the advance of that Drawing; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.2.2                                                                  | the
 representations made by the Borrower under Clause 12 are true in all material
 respects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3.3 | Drawing limitThe Lender will only be
 obliged to advance a Drawing if:
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.3.1                                                                  | no other
 Drawing has been made on the same Business Day;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.3.2                                                                  | that
 Drawing is not less than one million Dollars ($1,000,000) or, if in excess of
 one million Dollars ($1,000,000), integral multiples of five hundred thousand
 Dollars ($500,000); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.3.3                                                                  | that Drawing
 will not increase the outstanding amount of the Loan to a sum in excess of
 the Maximum Amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3.4 | Reduction of Maximum AmountThe Maximum
 Amount:                       
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.4.1                                                                  | shall be
 reduced by twenty (20) reduction amounts, the first nineteen (19) reduction
 amounts on each of the Reduction Dates, each reduction amount in the amount
 of one million one hundred and twenty five thousand Dollars ($1,125,000) and
 the final reduction amount in the amount of twenty three million six hundred
 and twenty five thousand Dollars ($23,625,000) (comprising of a reduction
 amount of one million one hundred and twenty five thousand Dollars
 ($1,125,000) and a balloon reduction of twenty two million five hundred
 thousand Dollars ($22,500,000)), the first Reduction Date being the date
 which is six (6) calendar months from the Delivery Date and subsequent
 Reduction Dates being at consecutive intervals of six (6) calendar months
 thereafter, with the last Reduction Date being on the Final Maturity Date;
 and
| |     |                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | 3.4.2                                                                  | may (in
 addition to any reduction required under Clause 3.4.1) be reduced by the
 Borrower by five hundred thousand Dollars ($500,000) or an integral multiple
 of that amount with effect from any Business Day by                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

18

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                 | written
 notice to the Lender given not fewer than fourteen (14) days prior to that
 Business Day, which notice shall be irrevocable. Any voluntary reduction in
 the Maximum Amount shall be in addition to, and without prejudice to, the
 mandatory reductions in the Maximum Amount made pursuant to Clause 3.4.1 and
 may not be reversed. Any reduction under this Clause 3.4.2 shall satisfy the
 obligations under Clause 3.4.1 in order of maturity. Amounts repaid by the
 Borrower pursuant to this Clause shall not be available for reborrowing.
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 3.5 | Conditions subsequentThe Borrower
 undertakes to deliver or to cause to be delivered to the Lender on, or as
 soon as practicable after, the first Drawdown Date the additional documents
 and other evidence listed in Part II of Schedule 1.                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 3.6 | No WaiverIf the Lender in its sole discretion
 agrees to advance a Drawing to the Borrower before all of the documents and
 evidence required by Clause 3.1 have been delivered to or to the order of the
 Lender, the Borrower undertakes to deliver all outstanding documents and
 evidence to or to the order of the Lender no later than the date specified by
 the Lender.
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The advance
 of a Drawing under this Clause 3.6 shall not be taken as a waiver of the
 Lenders right to require production of all the documents and evidence
 required by Clause 3.1.                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 3.7 | Form and contentAll documents and evidence
 delivered to the Lender under this Clause 3 shall:                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | 3.7.1                                                                                                                                                                                                                                                                                                                                                                           | be in form
 and substance acceptable to the Lender;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | 3.7.2                                                                                                                                                                                                                                                                                                                                                                           | if required
 by the Lender, be certified, notarised, legalised or attested in a manner
 acceptable to the Lender; and                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | 3.7.3                                                                                                                                                                                                                                                                                                                                                                           | if copies,
 be certified as true and complete copies by a director or the secretary or
 the legal advisor or a duly authorised attorney-in-fact of the Borrower.                                                                                                                                                                                                                                                                                                                                                                                             

19

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|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|4 | Advance                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|  | The Borrower
 may request a Drawing to be advanced in one amount on any Business Day prior
 to the Availability Termination Date by delivering to the Lender a duly
 completed Drawdown Notice not more than ten (10) and not fewer than three (3)
 Business Days before the proposed Drawdown Date.
|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|5 | Currency                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|  | 5.1                                                                                                                                                                                                                                                                                                  | ConversionThe Borrower may Convert all or
 any part of the Loan into a Permitted Currency not later than five (5)
 Business Days before the Drawdown Date or at any time during the Facility
 Period, subject to there being no Event of Default which is continuing and
 subject to the Permitted Currency being available to the Lender. Upon
 conversion, that part of the Loan shall remain denominated in, and shall be
 repayable in, the Permitted Currency until the end of the relevant Interest
 Payment Date. Clause 3.4 shall be amended so that the Maximum Amount of the
 Loan shall be reduced in the Permitted Currency or Permitted Currencies
 selected under this Clause, provided that the Reduction Dates specified in
 Clause 3.4 shall not be changed.
|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|  | 5.2                                                                                                                                                                                                                                                                                                  | IndemnityThe Borrower shall indemnify the
 Lender from time to time on demand against all Break Costs, other losses,
 costs, claims, damages and expenses which the Lender may from time to time
 suffer, incur or sustain by reason of the Lender agreeing to and/or
 implementing the terms of this Clause (including, without limitation, all
 costs and expenses incurred by the Lender in effecting any conversion).                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|6 | Repayment                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                     
|  | 6.1                                                                                                                                                                                                                                                                                                  | Repayment of each DrawingThe Borrower agrees
 to repay each Drawing to the Lender on the last day of the Interest Period in
 respect of that Drawing. On the Final Maturity Date the Borrower shall repay
 to the Lender all amounts then outstanding under or pursuant to this
 Agreement. Without limitation to the repayments required by Clause 3.4, in
 addition the Borrower may repay any                                                                                                                                                                                                                                                                                                                                                                             

20

---



|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|- | ---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |            | Drawing in
 whole or in part in integral multiples of five hundred thousand Dollars
 ($500,000) (or the equivalent in the Permitted Currency in which the Drawing in
 question is then denominated) and no repayment shall be made in an amount
 which is less than one million Dollars ($1,000,000) (or the equivalent in the
 Permitted Currency in which the Drawing in question is then denominated) (or
 as otherwise may be agreed by the Lender) provided that it has first given to
 the Lender not fewer than two (2) Business Days prior written notice
 expiring on a Business Day of its intention to do so. Any notice pursuant to
 this Clause once given shall be irrevocable and shall oblige the Borrower to
 make the repayment referred to in the notice on the Business Day specified in
 the notice, together with all interest accrued on the amount repaid up to and
 including that Business Day and any repaid amount shall not be available for
 reborrowing.
|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|7 | Prepayment
|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|  | 7.1        | Illegality If it becomes unlawful in any
 jurisdiction for the Lender to perform any of its obligations as contemplated
 by this Agreement or to fund or maintain the Loan:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|  |            | 7.1.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the Lender
 shall promptly notify the Borrower of that event; and                                                                                                                                                                                                     
|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|  |            | 7.1.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the Borrower
 shall repay any Drawing on the last day of its current Interest Period or, if
 earlier, the date specified by the Lender in the notice delivered to the
 Borrower (being no earlier than the last day of any applicable grace period
 permitted by law).
|  |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                       
|  | 7.2        | Voluntary prepayment of LoanThe Borrower
 may prepay the whole or any part of a Drawing (but, if in part, being an
 amount that reduces that Drawing by a minimum amount of five hundred thousand
 Dollars ($500,000) or an integral multiple of that amount (or as otherwise
 may be agreed by the Lender) provided that it gives the Lender not less than
 fourteen (14) Business Days (or such shorter period of the notice as the
 Lender may agree) prior notice. Amounts prepaid by the Borrower pursuant to
 this Clause shall be available for reborrowing in accordance with Clause 3
 prior to the Availability Termination Date. Any                                                                                                                                                                                                                                                                                                                                        

21

---



|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |          | prepayment
 under this Clause 7.2 shall satisfy the obligations under Clause 6.1 in order
 of maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 7.3      | Mandatory prepayment on sale or Total LossUpon
 the sale or Total Loss of the Vessel, the Maximum Amount shall reduce to zero
 and the Borrower shall repay the Indebtedness in full, in the case of a sale
 of the Vessel, by not later than the date of the sale of the Vessel or, in
 the case of a Total Loss, by not later than the date falling one hundred and
 eighty (180) days from the date of the casualty giving rise to the Total Loss
 (or such longer period as the Lender may in its discretion agree). Amounts
 prepaid by the Borrower pursuant to this Clause shall not be available for
 reborrowing.
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 7.4      | Mandatory prepayment on reduction of Maximum AmountIf
 the Maximum Amount is reduced in accordance with Clause 3.4 to an amount
 which is less than the aggregate amount of the Drawings then outstanding, the
 Borrower shall, simultaneously with that reduction, prepay one or more
 outstanding Drawings to the extent required to ensure that the aggregate
 amount of the Drawings outstanding does not exceed the reduced Maximum
 Amount.                                                                                                                                                                         
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 7.5      | RestrictionsAny notice of prepayment given
 under this Clause 7 shall be irrevocable and, unless a contrary indication
 appears in this Agreement, shall specify the date or dates upon which the relevant
 prepayment is to be made and the amount of that prepayment.                                                                                                                                                                                                                                                                                                                                                   
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  |          | Any
 prepayment under this Agreement shall be made together with accrued interest
 on the amount prepaid and, subject to any Break Costs, without premium or
 penalty.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|8 | Interest
|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|  | 8.1      | Interest PeriodsThe period during which
 each Drawing shall be outstanding under this Agreement shall be an Interest
 Period of one (1), three (3), six (6), nine (9) or twelve (12) months
 duration, as selected by the Borrower in the Drawdown Notice in respect of
 the Drawing in question, or such other duration as may be                                                                                                                                                                                                                                                                                       

22

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |     | agreed by
 the Lender, provided that the Borrower shall not select more than three (3)
 Interest Periods of one (1) months duration per calendar year.                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.2 | Beginning and end of Interest PeriodsEach
 Interest Period shall start on the Drawdown Date of the Drawing in question
 and end on the date which numerically corresponds to that Drawdown Date in
 the relevant calendar month except that, if there is no numerically
 corresponding date in that calendar month, the Interest Period shall end on
 the last Business Day in that month.                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.3 | Interest Periods to meet Maturity DateIf an
 Interest Period for a Drawing would otherwise expire after the Maturity Date,
 the Interest Period for that Drawing shall expire on the Maturity Date.                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.4 | Non-Business DaysIf an Interest Period
 would otherwise end on a day which is not a Business Day, that Interest
 Period will instead end on the next Business Day in that calendar month (if
 there is one) or the preceding Business Day (if there is not).                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.5 | Interest rateDuring each Interest Period
 interest shall accrue on the relevant Drawing at the rate determined by the
 Lender to be the aggregate of (a) the Margin, (b) LIBOR and (c) the Mandatory
 Cost, if any.                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.6 | Failure to select Interest PeriodIf the
 Borrower at any time fails to select or agree an Interest Period in
 accordance with Clause 8.1, the interest rate applicable shall be the rate
 determined by the Lender in accordance with Clause 8.5 for an Interest Period
 of such duration (not exceeding six months) as the Lender may select.                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8.7 | Accrual and payment of interestInterest
 shall accrue from day to day, shall be calculated on the basis of a 360 day
 year and the actual number of days elapsed (or, in any circumstance where
 market practice differs, in accordance with the prevailing market practice)
 and shall be paid by the Borrower to the Lender on the last day of each
 Interest Period and, if the Interest Period is longer than six (6)

