Exhibit 4.32

Private & Confidential

|                                                     |    
|---------------------------------------------------- | ---
|Dated 20 November 2008                               |    
|                                                     |    
|                                                     |    
|SAFE BULKERS, INC.                                   | (1)
|                                                     |    
|and                                                  |    
|                                                     |    
|BAYERISCHE HYPO- UND VEREINSBANK
 AKTIENGESELLSCHAFT | (2)
|                                                     |    
|                                                     |    
|                                                    
|CORPORATE GUARANTEE                                  |    
|                                                    
|                                                     |    

(NORTON ROSE LOGO)

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Contents

|                                           |                                 |     
|------------------------------------------ | ------------------------------- | ----
|Clause                                     |                                 | Page
|                                           |                                 |     
|1                                          | Interpretation                  | 1   
|                                           |                                 |     
|2                                          | Guarantee                       | 5   
|                                           |                                 |     
|3                                          | Payments and Taxes              | 8   
|                                           |                                 |     
|4                                          | Representations
 and warranties | 9   
|                                           |                                 |     
|5                                          | Undertakings                    | 12  
|                                           |                                 |     
|6                                          | Set-off                         | 15  
|                                           |                                 |     
|7                                          | Benefit of this
 Guarantee      | 15  
|                                           |                                 |     
|8                                          | Notices and other
 matters      | 15  
|                                           |                                 |     
|9                                          | Law and
 jurisdiction           | 17  
|                                           |                                 |     
|Schedule 1 Form of
 Compliance Certificate | 18                             

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|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|--- | ---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    | THIS GUARANTEEis dated 20 November 2008 and
 made BETWEEN:
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | (1)                                                        | SAFE BULKERS, INC.of Trust Company Complex,
 Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the Guarantor);
 and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | (2)                                                        | BAYERISCHE HYPO- UND VEREINSBANK
 AKTIENGESELLSCHAFThaving its registered office at Am Tucherpark 16,
 D-80538, Munich, Germany and acting through its office at 7 Heraklitou
 Street, 106 73 Athens, Greece (the Bank).                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | WHEREAS:                                                  
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | (A)                                                        | by a loan
 agreement dated 7 March 2007 as amended and supplemented by a first
 supplemental letter dated 14 May 2008, by a second supplemental letter dated
 15 May 2008 and by a supplemental agreement dated 20 November 2008 (together
 the Agreement)
 each made between (inter alios) (1) Pemer Shipping Ltd as borrower (the Borrower)
 and (2) the Bank, the Bank has agreed, upon and subject to the terms and
 conditions of the Agreement, to make (and has made) available to the
 Borrower, a multi-currency loan facility of up to (originally) US$36,000,000,
 which was subsequently increased by $4,167,615.01 pursuant to the first
 supplemental letter referred to above;
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | (B)                                                        | by a 1992 ISDA
 master agreement (including a schedule thereto) dated as of 7 March 2007 (the
 Master
 Swap Agreement) and made between the Borrower and the Bank, the
 Bank agreed the terms and conditions upon which it would enter into interest
 rate swap or other derivative transactions with the Borrower in respect of
 the Loan, whether in whole or in part (as the case may be) from time to time;
 and                                                                                                                                                                                                                                                                           
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | (C)                                                        | the execution and
 delivery of this Guarantee is one of the conditions to the Bank continuing to
 make the said loan facility available under the Agreement and this Guarantee
 is the Corporate Guarantee referred to in the Agreement and it constitutes a
 Security Document.                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    | IT IS AGREEDas follows:                                   
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|1   |                                                            | Interpretation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|1.1 |                                                            | Defined
 expressions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | In this Guarantee,
 unless the context otherwise requires or unless otherwise defined in this
 Guarantee, words and expressions defined in the Agreement and used in this
 Guarantee shall have the same meanings when used in this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|1.2 |                                                            | Definitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | In this Guarantee,
 unless the context otherwise requires:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | Accounting
 Information means (a) the annual audited consolidated financial
 statements of the Group, (b) the semi-annual unaudited consolidated financial
 statements of the Group and (c) the quarterly unaudited consolidated
 financial statements of the Group, each as provided or (as the context may
 require) to be provided to the Bank in accordance with clause 5.1.4;                                                                                                                                                                                                                                                                                                             
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | Accounting
 Period means (a) each financial year of the Guarantor, (b) each
 financial half-year of the Guarantor and (c) each financial quarter of each
 financial year of the Guarantor, for which Accounting Information is required
 to be delivered pursuant to this Guarantee;                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | Applicable
 Accounting Principles means the most recent and up-to-date US
 GAAP applicable at any relevant time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|    |                                                            | Bank
 includes the successors in title, Assignees and Transferees of the Bank;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Borrowed
 Money means Indebtedness in respect of (i) money borrowed or
 raised and debit balances at banks, (ii) any bond, note, loan stock,
 debenture or similar debt instrument, (iii) acceptance or documentary credit
 facilities, (iv) receivables sold or discounted (otherwise than on a
 non-recourse basis), (v) deferred payments for assets or services acquired,
 (vi) finance leases and hire purchase contracts, (vii) swaps, forward
 exchange contracts, futures and other derivatives, (viii) any other
 transaction (including without limitation forward sale or purchase
 agreements) having the commercial effect of a borrowing or raising of money
 or of any of (ii) to (vii) above and (ix) guarantees in respect of
 Indebtedness of any person falling within any of (i) to (viii) above;
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | Collateral
 Instruments means notes, bills of exchange, certificates of
 deposit and other negotiable and non-negotiable instruments, guarantees,
 indemnities and other assurances against financial loss and any other
 documents or instruments which contain or evidence an obligation (with or
 without security) to pay, discharge or be responsible directly or indirectly
 for, any indebtedness or liabilities of the Borrower or any other person
 liable and includes any documents or instruments creating or evidencing a
 mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
 assignment, trust arrangement or security interest of any kind;                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | Compliance
 Certificate means a certificate in the form set out in schedule
 1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | Consolidated
 Adjusted Leverage Ratio means, as of the last day of an
 Accounting Period or on any other day, the ratio of (a) the Consolidated
 Liabilities to (b) the Consolidated Total Assets, as stated in the then most
 recent and relevant Accounting Information;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | Consolidated
 Adjusted Net Worth means the aggregate of the amounts paid-up or
 credited as paid-up on the Guarantors issued share capital and the amount of
 the consolidated capital and revenue reserves of the Group (including any
 share premium account, capital redemption reserve fund and any credit balance
 on the consolidated profit and loss account of the Group) all as shown by the
 latest consolidated balance sheet and profit and loss account of the Group
 delivered under this Guarantee but after:                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | deducting any
 debit balance on such consolidated profit and loss account;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | deducting any
 amount shown in such consolidated balance sheet in respect of goodwill
 (including goodwill arising on consolidation) and other intangible assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | deducting (so far
 as not otherwise excluded as attributable to minority interests) a sum equal
 to the aggregate of the amount by which the book value of any fixed assets of
 any member of the Group has been written up after 31 December 2007 (or, in
 the case of a company becoming a subsidiary after that date, the date on
 which that company became a subsidiary) by way of revaluation. For the
 purposes of this paragraph (c) any increase in the book value of any fixed
 asset resulting from its transfer by one member of the Group to another
 member of the Group shall be deemed to result from a writing up of its book
 value by way of revaluation;
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | excluding amounts set
 aside for taxation as at the date of such balance sheet and making such
 adjustments as may be appropriate in respect of any significant additional
 taxation expected to result from transactions carried out by any member of
 the Group after such date and not reflected in that balance sheet;                                                                                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | deducting all
 amounts attributable to minority interests in Subsidiaries;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | making such
 adjustments as may be appropriate in respect of any variation in the amount
 of such paid up share capital or any such reserves after the date of the
 relevant balance sheet (but so that no such adjustment shall be made in
 respect of any variation in profit and loss account except to the extent of
 any profit or loss, calculated on a cumulative basis, recorded in the
 consolidated profit and loss account of the Group delivered to the                                                                                                                                                                                                         