23

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                          |                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | months, on
 the dates falling at six (6) monthly intervals after the first day of that
 Interest Period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 8.8 | Default interestIf the Borrower fails to
 pay any amount payable by it under a Finance Document on its due date,
 interest shall accrue on the overdue amount from the due date up to the date
 of actual payment (both before and after judgment) at a rate which is one per
 cent (1%) higher than the rate which would have been payable if the overdue
 amount had, during the period of non-payment, constituted a Drawing in the
 currency of the overdue amount for successive Interest Periods, each selected
 by the Lender (acting reasonably). Any interest accruing under this Clause
 8.8 shall be immediately payable by the Borrower on demand by the Lender. If
 unpaid, any such interest will be compounded with the overdue amount at the
 end of each Interest Period applicable to that overdue amount but will remain
 immediately due and payable.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                         
| | 8.9 | Changes in market circumstancesIf at any
 time the Lender determines (which determination shall be final and conclusive
 and binding on the Borrower) that, by reason of changes affecting the London
 interbank market, adequate and fair means do not exist for determining the
 rate of interest on a Drawing for any Interest Period:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                         
| |     | 8.9.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the Lender
 shall give notice to the Borrower of the occurrence of such event; and                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                         
| |     | 8.9.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the rate of
 interest on the relevant Drawing for that Interest Period shall be the rate
 per annum which is the sum of:
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                          |                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (a)                                                                                                                      | the Margin;
 and                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                          |                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (b)                                                                                                                      | the rate
 which expresses as a percentage rate per annum the cost to the Lender of
 funding the relevant Drawing from whatever source it may reasonably select;
 and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                          |                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (c)                                                                                                                      | the
 Mandatory Cost, if any,                                                                                                                                        

24

---



|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|- | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |             | PROVIDED
 THAT if the resulting rate of interest is not acceptable to the Borrower:                                                                                                                                                                                                           
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |             | 8.9.3                                                                                                                                                                                                                                                                                          | the Lender
 will negotiate with the Borrower in good faith with a view to modifying this
 Agreement to provide a substitute basis for determining the rate of interest
 which is financially a substantial equivalent to the basis provided for in
 this Agreement;                                                                                                                                                                                                                               
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |             | 8.9.4                                                                                                                                                                                                                                                                                          | any
 substitute basis agreed pursuant to Clause 8.9.3 shall be binding on the
 parties to this Agreement; and                                                                                                                                                                                                                                                                                                                                                                                     
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |             | 8.9.5                                                                                                                                                                                                                                                                                          | if, within
 thirty (30) days of the giving of the notice referred to in Clause 8.9.1, the
 Borrower and the Lender fail to agree in writing on a substitute basis for
 determining the rate of interest in respect of the relevant Drawing, the
 Lender shall cease to be obliged to advance that Drawing, but, if it has
 already been advanced, the Borrower will immediately prepay it, together with
 any Break Costs, and the Maximum Amount shall be reduced by the amount of
 that Drawing.
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  | 8.10        | Determinations conclusiveThe Lender shall
 promptly notify the Borrower of the determination of a rate of interest under
 this Clause 8 and each such determination shall (save in the case of manifest
 error) be final and conclusive.                                                      
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|9 | Indemnities
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  | 9.1         | Transaction expensesThe Borrower will,
 within fourteen (14) days of the Lenders written demand, pay the Lender the
 amount of all costs and expenses (including legal fees and Value Added Tax or
 any similar or replacement tax if applicable) incurred by the Lender in connection
 with:
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |             | 9.1.1                                                                                                                                                                                                                                                                                          | the
 negotiation, preparation, printing, execution and registration of the Finance
 Documents (whether or not any Finance Document is actually executed or
 registered and whether or not a Drawing is advanced);                                                                                                                                                                                                                                                                                 
|  |             |                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |             | 9.1.2                                                                                                                                                                                                                                                                                          | any amendment,
 addendum or supplement to any Finance Document (whether or not completed);
 and                                                                                                                                                                                                                                                                                                                                                                                                   

25

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 9.1.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | any other
 document which may at any time be required by the Lender to give effect to
 any Finance Document or which the Lender is entitled to call for or obtain
 under any Finance Document (including, without limitation, all premiums and
 other sums from time to time payable by the Lender in relation to the
 Mortgagees Insurances).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                
| | 9.2 | Funding
 costsThe Borrower shall indemnify the Lender on the
 Lenders written demand against all losses and costs incurred or sustained by
 the Lender if, for any reason, a Drawing is not advanced to the Borrower
 after the relevant Drawdown Notice has been given to the Lender, or is
 advanced on a date other than that requested in the Drawdown Notice (unless,
 in either case, as a result of any default by the Lender).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                
| | 9.3 | Break
 CostsThe Borrower shall indemnify the Lender on the
 Lenders written demand against all costs, losses, premiums or penalties
 incurred by the Lender as a result of its receiving any prepayment of all or
 any part of a Drawing (whether pursuant to Clause 7 or otherwise) on a day
 other than the last day of an Interest Period for that Drawing, or any other
 payment under or in relation to the Finance Documents on a day other than the
 due date for payment of the sum in question, including (without limitation)
 any losses or costs incurred in liquidating or re-employing deposits from
 third parties acquired to effect or maintain all or any part of a Drawing,
 and any liabilities, expenses or losses incurred by the Lender in terminating
 or reversing, or otherwise in connection with, any Transaction or any other
 interest rate and/or currency swap, transaction or arrangement entered into
 by the Lender to hedge any exposure arising under this Agreement, or in
 terminating or reversing, or otherwise in connection with, any open position
 arising under this Agreement or the Master Agreement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                
| | 9.4 | Currency
 indemnityIn the event of the Lender receiving or recovering
 any amount payable under a Finance Document in a currency other than the
 Currency of Account, and if the amount received or recovered is insufficient
 when Converted into the Currency of Account at the date of receipt to satisfy
 in full the amount due, the Borrower shall, on the Lenders written demand,
 pay to the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

26

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Lender such
 further amount in the Currency of Account as is sufficient to satisfy in full
 the amount due and that further amount shall be due to the Lender as a
 separate debt under this Agreement.                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| | 9.5 | Increased costs (subject to Clause 9.6) If,
 by reason of the introduction of any law, or any change in any law, or any
 change in the interpretation or administration of any law, or compliance with
 any request or requirement from any central bank or any fiscal, monetary or
 other authority occurring after the Signing Date:                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | 9.5.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the Lender
 (or the holding company of the Lender) shall be subject to any Tax with
 respect to payment of all or any part of the Indebtedness (other than Tax on
 overall net income); or                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | 9.5.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the basis of
 Taxation of payments to the Lender in respect of all or any part of the
 Indebtedness shall be changed; or                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | 9.5.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | any reserve
 requirements shall be imposed, modified or deemed applicable against assets
 held by or deposits in or for the account of or loans by any branch of the
 Lender; or                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | 9.5.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the manner
 in which the Lender allocates capital resources to its obligations under this
 Agreement and/or the Master Agreement or any ratio (whether cash, capital
 adequacy, liquidity or otherwise) which the Lender is required or requested
 to maintain shall be affected; or
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | 9.5.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | there is
 imposed on the Lender (or on the holding company of the Lender) any other
 condition in relation to the Indebtedness or the Finance Documents;                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                     
| |     | and the
 result of any of the above shall be to increase the cost to the Lender (or to
 the holding company of the Lender) of the Lender making or maintaining the
 Loan, or its obligations under the Master Agreement to cause the Lender to
 suffer (in its opinion) a material reduction in the rate of return on its
 overall capital below the level which it reasonably anticipated at the
 Signing Date and which it would have been able to achieve but for its
 entering into this Agreement or the Master Agreement and/or performing its
 obligations under this Agreement or the

27

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                    | 
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | 
| |     | Master
 Agreement, then, subject to Clause 9.6, the Lender shall notify the Borrower
 and the Borrower shall from time to time pay to the Lender on demand the
 amount which shall compensate the Lender (or the holding company of the
 Lender) for such additional cost or reduced return. A certificate signed by
 an authorised signatory of the Lender setting out the amount of that payment
 and the basis of its calculation shall be submitted to the Borrower and shall
 be conclusive evidence of such amount save for manifest error or on any
 question of law.                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
| | 9.6 | Exceptions to increased costsClause 9.5
 does not apply to the extent any additional cost or reduced return referred
 to in that Clause is:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
| |     | 9.6.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | compensated
 for by a payment made under Clause 9.10; or                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                    | 
| |     | 9.6.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | compensated
 for by a payment made under Clause 17.3; or                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                    | 
| |     | 9.6.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | compensated
 for by the payment of the Mandatory Cost; or                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                    | 
| |     | 9.6.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | attributable
 to the wilful breach by the Lender (or the holding company of the Lender) of
 any law or regulation.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
| | 9.7 | Events of DefaultThe Borrower shall
 indemnify the Lender from time to time on the Lenders written demand against
 all losses, costs and liabilities incurred or sustained by the Lender as a
 consequence of any Event of Default.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                   
| | 9.8 | Enforcement costsThe Borrower shall pay to
 the Lender on the Lenders written demand the amount of all costs and expenses
 (including legal fees) incurred by the Lender in connection with the
 enforcement of, or the preservation of any rights under, any Finance Document
 including (without limitation) any losses, costs and expenses which the
 Lender may from time to time sustain, incur or become liable for by reason of
 the Lender being mortgagee of the Vessel and/or a lender to the Borrower, or
 by reason of the Lender being deemed by any court or authority to be an
 operator or controller, or in any way concerned in the operation or control,
 of the Vessel.

28

---



|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|-- | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   | 9.9                                | Other costsThe Borrower shall pay to the
 Lender on the Lenders written demand the amount of all sums which the Lender
 may pay or become actually or contingently liable for on account of the
 Borrower in connection with the Vessel (whether alone or jointly or jointly
 and severally with any other person) including (without limitation) all sums
 which the Lender may pay or guarantees which it may give in respect of the
 Insurances, any expenses incurred by the Lender in connection with the
 maintenance or repair of the Vessel or in discharging any lien, bond or other
 claim relating in any way to the Vessel, and any sums which the Lender may
 pay or guarantees which it may give to procure the release of the Vessel from
 arrest or detention.
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|   | 9.10                               | TaxesThe Borrower shall pay all Taxes to
 which all or any part of the Indebtedness or any Finance Document may be at
 any time subject (other than Tax on the Lenders overall net income) and
 shall indemnify the Lender on the Lenders written demand against all
 liabilities, costs, claims and expenses resulting from any omission to pay or
 delay in paying any such Taxes.                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|10 | Fees                              
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|   | 10.1                               | Commitment feeThe Borrower shall pay to the
 Lender a fee computed at the rate of zero point twenty per cent (0.20%) per
 annum on the undrawn Maximum Amount from time to time from the Signing Date
 until the Availability Termination Date. The accrued commitment fee is
 payable on the last day of each successive period of three (3) months from
 the Signing Date and on the Availability Termination Date.                                                                                                                                                                                                                                                                                                                                                          
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|   | 10.2                               | Arrangement feeThe Borrower shall pay to
 the Lender on the Signing Date an arrangement fee in the amount of ninety
 thousand Dollars ($90,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|11 | Security and Application of Moneys
|   |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|   | 11.1                               | Security DocumentsAs security for the
 payment of the Indebtedness, the Borrower shall execute and deliver to the
 Lender or cause to be executed and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

29

---



| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------
| |      | delivered to
 the Lender the following documents in such forms and containing such terms
 and conditions as the Lender shall require:                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.1.1                                                                                                                                                                                                                                                                                                           | a first
 priority Cypriot statutory mortgage over the Vessel together with a
 collateral deed of covenants;          
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.1.2                                                                                                                                                                                                                                                                                                           | a first
 priority deed of assignment of the Insurances, Earnings and Requisition
 Compensation of the Vessel;        
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.1.3                                                                                                                                                                                                                                                                                                           | a first
 priority deed of charge over the Accounts and all amounts from time to time
 standing to the credit of them;
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.1.4                                                                                                                                                                                                                                                                                                           | a guarantee
 and indemnity from each Group Guarantor; and                                                            
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.1.5                                                                                                                                                                                                                                                                                                           | a guarantee
 and indemnity from the Corporate Guarantor.                                                             
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| | 11.2 | AccountsThe Borrower shall maintain the
 Accounts with the Lender for the duration of the Facility Period free of
 Encumbrances and rights of set off other than those created by or under the
 Finance Documents.                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| | 11.3 | EarningsThe Borrower shall procure that all
 Earnings and any Requisition Compensation are credited to the Operating
 Account.                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| | 11.4 | Application of Operating AccountThe
 Borrower shall procure that there is transferred from the Operating Account
 to the Lender:                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.4.1                                                                                                                                                                                                                                                                                                           | on the due
 date for repayment of each Drawing, the amount of that Drawing; and                                      
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | 11.4.2                                                                                                                                                                                                                                                                                                           | on each
 Interest Payment Date in respect of a Drawing, the amount of interest due in
 respect of that Drawing,      
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| |      | and the
 Borrower irrevocably authorises the Lender to make those transfers.                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                  |                                                                                                                      
| | 11.5 | Borrowers obligations not affectedIf for
 any reason the amount standing to the credit of the Operating Account is
 insufficient to repay any Drawing or to make any payment of interest when
 due, the Borrowers obligation to repay that Drawing or to make that payment
 of interest shall not be affected.

30

---



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------
| | 11.6 | Release of surplusAny amount remaining to
 the credit of the Operating Account following the making of any transfer
 required by Clause 11.4 shall (unless a Default shall have occurred and be
 continuing) be released to or to the order of the Borrower, subject to an
 amount of one hundred and fifty thousand Dollars ($150,000) remaining
 credited to the Operating Account at all times during the Facility Period.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| | 11.7 | Relocation of AccountsAt any time following
 the occurrence and during the continuation of a Default, the Lender may
 without the consent of the Borrower relocate either or both of the Accounts
 to any other branch of the Lender, without prejudice to the continued
 application of this Clause 11 and the rights of the Lender under the Finance
 Documents.                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| | 11.8 | Application after accelerationFrom
 and after the giving of notice to the Borrower by the Lender under Clause
 14.2, the Borrower shall procure that all sums from time to time standing to
 the credit of either of the Accounts are immediately transferred to the
 Lender for application in accordance with Clause 11.9 and the Borrower
 irrevocably authorises the Lender to make those transfers.                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| | 11.9 | General application of moneysThe Borrower,
 subject to Clause 11.10, irrevocably authorises the Lender to apply all sums
 which the Lender may receive:                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| |      | 11.9.1                                                                                                                                                                                                                                                                                                                                                                                                                        | pursuant to
 a sale or other disposition of the Vessel or any right, title or interest in
 the Vessel; or
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| |      | 11.9.2                                                                                                                                                                                                                                                                                                                                                                                                                        | by way of
 payment of any sum in respect of the Insurances, Earnings or Requisition
 Compensation; or    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| |      | 11.9.3                                                                                                                                                                                                                                                                                                                                                                                                                        | by way of
 transfer of any sum from either of the Accounts; or                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| |      | 11.9.4                                                                                                                                                                                                                                                                                                                                                                                                                        | otherwise
 arising under or in connection with any Security Document,                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                          
| |      | in or
 towards satisfaction, or by way of retention on account, of the Indebtedness,
 in such manner as the Lender may determine.                                                                                                                                                                                                                                                                                            

31

---



| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | 11.10 | Application of moneys on sale or Total LossThe
 Borrower irrevocably authorises the Lender to apply all sums which the Lender
 may receive pursuant to a sale by the Borrower of the Vessel or a Total Loss
 in or towards satisfaction of the prepayment due and payable by virtue of
 that sale or Total Loss under Clause 7.3, but the Borrowers obligation to
 make that prepayment shall not be affected if those sums are insufficient to
 satisfy that obligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | 11.11 | Determination of market valueFor the
 purpose of the Security Documents, the market value of the Vessel shall be
 the average value certified by two of the Brokers, who shall report directly
 to the Lender and shall be appointed by the Borrower not later than five (5)
 days after the Lenders request for the Borrower to appoint such Brokers. In
 the event that the Borrower fails to appoint such Brokers within five (5)
 days after the Lenders request so to do or if a Broker appointed by the
 Borrower is not approved by the Lender and the Borrower fails to appoint an
 alternative Broker who is approved by the Lender within such five (5) day
 period, the Borrower irrevocably authorises the Lender to appoint a Broker in
 its discretion to conduct such valuations. All valuations pursuant to this
 Clause shall be made on the basis of a sale of the Vessel for prompt delivery
 for cash at arms length on normal commercial terms by a willing seller to a
 willing buyer and free of any existing charter or other contract of
 employment. The Borrower agrees to accept each valuation obtained pursuant to
 this Clause as conclusive evidence of the Vessels market value at the date
 of such valuation.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | 11.12 | Cost of valuationThe Borrower shall be
 liable for all costs and expenses incurred by the Lender in obtaining up to
 two valuations in each year of the Facility Period, such valuations to be
 provided by the Borrower semi-annually and annually throughout the Facility
 Period at a time which shall coincide with the provision of the Compliance
 Certificate in accordance with Clause 13.1.3 and 13.1.2 (the first such
 valuation to be provided within six (6) months after the Signing Date) unless
 there is an Event of Default in which case the Borrower shall be liable for
 all costs and expenses incurred by the Lender in obtaining any                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

32

---



| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | number of
 valuations required by it pursuant to Clause 11.11 and shall reimburse the
 Lender in respect of all such costs and expenses on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 11.13 | Provision of informationThe Borrower
 undertakes promptly to supply the Lender with such information concerning the
 Vessels condition, location and employment as the Lender may reasonably
 require.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 11.14 | Additional security If and so often as the aggregate of the market value of the Vessel
(determined in accordance with Clause 11.11) plus the value of any additional
security for the time being provided to the Lender pursuant to this Clause
shall be less than (a) one hundred per cent (100%) of the amount of the Loan,
for the period commencing on the first Drawdown Date and ending on the third
anniversary of the first Drawdown Date or (b) one hundred and ten per cent
(110%) of the amount of the Loan from the third anniversary of the first
Drawdown Date until the sixth anniversary of the first Drawdown Date or (c)
one hundred and twenty per cent (120%) of the amount of the Loan thereafter,
the Borrower will, within fourteen (14) days of the request of the Lender to
do so, at the Borrowers option:-
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       | 11.14.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | pay to the
 credit of the Cash Collateral Account such amount as shall be necessary to
 establish that the aggregate of the market value of the Vessel (determined in
 accordance with Clause 11.11) plus the value of any additional security for
 the time being provided to the Lender pursuant to this Clause shall be no less
 than (a) one hundred per cent (100%) of the amount of the Loan, for the
 period commencing on the first Drawdown Date and ending on the third
 anniversary of the first Drawdown Date, or (b) one hundred and ten per cent
 (110%) of the amount of the Loan from the third anniversary of the first
 Drawdown Date until the sixth anniversary of the first Drawdown Date or (c)
 one hundred and twenty per cent (120%) of the amount of the Loan thereafter;
 or

33

---



| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | 11.14.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | give to the
 Lender other security in amount and form acceptable to the Lender in its
 discretion; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       | 11.14.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | repay such
 amount of the Loan as shall be necessary to establish that the aggregate of
 the market value of the Vessel (determined in accordance with Clause 11.11)
 plus the value of any additional security for the time being provided to the
 Lender pursuant to this Clause shall be no less than (a) one hundred per cent
 (100%) of the amount of the Loan, for the period commencing on the first
 Drawdown Date and ending on the third anniversary of the first Drawdown Date,
 or (b) one hundred and ten per cent (110%) of the amount of the Loan from the
 third anniversary of the first Drawdown Date until the sixth anniversary of
 the first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       | Clauses 7.2,
 7.3 and 7.4 shall apply, mutatis mutandis, to any repayment made pursuant to
 this Clause and the value of any additional security provided pursuant to
 this Clause shall be determined by the Lender in its discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 11.15 | Return of
 additional securityIf and so often as the aggregate of the
 market value of the Vessel (determined in accordance with Clause 11.11) plus
 the value of any additional security for the time being provided to the Lender
 pursuant to Clause 11.14 shall exceed (a) one hundred per cent (100%) of the
 amount of the Loan, for the period commencing on the first Drawdown Date and
 ending on the third anniversary of the first Drawdown Date, or (b) one
 hundred and ten per cent (110%) of the amount of the Loan from the third
 anniversary of the first Drawdown Date until the sixth anniversary of the
 first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter, then the Lender shall, within fourteen (14)
 days of the request of the Borrower to do so, release to the Borrower such
 portion of the amount standing to the credit of the Cash Collateral Account
 in accordance with Clause 11.14 and/or such amount of the security referred
 to in Clause 11.14.2 as shall be required to ensure that the aggregate of the
 market value of the Vessel (determined as aforesaid) plus the

34

---



|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                     |                                                                   
|-- | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------
|   |                 | value of any
 additional security for the time being provided to the Lender pursuant to
 Clause 11.14 is equal to, but not less than (a) one hundred per cent (100%)
 of the amount of the Loan, for the period commencing on the first Drawdown
 Date and ending on the third anniversary of the first Drawdown Date, or (b)
 one hundred and ten per cent (I 10%) of the amount of the Loan from the third
 anniversary of the first Drawdown Date until the sixth anniversary of the
 first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter.
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|12 | Representations
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   | 12.1            | RepresentationsThe Borrower makes the
 representations and warranties set out in this Clause 12.1 to the Lender on
 the Signing Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   |                 | 12.1.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | StatusEach Security Party (which is not an
 individual) which 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 carry on its business as it is being conducted.
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   |                 | 12.1.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Binding obligationsThe obligations
 expressed to be assumed by each Security Party in each Finance Document to
 which it is a party are legal, valid, binding and enforceable obligations.                                                                         
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   |                 | 12.1.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Non-conflict with other obligationsThe
 entry into and performance by each Security Party of, and the transactions
 contemplated by, the Finance Documents do not conflict with:                                                                                   
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (a)                                                                                                                                                                                                                                                                 | any law or
 regulation applicable to that Security Party;         
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                     |                                                                   
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (b)                                                                                                                                                                                                                                                                 | the
 constitutional documents of that Security Party; or          
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                     |                                                                   
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (c)                                                                                                                                                                                                                                                                 | any document
 binding on that Security Party or any of its assets,
|   |                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                    
|   |                 | and in
 borrowing the Loan, the Borrower is acting for its own account.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

35

---



| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                              
| |  | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 12.1.4 | Power and authorityEach Security Party has
 the power to enter into, perform and deliver, and has taken all necessary
 action to authorise its entry into, performance and delivery of, the Finance
 Documents to which it is a party and the transactions contemplated by those
 Finance Documents.                                                                                                                                       
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | 12.1.5 | Validity and admissibility in evidenceAll
 consents, licences, approvals, authorisations, filings and registrations
 required or desirable:                                                                                                                                                                                                                                                                                                
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                              
| |  |        | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                         | to enable
 each Security Party lawfully to enter into, exercise its rights and comply
 with its obligations in the Finance Documents to which it is a party or to
 enable the Lender to enforce and exercise all its rights under the Finance
 Documents; and
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                              
| |  |        | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                         | to make the
 Finance Documents to which any Security Party is a party admissible in
 evidence in its jurisdiction of incorporation,                                                                                                                          
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |        | have been
 obtained or effected and are in full force and effect, with the exception
 only of the registrations referred to in Part II of Schedule 1.                                                                                                                                                                                                                                                                                      
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | 12.1.6 | Governing law and enforcementThe choice of
 English law as the governing law of any Finance Document expressed to be
 governed by English law will be recognised and enforced in the jurisdiction
 of incorporation of each relevant Security Party, and any judgment obtained
 in England in relation to any such Finance Document will be recognised and
 enforced in the jurisdiction of incorporation of each relevant Security
 Party.
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | 12.1.7 | Deduction of TaxNo Security Party is
 required under the law of its jurisdiction of incorporation to make any
 deduction for or on account of Tax from any payment it may make under any
 Finance Document.                                                                                                                                                                                                                                
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | 12.1.8 | No filing or stamp taxesUnder the law of jurisdiction
 of incorporation of each relevant Security Party it is not necessary that the
 Finance Documents be filed, recorded or enrolled with any court or other                                                                                                                                                                                                                             

36

---



| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |         | authority in
 that jurisdiction or that any stamp, registration or similar tax be paid on
 or in relation to the Finance Documents or the transactions contemplated by
 the Finance Documents.                                                                                                                                                                                                                       
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.9  | No defaultNo Event of Default is continuing
 or might reasonably be expected to result from the advance of a Drawing.                                                                                                                                                                                                                                                                                                
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.10 | No misleading informationAny factual
 information provided by any Security Party to the Lender was true and
 accurate in all material respects as at the date is was provided.                                                                                                                                                                                                                                       
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.11 | Pari passu rankingThe payment obligations
 of each Security Party under the Finance Documents to which it is a party
 rank at least pari passu with the claims of all its other unsecured and
 unsubordinated creditors, except for obligations mandatorily preferred by law
 applying to companies generally.                                                                                                       
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.12 | No proceedings pending or threatenedNo
 litigation, arbitration or administrative proceedings of or before any court,
 arbitral body or agency have been started or (to the best of the Borrowers
 knowledge threatened) which, if adversely determined, might reasonably be
 expected to have a materially adverse effect on the business, assets,
 financial condition or credit worthiness of any Security Party.
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.13 | Disclosure of material factsThe Borrower 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 this Agreement available to the
 Borrower.                                                             
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.14 | No established place of business in the UK or USNo
 Security Party, other than the Corporate Guarantor, has an established place
 of business in the United Kingdom or the United States of America.                                                                                                                                                                                                                 
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | 12.1.15 | Completeness of Relevant DocumentsThe copies
 of any Relevant Documents provided or to be provided by the Borrower to the
 Lender in                                                                                                                                                                                                                                                                                 

37

---



|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                             |                                                                                                                                                                                                                                                | accordance
 with Clause 3 are, or will be, true and accurate copies of the originals and
 represent, or will represent, the full agreement between the parties to those
 Relevant Documents in relation to the subject matter of those Relevant
 Documents and there are no commissions, rebates, premiums or other payments
 due or to become due in connection with the subject matter of those Relevant
 Documents other than in the ordinary course of business or as disclosed to,
 and approved in writing by, the Lender.                                                  
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 12.2                                                                                                        | RepetitionEach representation and warranty in Clause 12.1 is deemed
 to be repeated by the Borrower by reference to the facts and circumstances
 then existing on the date of each Drawdown Notice and the first day of each
 Interest Period.
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|13 | Undertakings and Covenants                                                                                 
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The
 undertakings and covenants in this Clause 13 remain in force for the duration
 of the Facility Period.
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 13.1                                                                                                        | Information Undertakings                                                                                                                                                                                                                      
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                             | 13.1.1                                                                                                                                                                                                                                         | Financial
 statementsThe Borrower shall procure that the Corporate
 Guarantor supplies 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 Corporate Guarantor, setting out (in reasonable detail)
 computations as to compliance with Clause 13.2.21 as at the date at which
 those financial statements were drawn up.
|   |                                                                                                             |                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                             | 13.1.2                                                                                                                                                                                                                                         | Interim
 financial statementsThe Borrower shall procure that the
 Corporate Guarantor supplies 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 Corporate Guarantors financial years, its                                                                                                                                                                                                                                                                                         

38

---



| |  |        |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                    
| |  | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |        | 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 Corporate Guarantor, setting out (in reasonable detail)
 computations as to compliance with Clause 13.2.21 as at the date at which
 those financial statements were drawn up.          
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                
| |  | 13.1.3 | Management
 accountsThe Borrower or the Managers will supply to the
 Lender, on the earlier of (a) the Lenders first request and (b) within sixty
 (60) days of the end of each calendar year during the Facility Period the
 unaudited management accounts for the Vessel prepared by the Managers showing
 the income and expenditure for the Vessel for such calendar year.
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                
| |  | 13.1.4 | Requirements as to financial statementsEach
 set of financial statements delivered by the Corporate Guarantor under
 Clauses 13.1.1 and 13.1.2 shall be:-                                                                                                                                                                                                                      
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                    
| |  |        | (a)                                                                                                                                                                                                                                                                                                                                                                             | prepared
 using GAAP; and                                                                                                                                                                                                                                                                                                          
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                    
| |  |        | (b)                                                                                                                                                                                                                                                                                                                                                                             | certified by
 a director of the Corporate Guarantor as fairly representing its financial
 condition as at the date at which those financial statements were drawn up.                                                                                                                                                              
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                
| |  | 13.1.5 | Information:
 miscellaneousThe Borrower shall supply to the Lender:                                                                                                                                                                                                                                                                                                            
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                
| |  |        | (a)                                                                                                                                                                                                                                                                                                                                                                             | all
 documents dispatched by the Borrower 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;
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                    
| |  |        | (b)                                                                                                                                                                                                                                                                                                                                                                             | 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                                                                     

39

---



| |  |        |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                   
| |  | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |        |                                                                                                                                                                                                                                                                                                                                                                        | on the
 business, assets, financial condition or credit worthiness of that Security
 Party; and                                                                                                                                                                                                                   
| |  |        |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                   
| |  |        | (c)                                                                                                                                                                                                                                                                                                                                                                    | promptly,
 such further information regarding the financial condition, business and
 operations of any Security Party as the Lender may reasonably request.                                                                                                                                                       
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.1.6 | Notification of default                                                                                                                                                                                                                                                                                                                                               
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | (a)                                                                                                                                                                                                                                                                                                                                                                    | The Borrower
 shall notify the Lender of any Default (and the steps, if any, being taken to
 remedy it) promptly upon becoming aware of its occurrence.                                                                                                                                                           
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | (b)                                                                                                                                                                                                                                                                                                                                                                    | Promptly
 upon a request by the Lender, the Borrower shall supply to the Lender a
 certificate signed by two of its directors or senior officers on its behalf
 certifying that no Default is continuing (or if a Default is continuing,
 specifying the Default and the steps, if any, being taken to remedy it).
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.1.7 | Know your customer checks If:                                                                                                                                                                                                                                                                                                                                       
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | (a)                                                                                                                                                                                                                                                                                                                                                                    | the
 introduction of or any change in (or in the interpretation, administration or
 application of) any law or regulation made after the Signing Date;                                                                                                                                                            
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | (b)                                                                                                                                                                                                                                                                                                                                                                    | any change
 in the status of the Borrower after the Signing Date; or                                                                                                                                                                                                                                              
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | (c)                                                                                                                                                                                                                                                                                                                                                                    | a proposed
 assignment or transfer by the Lender of any of its rights and obligations
 under this Agreement,                                                                                                                                                                                                      
| |  |        |                                                                                                                                                                                                                                                                                                                                                                       
| |  |        | obliges the
 Lender (or, in the case of (c) above, any prospective new Lender) to comply
 with know your customer or similar identification procedures in
 circumstances where the necessary information is not already available to it,
 the Borrower shall promptly upon the request of the Lender supply, or procure
 the supply of, such documentation and other

40

---



| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                             
| | ---- | -------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------
| |      |                      | evidence as
 is reasonably requested by the Lender for itself (or, in the case of (c)
 above, on behalf of any prospective new Lender) in order for the Lender (or,
 in the case of (c) above, any prospective new Lender) to carry out and
 be satisfied it has complied with all necessary know your customer or other
 similar checks under all applicable laws and regulations pursuant to the
 transactions contemplated in the Finance Documents.
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 13.2 | General undertakings
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 13.2.1               | AuthorisationsThe Borrower shall promptly:                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      |                      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                       | obtain,
 comply with and do all that is necessary to maintain in full force and
 effect; and
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                             
| |      |                      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                       | supply
 certified copies to the Lender of,                                                  
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      |                      | any consent,
 licence, approval or authorisation required under any law or regulation to
 enable each Security Party to perform its obligations under the Finance
 Documents to which it is a party and to ensure the legality, validity,
 enforceability or admissibility in evidence in the jurisdiction of
 incorporation of each relevant Security Party of any Finance Document.                                                                    
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 13.2.2               | Compliance with lawsThe Borrower shall
 comply in all respects with all laws to which it may be subject, if failure
 so to comply would materially impair its ability to perform its obligations
 under the Finance Documents.                                                                                                                                                                                                                           
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 13.2.3               | Conduct of businessThe Borrower shall carry
 on and conduct its business in a proper and efficient manner, file all
 requisite tax returns and pay all tax which becomes due and payable (except
 where contested in good faith).                                                                                                                                                                                                                        
| |      |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | 13.2.4               | Evidence of good standingThe Borrower will
 from time to time if requested by the Lender provide the Lender with evidence
 in form and                                                                                                                                                                                                                                                                                                                   

41

---



| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |         | substance
 satisfactory to the Lender that the Security Parties and all corporate
 shareholders of any Security Party remain in good standing.                                                                                                                                                                                                                                                                                                                                                                        
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.5  | LiquidityThe Borrower will throughout the
 Facility Period maintain in the Operating Account at all times a minimum
 positive account balance free of any Encumbrances (other than in favour of
 the Lender) of not less than one hundred and fifty thousand Dollars
 ($150,000). Any undrawn amounts under this Agreement may be included for the
 purpose of this calculation and this calculation shall exclude cash deposited
 with the Lender as security for any other facility or in connection with
 Clause 5.
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.6  | Negative pledge and no disposalsThe
 Borrower shall not create nor permit to subsist any Encumbrance, other than
 in favour of the Lender, or other third party right, other than in favour of
 the Lender, on or over all or any part of its present or future assets or
 undertaking nor dispose of any those assets or of all or part of that
 undertaking.                                                                                                                                                        
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.7  | MergerThe Borrower shall not without the
 prior written consent of the Lender enter into any amalgamation, demerger,
 merger or corporate reconstruction from the Signing Date.                                                                                                                                                                                                                                                                                                                                       
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.8  | Change of businessThe Borrower shall not
 without the prior written consent of the Lender make any substantial change
 to the general nature of its business from that carried on at the Signing
 Date.                                                                                                                                                                                                                                                                                                               
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.9  | No other businessThe Borrower shall not
 without the prior written consent of the Lender engage in any business other
 than the ownership, operation, chartering and management of the Vessel.                                                                                                                                                                                                                                                                                                                        
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.10 | No place of business in UK or USThe
 Borrower shall not have an established place of business in the United
 Kingdom or the United States of America at any time during the Facility
 Period.                                                                                                                                                                                                                                                                                                                         
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | 13.2.11 | No borrowingsThe Borrower shall not without
 the prior written consent of the Lender borrow any money (except for the Loan
 and                                                                                                                                                                                                                                                                                                                                                                                       

42

---



| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |         | unsecured
 Financial Indebtedness subordinated to the Loan) nor incur any obligations
 under leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 13.2.12 | No substantial liabilitiesExcept in the
 ordinary course of business and other than in favour of the Lender, the
 Borrower shall not without the prior written consent of the Lender incur any
 liability to any third party which is in the Lenders opinion of a
 substantial nature.                                                                                                                                                                                                                                                                                                                                                                                      
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 13.2.13 | No loans or other financial commitmentsThe
 Borrower shall not without the prior written consent of the Lender make any
 loan (other than any part the Loan to be used for the purposes set out in
 Recital (B)) nor enter into any guarantee or indemnity (other than the
 Eniaprohi Guarantees, other than any guarantee or indemnity from time to time
 required by any insurer and which is in accordance with the terms and
 conditions of clause 5 of the Deed of Covenants, the Insurances and any
 acceptable Insurance letter of undertaking) or otherwise voluntarily assume
 any actual or contingent liability in respect of any obligation of any other
 person.
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 13.2.14 | Inspection of recordsThe Borrower will
 permit the inspection of its financial records and accounts and procure that
 the Corporate Guarantor permits the inspection of the Corporate Guarantors
 financial records and accounts from time to time by the Lender or its
 nominee.                                                                                                                                                                                                                                                                                                                                                                                           
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 13.2.15 | No change in Relevant DocumentsThe Borrower
 shall procure that, without the prior written consent of the Lender, there
 shall be no termination of, alteration to, or waiver of any term of, any of
 the Relevant Documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 13.2.16 | No change in ownership or control of the Borrower or the ManagersThe
 Borrower shall not cease to be a wholly owned Subsidiary of the Corporate
 Guarantor and shall not permit any change in the beneficial ownership and
 control of the Managers from that advised to the Lender on the Signing Date.                                                                                                                                                                                                                                                                                                                                                                     

43

---



| |  |         |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                              
| |  | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------
| |  | 13.2.17 | No purchase of a vesselThe Borrower shall
 not purchase any vessel or any shares in any vessel.                                                                                                                                                                                                                                            
| |  |         |                                                                                                                                                                                                                                                                                                                                            
| |  | 13.2.18 | No dealings with Master AgreementThe
 Borrower shall not assign, novate or encumber or in any other way transfer
 any of its rights or obligations under the Master Agreement, nor enter into
 any interest rate exchange or hedging agreement with anyone other than the
 Lender.                                                         
| |  |         |                                                                                                                                                                                                                                                                                                                                            
| |  | 13.2.19 | ChartersThe Borrower shall inform the
 Lender in respect of its entry into any charter or other contract of
 employment in respect of the Vessel (other than the Charters) and of any
 extensions, increases or decreases in
 charter hire or other material amendments to a Charter or any other charter
 or other contract of employment.
| |  |         |                                                                                                                                                                                                                                                                                                                                            
| |  | 13.2.20 | OwnershipThe Borrower shall procure that
 the Corporate Guarantor shall remain directly or indirectly beneficially
 owned by its Current Shareholders or any of them at a minimum of fifty one
 per cent (51%).                                                                                                                            
| |  |         |                                                                                                                                                                                                                                                                                                                                            
| |  | 13.2.21 | Financial covenantsThe Borrower shall
 procure that the Corporate Guarantor shall on a consolidated basis comply
 with the following financial covenants to be assessed on a semi-annual basis
 based on the basis of the Accounting Information received by the Lender in
 accordance with Clauses 13.1.1 and 13.1.2:-                    
| |  |         |                                                                                                                                                                                                                                                                                                                                            
| |  |         | (a)                                                                                                                                                                                                                                                                                                                                         | Consolidated Group LeverageThe Consolidated
 Group Leverage shall be equal to or less than seventy per cent (70%).           
| |  |         |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                              
| |  |         | (b)                                                                                                                                                                                                                                                                                                                                         | Debt to EBITDA ratioThe ratio of Debt to
 EBITDA on a trailing twelve (12) months basis shall not at any time exceed
 5.5:1.
| |  |         |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                              
| |  |         | (c)                                                                                                                                                                                                                                                                                                                                         | Net WorthThe Net Worth shall not at any
 time be less than one hundred and seventy five million Dollars
 ($175,000,000).     

44

---



| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                           
| | ---- | ------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
| | 13.3 | Vessel undertakings
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.1              | No sale of VesselThe Borrower shall not
 sell or otherwise dispose of the Vessel or any shares in the Vessel nor agree
 to do so without the prior written consent of the Lender.                                                                                                                                                                                                                                    
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.2              | No chartering after Event of DefaultFollowing
 the occurrence and during the continuation of an Event of Default the
 Borrower shall not without the prior written consent of the Lender let the
 Vessel on charter or renew or extend any charter or other contract of
 employment of the Vessel (nor agree to do so).                                                                                              
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.3              | No change in managementThe Borrower shall
 procure that, without the prior written consent of the Lender, there shall be
 no termination of, alteration to, or waiver of any term of, the Management
 Agreement and the Borrower shall not without the prior written consent of the
 Lender permit the Managers to sub-contract or delegate the commercial or
 technical management of the Vessel to any third party.
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.4              | Registration of Vessel The Borrower
 undertakes to maintain the registration of the Vessel under the flag stated
 in Recital (A) (or such other flag acceptable to the Lender in its
 discretion) for the duration of the Facility Period unless the Lender agrees
 otherwise in writing.                                                                                                                            
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.5              | Evidence of current COFRThe Borrower will,
 if and for so long as the Vessel trades in the United States of America and
 Exclusive Economic Zone (as defined in the United States Oil Pollution Act
 1990), obtain, retain and provide the Lender with a copy of, a valid
 Certificate of Financial Responsibility for the Vessel under that Act and
 will comply strictly with the requirements of that Act.        
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | 13.3.6              | ISM Code complianceThe Borrower will:                                                                                                                                                                                                                                                                                                                                                                                
| |      |                     |                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                   | procure that
 the Vessel remains for the duration of the Facility Period subject to a SMS;

45

---



| |  |        |                                        |                                                                                                                                                                                                        
| |  | ------ | -------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |        | (b)                                    | maintain a
 valid and current SMC for the Vessel throughout the Facility Period and
 provide a copy to the Lender;                                                                                     
| |  |        |                                        |                                                                                                                                                                                                        
| |  |        | (c)                                    | procure that
 the ISM Company maintains a valid and current DOC throughout the Facility
 Period and provide a copy to the Lender; and                                                                  
| |  |        |                                        |                                                                                                                                                                                                        
| |  |        | (d)                                    | immediately
 notify the Lender in writing of any actual or threatened withdrawal,
 suspension, cancellation or modification of the SMC of the Vessel or of the
 DOC of the ISM Company.                
| |  |        |                                       
| |  | 13.3.7 | ISPS Code complianceThe Borrower will:
| |  |        |                                       
| |  |        | (a)                                    | for the
 duration of the Facility Period comply with the ISPS Code in relation to the
 Vessel and procure that the Vessel and the ISPS Company comply with the ISPS
 Code;                             
| |  |        |                                        |                                                                                                                                                                                                        
| |  |        | (b)                                    | maintain a valid and current ISSC for the
 Vessel throughout the Facility Period and provide a copy to the Lender; and                                                                                 
| |  |        |                                        |                                                                                                                                                                                                        
| |  |        | (c)                                    | immediately
 notify the Lender in writing of any actual or threatened withdrawal,
 suspension, cancellation or modification of the ISSC.                                                               
| |  |        |                                       
| |  | 13.3.8 | Annex VI complianceThe Borrower will: 
| |  |        |                                       
| |  |        | (a)                                    | for the
 duration of the Facility Period comply with Annex VI in relation to the
 Vessel and procure that the Vessels master and crew are familiar with, and
 that the Vessel complies with, Annex VI;
| |  |        |                                        |                                                                                                                                                                                                        
| |  |        | (b)                                    | maintain a
 valid and current IAPPC for the Vessel throughout the Facility Period and
 provide a copy to the Lender; and                                                                               

46

---



|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|-- | ----------------- | --------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|   |                   |                                                                                                           | (c)                                                                                                                                                                                                                                                                                                                                                                          | immediately
 notify the Lender in writing of any actual or threatened withdrawal,
 suspension, cancellation or modification of the IAPPC.          
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|14 | Events of Default
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   | 14.1              | Events of DefaultEach of the events or
 circumstances set out in this Clause 14.1 is an Event of Default.
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   |                   | 14.1.1                                                                                                    | Non-paymentThe Borrower does not pay on the
 due date any amount payable by it under a Finance Document at the place at
 and in the currency in which it is expressed to be payable.                                                                                                                                                                                        
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   |                   | 14.1.2                                                                                                    | Other obligationsA Security Party or any
 other person (except the Lender) does not comply with any provision of any of
 the Relevant Documents to which that Security Party or person is a party
 (other than as referred to in Clause 14.1.1).                                                                                                                            
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   |                   | 14.1.3                                                                                                    | MisrepresentationAny representation,
 warranty or statement made or deemed to be repeated by a Security Party in
 any Finance Document or any other document delivered by or on behalf of a
 Security Party under or in connection with any Finance Document is or proves
 to have been incorrect or misleading in any material respect when made or
 deemed to be repeated.
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   |                   | 14.1.4                                                                                                    | Cross defaultAny Financial Indebtedness of
 a Security Party:                                                                                                                                                                                                                                                                                                               
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                             
|   |                   |                                                                                                           | (a)                                                                                                                                                                                                                                                                                                                                                                          | is not paid
 when due or within any originally applicable grace period; or                                                                         
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|   |                   |                                                                                                           | (b)                                                                                                                                                                                                                                                                                                                                                                          | is declared
 to be, or otherwise becomes, due and payable before its specified maturity as
 a result of an event of default (however described); or
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|   |                   |                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|   |                   |                                                                                                           | (c)                                                                                                                                                                                                                                                                                                                                                                          | is declared
 by a creditor to be due and payable before its specified maturity as a result
 of such an event.                                      

47

---



| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  | ------ | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 14.1.5 | Insolvency                                                                                             
| |  |        |                                                                                                        
| |  |        | (a)                                                                                                     | A Security
 Party is unable or admits inability to pay its debts as they fall due,
 suspends making payments on any of its debts or, by reason of actual or
 anticipated financial difficulties, commences negotiations with one or more
 of its creditors with a view to rescheduling any of its Financial
 Indebtedness.
| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  |        | (b)                                                                                                     | The value of
 the assets of a Security Party is less than its liabilities (taking into
 account contingent and prospective liabilities).                                                                                                                                                                                  
| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  |        | (c)                                                                                                     | A moratorium
 is declared in respect of any Financial Indebtedness of a Security Party.                                                                                                                                                                                                                                   
| |  |        |                                                                                                        
| |  |        |                                                                                                        
| |  | 14.1.6 | Insolvency proceedingsAny corporate action,
 legal proceedings or other procedure or step is taken for:
| |  |        |                                                                                                        
| |  |        | (a)                                                                                                     | the
 suspension of payments, a moratorium of any Financial Indebtedness,
 winding-up, dissolution, administration, bankruptcy or reorganisation (by way
 of voluntary arrangement, scheme of arrangement or otherwise) of a Security
 Party;                                                                              
| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  |        | (b)                                                                                                     | a
 composition, compromise, assignment or arrangement with any creditor of a
 Security Party;                                                                                                                                                                                                                             
| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  |        | (c)                                                                                                     | the
 appointment of a liquidator, receiver, administrative receiver,
 administrator, compulsory manager, or trustee or other similar officer in
 respect of any Security Party or any of its assets; or                                                                                                                   
| |  |        |                                                                                                         |                                                                                                                                                                                                                                                                                                                           
| |  |        | (d)                                                                                                     | enforcement
 of any Encumbrance over any assets of a Security Party,                                                                                                                                                                                                                                                      
| |  |        |                                                                                                        
| |  |        | or any
 analogous procedure or step is taken in any jurisdiction.                                      

48

---



| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 14.1.7  | Creditors
 processAny expropriation, attachment, sequestration,
 distress or execution affects any asset or assets of a Security Party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.8  | Change in
 ownership or control of the Borrower or the ManagersThe
 Borrower ceases to be a wholly owned Subsidiary of the Corporate Guarantor or
 there is any change in the beneficial ownership or control of the Borrower or
 the Managers from that advised to the Lender by the Borrower on the Signing
 Date.                                                                                                                                                                                                                                                                                                                                                    
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.9  | RepudiationA Security Party or any other person (except the Lender)
 repudiates any of the Relevant Documents to which that Security Party or
 person is a party or evidences an intention to do so.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.10 | Impossibility
 or illegalityAny event occurs which would, or would with
 the passage of time, render performance of any of the Relevant Documents by a
 Security Party or any other party to any such document impossible, unlawful
 or unenforceable by the Lender or a Security Party.                                                                                                                                                                                                                                                                                                                                                                                
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.11 | Conditions subsequent Any of the conditions referred to in Clause 3.5
 is not satisfied within the time reasonably required by the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.12 | Revocation
 or modification of authorizationAny consent, licence,
 approval, authorisation, filing, registration or other requirement of any
 governmental, judicial or other public body or authority which is now, or
 which at any time during the Facility Period becomes, necessary to enable a
 Security Party or any other person (except the Lender) to comply with any of
 its obligations under any of the Relevant Documents is not obtained, is
 revoked, suspended, withdrawn or withheld, or is modified in a manner which
 the Lender considers is, or may be, prejudicial to the interests of the
 Lender, or ceases to remain in full force and effect.
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | 14.1.13 | Curtailment of businessA Security Party
 ceases, or threatens to cease, to carry on all or a substantial part of its
 business or, as a result of intervention by or under the authority of any
 government, the business of                                                                                                                                                                                                                                                                                                                                                                                                                                            

49

---



| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       
| |  | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |         | a Security
 Party is wholly or partially curtailed or suspended, or all or a substantial
 part of the assets or undertaking of a Security Party is seized,
 nationalised, expropriated or compulsorily acquired.                                                                                                                                                                                                                                             
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 14.1.14 | Reduction of capitalA Security Party (other
 than the Corporate Guarantor) reduces its authorised or issued or subscribed
 capital.                                                                                                                                                                                                                                                                                                                          
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 14.1.15 | Loss of VesselThe Vessel suffers a Total
 Loss or is otherwise destroyed, abandoned, confiscated, forfeited or
 condemned as prize, or a similar event occurs in relation to any other vessel
 which may from time to time be mortgaged to the Lender as security for the
 payment of all or any part of the Indebtedness, except that a Total Loss, or
 event similar to a Total Loss in relation to any other vessel, shall not be
 an Event of Default if:
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |         | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Vessel
 or other vessel is insured in accordance with the Security Documents; and                                                                                                                                                                                                 
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       
| |  |         | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                           | no insurer
 has refused to meet or has disputed the claim for Total Loss and it is not
 apparent to the Lender in its discretion that any such refusal or dispute is
 likely to occur; and                                                                                            
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                       
| |  |         | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                           | payment of
 all insurance proceeds in respect of the Total Loss is made in full to the
 Lender within one hundred and eighty (180) days of the occurrence of the
 casualty giving rise to the Total Loss in question or such longer period as
 the Lender may in its discretion agree.
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 14.1.16 | Challenge to registrationThe registration
 of the Vessel or the Mortgage is contested or becomes void or voidable or
 liable to cancellation or termination, or the validity or priority of the
 Mortgage is contested.                                                                                                                                                                                                                                      
| |  |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | 14.1.17 | WarThe country of registration of the
 Vessel becomes involved in war (whether or not declared) or civil war or is
 occupied by any other power                                                                                                                                                                                                                                                                                                              

50

---



|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                  |                                                                                                                                                                                                                                                                                                                                      | and the
 Lender in its discretion considers that, as a result, the security conferred
 by the Security Documents is materially prejudiced.                                                                                                                                                                                                                                                                                               
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                  | 14.1.18                                                                                                                                                                                                                                                                                                                              | Master Agreement terminationA notice is
 given by the Lender under section 6(a) of the Master Agreement, or by any
 person under section 6(b)(iv) of the Master Agreement, in either case
 designating an Early Termination Date for the purpose of the Master
 Agreement, or the Master Agreement is for any other reason terminated,
 cancelled, suspended, rescinded, revoked or otherwise ceases to remain in
 full force and effect.
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                  | 14.1.19                                                                                                                                                                                                                                                                                                                              | Material adverse changeAny event or series
 of events occurs which, in the opinion of the Lender, is likely to have a
 materially adverse effect on the business, assets, financial condition or
 credit worthiness of a Security Party.                                                                                                                                                                                                 
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                  | 14.1.20                                                                                                                                                                                                                                                                                                                              | Notice of terminationAny of the Guarantors gives
 notice to the Lender to determine its obligations under the relevant
 Guarantee.                                                                                                                                                                                                                                                                                                       
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 14.2                             | Acceleration If an Event of Default is
 continuing the Lender may by notice to the Borrower cancel any part of the
 Maximum Amount not then advanced and:                                                                                                                                                                           
|   |                                  |                                                                                                                                                                                                                                                                                                                                     
|   |                                  | 14.2.1                                                                                                                                                                                                                                                                                                                               | declare that
 the Loan, together with accrued interest, and all other amounts accrued or
 outstanding under the Finance Documents are immediately due and payable,
 whereupon they shall become immediately due and payable; and/or                                                                                                                                                                                                      
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                  | 14.2.2                                                                                                                                                                                                                                                                                                                               | declare that
 the Loan is payable on demand, whereupon it shall immediately become payable
 on demand by the Lender.                                                                                                                                                                                                                                                                                                                     
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|15 | Assignment and Sub-Participation
|   |                                  |                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 15.1                             | Right to assignThe Lender may, subject to
 the prior approval of the Borrower (such approval not to be unreasonably
 withheld) and subject to the Lender giving prior notice of such intention to
 the Borrower, and without additional costs to the Borrower, assign or
 transfer all or any of its rights under or pursuant to the

51

---



|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|-- | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   |         | Security Documents
 to any other bank or financial institution, and may grant sub-participations
 in all or any part of the Loan. The Lender may, without the prior approval of
 the Borrower, assign or transfer all or any of its rights under or pursuant
 to the Security
 Documents to any other branch of the Lender, and may grant sub-participations
 in all or any part of the Loan.                                                                                                                                                                                                                                                                                                           
|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|   | 15.2    | Borrowers co-operationThe Borrower will
 co-operate fully with the Lender in connection with any assignment, transfer
 or sub-participation; will execute and procure the execution of such
 documents as the Lender may require in that connection; and irrevocably
 authorises the Lender to disclose to any proposed assignee, transferee or
 sub-participant (whether before or after any assignment, transfer or
 sub-participation and whether or not any assignment, transfer or sub-participation shall take place) all information relating to the Security
 Parties, the Loan, the Relevant Documents and the Vessel which the Lender may
 in its discretion consider necessary or desirable.
|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|   | 15.3    | Rights of assignee or transfereeAny
 assignee or transferee of the Lender shall (unless limited by the express
 terms of the assignment or novation) take the full benefit of every provision
 of the Finance Documents benefitting the Lender.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|   | 15.4    | No assignment or transfer by the BorrowerThe
 Borrower may not assign any of its rights or transfer any of its rights or
 obligations under the Finance Documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|16 | Set-Off
|   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|   | 16.1    | The Lender
 may set off any matured obligation due from the Borrower under any Finance
 Document against any matured obligation owed by the Lender to the Borrower,
 regardless of the place of payment, booking branch or currency of either
 obligation. If the obligations are in different currencies, the Lender may
 Convert either obligation at a market rate of exchange in its usual course of
 business for the purpose of the set-off.                                                                                                                                                                                                                                                      

52

---



|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|-- | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   | 16.2     | Master Agreement rightsThe rights conferred
 on the Lender by this Clause 16 shall be in addition to, and without
 prejudice to or limitation of, the rights of netting and set off conferred on
 the Lender by the Master Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|17 | Payments
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|   | 17.1     | PaymentsEach amount payable by the Borrower
 under a Finance Document shall be paid to such account at such bank as the
 Lender may from time to time direct to the Borrower in the Currency of
 Account and in such funds as are customary at the time for settlement of
 transactions in the relevant currency in the place of payment. Payment shall
 be deemed to have been received by the Lender 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 for the Lender to utilise the amount received for
 value that same day, in which event the payment in question shall be deemed
 to have been received by the Lender on the Business Day next following the
 date of receipt of advice by the Lender.
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|   | 17.2     | No deductions or withholdingsEach payment
 (whether of principal or interest or otherwise) to be made by the Borrower
 under a Finance Document shall, subject only to Clause 17.3, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|   | 17.3     | Grossing-upIf at any time any law requires
 the Borrower 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 Borrower will promptly notify the Lender and, simultaneously with
 making that payment, will pay to the Lender 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,                                                                                                                                                                                                                                                                                                                                                                               

53

---



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |      | the Lender
 receives a net sum equal to the sum which the Lender would have received had
 no deduction or withholding been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | 17.4 | Evidence of deductionsIf at any time the
 Borrower is required by law to make any deduction or withholding from any
 payment to be made by it under a Finance Document, the Borrower 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 (30)
 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.         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | 17.5 | Adjustment of due datesIf any payment or transfer
 of funds to be made under a Finance Document, other than a payment of
 interest on a Drawing, or a payment under the Master Agreement, shall be due
 on a day which is not a Business Day, that payment shall be made on the next
 succeeding Business Day (unless the next succeeding Business Day falls in the
 next calendar month in which event the payment shall be made on the next
 preceding Business Day). Any such variation of time shall be taken into
 account in computing any interest in respect of that payment.                                          
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | 17.6 | Control Account The Lender shall open and
 maintain on its books a control account in the name of the Borrower showing
 the advance of the Loan and the computation and payment of interest and all
 other sums due under this Agreement and the Master Agreement. The Borrowers
 obligations to repay the Loan and to pay interest and all other sums due
 under this Agreement and the Master Agreement shall be evidenced by the
 entries from time to time made in the control account opened and maintained under
 this Clause 17.6 and those entries will, in the absence of manifest error, be
 conclusive and binding.

54

---



|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|-- | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|18 | Notices
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   | 18.1    | Communications in writingAny communication
 to be made under or in connection with this Agreement shall be made in writing
 and, unless otherwise stated, may be made by fax or letter.                                                                                      
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   | 18.2    | AddressesThe address and fax number (and
 the department or officer, if any, for whose attention the communication is
 to be made) of each party to this Agreement for any communication or document
 to be made or delivered under or in connection with this Agreement are:
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | 18.2.1                                                                                                                                                                                                                                                                        | in the case
 of the Borrower, c/o Safety Management Overseas S.A., 32 Avenue Karamanli,
 GR-166 05 Voula, Athens, Greece (telex no: 215050 answerback: SAFE GR, fax
 no: +30 210 895 6900) marked for the attention of Mr Konstantinos
 Adamopoulos; and
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | 18.2.2                                                                                                                                                                                                                                                                        | in the case
 of the Lender, to the Lender at its address at the head of this Agreement
 (fax no: +44 207 626 5956 tel no: +44 207 621 6045) marked for the attention
 of: Shipping Department;                                                          
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | or any
 substitute address, fax number, department or officer as either party may
 notify to the other by not less than five (5) Business Days notice.                                                                                                                      
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   | 18.3    | DeliveryAny communication or document made
 or delivered by one party to this Agreement to the other under or in
 connection this Agreement will only be effective:                                                                                                          
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | 18.3.1                                                                                                                                                                                                                                                                        | if by way of
 fax, when received in legible form; or                                                                                                                                                                                                    
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | 18.3.2                                                                                                                                                                                                                                                                        | if by way of
 letter, when it has been left at the relevant address or five (5) Business
 Days after being deposited in the post postage prepaid in an envelope
 addressed to it at that address;                                                       
|   |         |                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                         
|   |         | and, if a
 particular department or officer is specified as part of its address details
 provided under Clause 18.2, if addressed to that department or officer.                                                                                                             

55

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Any
 communication or document to be made or delivered to the Lender will be
 effective only when actually received by the Lender.                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   | 18.4                                                                                                                                                                                                                                                                                                                                                                                                                                             | English languageAny notice given under or
 in connection with this Agreement must be in English. All other documents
 provided under or in connection with this Agreement must be:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 18.4.1                                                                                                                                                                             | in English;
 or                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 18.4.2                                                                                                                                                                             | if not in
 English, and if so required by the Lender, accompanied by a certified English
 translation and, in this case, the English translation will prevail unless
 the document is a constitutional, statutory or other official document.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|19 | Partial Invalidity                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   | If, at any
 time, any provision of a Finance Document 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.                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|20 | Remedies and Waivers                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   | No failure
 to exercise, nor any delay in exercising, on the part of the Lender, any
 right or remedy under a Finance Document shall operate as a waiver, nor shall
 any single or partial exercise of any right or remedy prevent any further or
 other exercise or the exercise of any other right or remedy. The rights and
 remedies provided in this Agreement are cumulative and not exclusive of any
 rights or remedies provided by law.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|21 | Miscellaneous                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                    |                                                                                                                                                                                                                                              
|   | 21.1                                                                                                                                                                                                                                                                                                                                                                                                                                             | No oral
 variationsNo variation or amendment of a Finance Document
 shall be valid unless in writing and signed on behalf of the Lender.                                          

56

---



|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|-- | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   | 21.2                 | Further
 AssuranceIf any provision of a Finance Document shall be
 invalid or unenforceable in whole or in part by reason of any present or
 future law or any decision of any court, or if the documents at any time held
 by or on behalf of the Lender are considered by the Lender for any reason
 insufficient to carry out the terms of this Agreement, then from time to time
 the Borrower will promptly, on demand by the Lender, execute or procure the
 execution of such further documents as in the opinion of the Lender are
 necessary to provide adequate security for the repayment of the Indebtedness.
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|   | 21.3                 | Rescission
 of payments etc. Any
 discharge, release or reassignment by the Lender of any of the security
 constituted by, or any of the obligations of a Security Party contained in, a
 Finance Document shall be (and be deemed always to have been) void if any act
 (including, without limitation, any payment) as a result of which such
 discharge, release or reassignment was given or made is subsequently wholly
 or partially rescinded or avoided by operation of any law.                                                                                                                                 
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|   | 21.4                 | CertificatesAny certificate or statement signed by an authorised
 signatory of the Lender purporting to show the amount of the Indebtedness (or
 any part of the Indebtedness) or any other amount referred to in any Finance
 Document shall, save for manifest error or on any question of law, be
 conclusive evidence as against the Borrower of that amount.                                                                                                                                                                                                                                                        
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|   | 21.5                 | CounterpartsThis Agreement may be executed
 in any number of counterparts each of which shall be original but which shall
 together constitute the same instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|   | 21.6                 | Contracts (Rights of Third Parties) Act 1999A
 person who is not a party to this Agreement has no right under the Contracts
 (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
 term of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                       
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|22 | Law and Jurisdiction
|   |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|   | 22.1                 | Governing lawThis Agreement shall in all
 respects be governed by and interpreted in accordance with English law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

57

---



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                               
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 22.2 | JurisdictionFor the exclusive benefit of
 the Lender, the parties to this Agreement irrevocably agree that the courts
 of England are to have jurisdiction to settle any disputes which may arise
 out of or in connection with this Agreement and that any proceedings may be
 brought in those courts.                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                               
| | 22.3 | Alternative jurisdictionsNothing contained
 in this Clause 22 shall limit the right of the Lender to commence any
 proceedings against the Borrower in any other court of competent jurisdiction
 nor shall the commencement of any proceedings against the Borrower in one or
 more jurisdictions preclude the commencement of any proceedings in any other
 jurisdiction, whether concurrently or not.                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                               
| | 22.4 | Waiver of objectionsThe Borrower
 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 22, 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.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 22.5 | Service of processWithout prejudice to any
 other mode of service allowed under any relevant law, the Borrower:                                                                                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                               
| |      | 22.5.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 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 connection with this Agreement; and
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                               
| |      | 22.5.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | agrees that
 failure by a process agent to notify the will not invalidate the proceedings
 concerned.                                                                                                                         

58

---



SCHEDULE 1: Conditions Precedent and
Subsequent

Part I: Conditions precedent

|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|- | ---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | Security Parties
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  | (a)              | Constitutional DocumentsCopies of the
 constitutional documents of each Security Party together with such other
 evidence as the Lender may reasonably require that each Security Party is
 duly incorporated in its country of incorporation and remains in existence
 with power to enter into, and perform its obligations under, the Relevant
 Documents to which it is or is to become a party.
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  | (b)              | Certificates of good standingA certificate
 of good standing in respect of each Security Party (if such a certificate can
 be obtained).                                                                                                                                                                                                                                                            
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  | (c)              | Board resolutionsA copy of a resolution of
 the board of directors of each Security Party:                                                                                                                                                                                                                                                                                                          
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  |                  | (i)                                                                                                                                                                                                                                                                                                                                                                                                  | approving
 the terms of, and the transactions contemplated by, the Relevant Documents to
 which it is a party and resolving that it execute those Relevant Documents;
 and          
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  |                  | (ii)                                                                                                                                                                                                                                                                                                                                                                                                 | authorising
 a specified person or persons to execute those Relevant Documents (and all
 documents and notices to be signed and/or despatched under those documents)
 on its behalf.
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  | (d)              | Officers certificatesA certificate of a
 duly authorised officer of each Security Party certifying that each copy
 document relating to it specified in this Part I of Schedule 1 is correct,
 complete and in full force and effect as at a date no earlier than the
 Signing Date and setting out the names of the directors and officers of that
 Security Party.                               
|  |                  |                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                     
|  | (e)              | Powers of attorneyThe notarially attested
 and legalised power of attorney of each Security Party under which any
 documents are to be executed or transactions undertaken by that Security
 Party.                                                                                                                                                                                                 

59

---



|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|- | ------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Security and related documents
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  | (a)                            | Vessel documentsPhotocopies, certified as
 true by a director or the secretary or the duly authorised attorney of the
 Borrower, of:                                                                                                                                                                                                            
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (i)                                                                                                                                                                                                                                                                                                                                              | the
 Management Agreement;                                                                                                                              
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (ii)                                                                                                                                                                                                                                                                                                                                             | the Vessels
 current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution
 Prevention and Load Line Certificates;                        
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (iii)                                                                                                                                                                                                                                                                                                                                            | the Vessels
 current Certificate of Financial Responsibility issued pursuant to the United
 States Oil Pollution Act 1990 (if required for the Vessel);
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (iv)                                                                                                                                                                                                                                                                                                                                             | the Vessels
 current SMC;                                                                                                                              
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (v)                                                                                                                                                                                                                                                                                                                                              | the ISM Companys
 current DOC;                                                                                                                         
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (vi)                                                                                                                                                                                                                                                                                                                                             | the Vessels
 current ISSC;                                                                                                                             
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (vii)                                                                                                                                                                                                                                                                                                                                            | the Vessels
 current IAPPC;                                                                                                                            
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (viii)                                                                                                                                                                                                                                                                                                                                           | the Vessels
 current Tonnage Certificate; and                                                                                                          
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | (ix)                                                                                                                                                                                                                                                                                                                                             | the Existing
 Charter,                                                                                                                                  
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  |                                | in each case
 together with all addenda, amendments or supplements.                                                                                                                                                                                                                                                                             
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  | (b)                            | Evidence of Borrowers titleEvidence that
 on the Drawdown Date (i) the Vessel will be at least provisionally registered
 under the flag stated in Recital (A) in the ownership of the Borrower and
 (ii) the Mortgage will be capable of being registered against the Vessel with
 first priority.                                             
|  |                                |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                         
|  | (c)                            | Evidence of insuranceEvidence that the
 Vessel is insured in the manner required by the Security Documents and that
 letters of undertaking will be issued in the manner required by the Security
 Documents, together with (if required by the Lender) the written approval of
 the Insurances by an insurance adviser appointed by the Lender.

60

---



|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|- | -------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  | (d)            | Confirmation of classA Certificate of
 Confirmation of Class for hull and machinery confirming that the Vessel is
 classed +100A14+LMC with Lloyds Register of Shipping or such other
 classification society as may be acceptable to the Lender in its absolute
 discretion free of recommendations affecting class.                                                                                                                                                                                                                                                                                                                 
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (e)            | Security DocumentsThe Security Documents,
 together with all other documents required by any of them, including, without
 limitation, all notices of assignment and/or charge and evidence that those
 notices will be duly acknowledged by the recipients.                                                                                                                                                                                                                                                                                                                                                                            
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (f)            | Side LetterThe side letter evidencing the
 Current Shareholders of the Corporate Guarantor issued by the Corporate
 Guarantor in favour of the Lender in such form as the Lender may require.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (g)            | MandatesSuch duly signed forms of mandate,
 and/or other evidence of the opening of the Accounts, as the Lender may
 require.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (h)            | Managers confirmationThe written
 confirmation of the Managers that, throughout the Facility Period unless
 otherwise agreed by the Lender, they will remain the commercial and technical
 managers of the Vessel and that they will not, without the prior written
 consent of the Lender, sub-contract or delegate the commercial or technical
 management of the Vessel to any third party and confirming in terms
 acceptable to the Lender that, following the occurrence of an Event of
 Default, all claims of the Managers against the Borrower shall be
 subordinated to the claims of the Lender under the Finance Documents.
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (i)            | No disputesThe written confirmation of the
 Borrower that there is no dispute under any of the Relevant Documents as
 between the parties to any such document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|3 | Legal opinions
|  |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  | (a)            | If a
 Security Party is incorporated in a jurisdiction other than England and Wales
 or if any Finance Document is governed by the laws of a jurisdiction other
 than                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

61

---



|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|- | ---------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |                              | England and
 Wales, a legal opinion of the legal advisers to the Lender in each relevant
 jurisdiction, substantially in the form or forms provided to the Lender prior
 to the Signing Date or confirmation satisfactory to the Lender that such an
 opinion will be given.                                                                                                                                                     
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|4 | Other documents and evidence
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|  | (a)                          | Drawdown NoticeA duly completed Drawdown
 Notice.                                                                                                                                                                                                                                                                                                                                                                                
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|  | (b)                          | Process agentEvidence that any process
 agent referred to in Clause 22.5 and any process agent appointed under any
 other Finance Document has accepted its appointment.                                                                                                                                                                                                                                                         
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|  | (c)                          | Other authorisationsA copy of any other
 consent, licence, approval, authorisation or other document, opinion or
 assurance which the Lender considers to be necessary or desirable (if it has notified
 the Borrower accordingly) in connection with the entry into and performance
 of the transactions contemplated by any of the Relevant Documents or for the
 validity and enforceability of any of the Relevant Documents.
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|  | (d)                          | FeesEvidence that the fees, costs and
 expenses then due from the Borrower under Clause 9 and Clause 10 have been
 paid or will be paid by the Drawdown Date.                                                                                                                                                                                                                                                                    
|  |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|  | (e)                          | Know your customer documentsSuch
 documentation and other evidence as is reasonably requested by the Lender in
 order for the Lender to comply with all necessary know your customer or
 similar identification procedures in relation to the transactions
 contemplated in the Finance Documents.                                                                                                                           

62

---



Part II: Conditions subsequent

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Evidence of Borrowers titleCertificate of
 ownership and encumbrance (or equivalent) issued by the Registrar of Ships
 (or equivalent official) of the flag stated in Recital (A) confirming that
 (a) the Vessel is permanently registered under that flag in the ownership of
 the Borrower, (b) the Mortgage has been registered with first priority
 against the Vessel and (c) there are no further Encumbrances registered
 against the Vessel.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2  | Letters of undertakingLetters of
 undertaking in respect of the Insurances as required by the Security
 Documents together with copies of the relevant policies or cover notes or
 entry certificates duly endorsed with the interest of the Lender.                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3  | Acknowledgements of noticesAcknowledgements
 of all notices of assignment and/or charge given pursuant to the Security
 Documents.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4  | Legal opinionsSuch of the legal opinions
 specified in Part I of this Schedule 1 as have not already been provided to
 the Lender.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5  | Companies Act registrationsEvidence that
 the prescribed particulars of the Security Documents have been delivered to
 the Registrar of Companies of Cyprus within the statutory time limit.                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6  | Mortgagees Insurance FeesPayment to the
 Lender of all fees in relation to inspections, valuations, legal fees and
 premiums for Mortgagees Insurances.                                                                                                                                                                                                                                                                                             

63

---



SCHEDULE 2: Calculation of Mandatory Cost

|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | The
 Mandatory Cost is an addition to the interest rate to compensate the Lender
 for the cost of compliance with (a) the requirements of the Bank of England
 and/or the Financial Services Authority (or, in either case, any other
 authority which replaces all or any of its functions) or (b) the requirements
 of the European Central Bank.
|  |                                                                                                                                                                                                                                                                                                                                                    
|  | (a)                                                                                                                                                                                                                                                                                                                                                 | On the first
 day of each Interest Period (or as soon as possible thereafter) the Lender
 shall calculate, as a percentage rate, a rate (the Additional Cost Rate) in accordance with
 the paragraphs set out below.                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  | (b)                                                                                                                                                                                                                                                                                                                                                 | The
 Additional Cost Rate for the Lender if lending from an office in the
 euro-zone will be the percentage notified by the Lender to the Borrower to be
 its reasonable determination of the cost (expressed as a percentage of the
 Loan) of complying with the minimum reserve requirements of the European
 Central Bank as a result of making the Loan from that office.
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  | (c)                                                                                                                                                                                                                                                                                                                                                 | The
 Additional Cost Rate for the Lender if lending from an office in the United
 Kingdom will be calculated by the Lender as follows:                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  | (d)                                                                                                                                                                                                                                                                                                                                                 | where the
 Loan is denominated in sterling:                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                     | BY + S(Y -
 Z) + F x 0.01 per cent per annum
           100 - (B + S)                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  | (e)                                                                                                                                                                                                                                                                                                                                                 | where the
 Loan is denominated in any currency other than sterling:                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                     | F x 0.01
 per cent per annum
     300                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                              
|  | where:                                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                    
|  | B                                                                                                                                                                                                                                                                                                                                                   | is the
 percentage of eligible liabilities (assuming these to be in excess of any
 stated minimum) which the Lender is from time to time required to maintain as
 an interest free cash ratio deposit with the Bank of England to comply with
 cash ratio requirements;                                                                                                      

64

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|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | Y                                                                                                                                                                                                                                                                                            | is the
 percentage rate of interest (excluding the Margin and the Mandatory Cost and,
 if the Loan is an overdue amount, the additional rate of interest specified
 in Clause 7.8) payable for the relevant Interest Period on the Loan;                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | S                                                                                                                                                                                                                                                                                            | is the
 percentage (if any) of eligible liabilities which the Lender is required from
 time to time to maintain as interest bearing special deposits with the Bank
 of England;                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Z                                                                                                                                                                                                                                                                                            | is the
 interest rate per annum payable by the Bank of England to the Lender on
 special deposits; and                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | F                                                                                                                                                                                                                                                                                            | is the
 charge payable by the Lender to the Financial Services Authority under
 paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or the
 equivalent provisions in any replacement regulations (with, for this purpose,
 the figure for the minimum amount in paragraph 2.02b or such equivalent
 provision deemed to be zero), expressed in pounds per £l million of the fee
 base of the Lender.
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|2 | For the
 purpose of this Schedule:                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                             
|  | (a)                                                                                                                                                                                                                                                                                          | eligible liabilities and special deposits have the meanings given
 to them at the time of application of the formula by the Bank of England;                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | (b)                                                                                                                                                                                                                                                                                          | fee base has the meaning given to it in
 the Fees Regulations;                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | (c)                                                                                                                                                                                                                                                                                          | Fees Regulations means the regulations
 governing periodic fees contained in the FSA Supervision Manual or such other
 law or regulation as may be in force from time to time in respect of the
 payment of fees for the acceptance of deposits.                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                 
|3 | In the
 application of the formula B, Y, S and Z are included in the formula as
 figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is
 calculated as 0.5. x 15. Each rate calculated in accordance with the formula
 is, if necessary, rounded upward to four decimal places.
|  |                                                                                                                                                                                                                                                                                             
|4 | If a change
 in circumstances has rendered, or will render, the formula inappropriate, the
 Lender shall notify the Borrower of the manner in which the Mandatory Cost
 will                                                                                                                

65

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| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | subsequently
 be calculated. The manner of calculation so notified by the Lender shall, in
 the absence of manifest error, be binding on the Borrower.

66

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SCHEDULE 3: Form of Drawdown Notice

|      |                               
|----- | ------------------------------
|To:   | DNB NOR BANK ASA              
|      |                               
|From: | Eniaprohi Shipping Corporation

2008

Dear Sirs,

Drawdown Notice

We
refer to the reducing revolving multi-currency credit facility agreement dated
[          ] 2008 made between ourselves and yourselves (the Agreement).

Words
and phrases defined in the Agreement have the same meaning when used in this
Drawdown Notice.

Pursuant
to Clause 4 of the Agreement, we irrevocably request that you advance a Drawing
in the sum of [                 
                    ] to us on
[          ] 2008, which is a Business Day, by paying the
amount of the advance to [          ].

We
warrant that the representations and warranties contained in Clause 12.1 of the
Agreement are true and correct at the date of this Drawdown Notice and will be
true and correct on          2008, that no Default has occurred and is continuing, and
that no Default will result from the advance of the sum requested in this
Drawdown Notice.

We
select the period of [          ] months as the Interest Period in respect of the said
Drawing.

Yours faithfully

|
|
|

For and on behalf ofENIAPROHI SHIPPING CORPORATION

67

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SCHEDULE 4
Form of Compliance Certificate

|      |                  
|----- | -----------------
|To:   | DnB NOR BANK ASA 
|      |                  
|From: | Safe Bulkers Inc.

Dated:

Dear Sirs

[          ]  US$45,000,000 Reducing revolving
multi-currency credit facility agreement dated [          ] 2008 as amended,
supplemented, novated and/or replaced from time to time (the Agreement)

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

The covenant
calculations below are made as of, and in respect of the six (6) month period
ending on [          ].

We confirm
that:

|                 |  |                                                   |  |            |  |                       
|---------------- |  | ------------------------------------------------- |  | ---------- |  | ----------------------
|Agreement
Clause |  | Covenant
determination/Calculation compliance     |  |            |  | (min/max amount)      
|                 |  |                                                   |  |            |  |                       
|13.2.21(a)       |  | Consolidated Group Leverage                       |  |            |  |                       
|                 |  | Consolidated
 Total Liabilities                   |  | USD[     ] |  |                       
|                 |  | ÷
 Consolidated Total Assets                      |  | USD[     ] |  |                       
|                 |  | =
 Consolidated Group Leverage                    |  | [     %]   |  | [maximum
 70%]        
|                 |  |                                                   |  |            |  |                       
|13.2.21(b)       |  | Debt to EBITDA ratio                              |  |            |  |                       
|                 |  | Debt                                              |  | USD[     ] |  |                       
|                 |  | ÷ EBITDA                                          |  | USD[     ] |  |                       
|                 |  | =Debt to
 EBITDA ratio                            |  | [     ]    |  | [maximum
 5.5:1]      
|                 |  |                                                   |  |            |  |                       
|13.2.21 (c)      |  | Net Worth                                         |  |            |  |                       
|                 |  | Consolidated
 Total Assets                        |  | USD[     ] |  |                       
|                 |  | (minus)
 Consolidated TotalLiabilities USD[     ] |  |            |  |                       
|                 |  | = Net Worth                                       |  | [     %]   |  | [min.
 USD175,000,000]

68

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[We confirm
that no Default is continuing.]*

|        |                   |  |                  
|------- | ----------------- |  | -----------------
|Signed: |                   |  |                  
|        | Director          |  | Director         
|       
|        | of                |  | of               
|       
|        | Safe Bulkers Inc. |  | Safe Bulkers Inc.

|  |                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| 
|* | If this statement cannot be made, the
certificate
 should identify any Default that is continuing and the steps, if any, being taken
 to remedy it.

69

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IN WITNESSof which
the parties to this Agreement have executed this Agreement the day and year
first before written.

|                                   |   | 
|---------------------------------- | - | 
|SIGNEDby KONSTANTINOS ADAMOPOULOS  | ) | 
|duly
 authorised for and on behalf | ) | 
|of ENIAPROHI SHIPPING CORPORATION  | ) | 
|                                   |   | 
|SIGNEDby CHRISTODOULOS VARIZIS     | ) | 
|duly
 authorised for and on behalf | ) | 
|of DnB NOR BANK ASA                | ) | 

---