2

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Bank before the
 date of this Guarantee, or under clause 5.1.4 in respect of any subsequent
 period);                                                                                                                                                                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | making such
 adjustments as may be appropriate in respect of any distribution declared,
 recommended or made by any member of the Group (otherwise than attributable
 directly or indirectly to the Guarantor) out of profits earned up to and
 including the date of the latest audited balance sheet of that member of the
 Group to the extent that such distribution is not provided for in that
 balance sheet;
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | making such
 adjustments as may be appropriate in respect of any variation in the
 interests of the Guarantor in its Subsidiaries since the date of the latest
 consolidated balance sheet of the Group;                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | if the calculation
 is required for the purpose of or in connection with a transaction under or
 in connection with which any company is to become or cease to be a Subsidiary
 of the Guarantor, making all such adjustments as would be appropriate if that
 transaction had been carried into effect;                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | adding the
 relevant excess in the event that the Fleet Market Value exceeds the book
 values of the Fleet Vessels as shown in the then most recent and relevant Accounting
 Information;                                                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | deducting the
 relevant shortfall in the event that the Fleet Market Value is less than the
 book values of the Fleet Vessels as shown in the then most recent and
 relevant Accounting Information; and                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | making such
 adjustments as may be appropriate in the opinion of the Bank in order that
 the above amounts are calculated in accordance with the Applicable Accounting
 Principles;                                                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Consolidated
 Current Assets means, as of the last day of an Accounting Period
 or on any other day, the aggregate of the cash and marketable securities,
 trade and other receivables from persons other than a member of the Group
 realisable within one (1) year, inventories and prepaid expenses which are to
 be charged to income within one (1) year less any doubtful debts and any
 discounts or allowances given, in each case in relation to the Group, as
 stated in the then most recent and relevant Accounting Information;
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Consolidated
 Debt means, as of the last day of an Accounting Period or on any
 other day, the aggregate amount of Borrowed Money owed by the members of the
 Group (but excluding Borrowed Money of the type referred to in paragraphs
 (v), (vii) and (viii) of the definition of Borrowed Money in this clause
 1.2), as stated in the then most recent and relevant Accounting Information;                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Consolidated
 Debt Service Ratio means, as of the last day of an Accounting
 Period or on any other day, the ratio of Consolidated Debt to Consolidated
 EBITDA in respect of the Rolling Four Quarter Period ending on such day, each
 as stated in the then most recent and relevant Accounting Information;                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | Consolidated
 EBITDA means, as of the last day of an Accounting Period or on
 any other day, the consolidated net pre-taxation profits of the Group in
 respect of the Rolling Four Quarter Period ending on such day, as stated in
 the then most recent and relevant Accounting Information, and all as adjusted
 by:                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | adding back
 Consolidated Net Interest Expense;                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | taking no account
 of any exceptional or extraordinary item;                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | adding back
 depreciation and amortisation;                                                                                                                                                                                                                                                                                                                                                                         

3

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | deducting any
 non-cash income an non-cash gains; and                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | taking no account
 of any revaluation of an asset or any loss or gain over book value arising on
 the disposal of an asset (otherwise than in the ordinary course of trading)
 by a member of the Group during that Rolling Four Quarter Period;
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Consolidated
 Liabilities means, as of the last day of an Accounting Period or on
 any other day, the aggregate amount of Liabilities owed by the members of the
 Group, as stated in the then most recent and relevant Accounting Information;                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Consolidated
 Net Interest Expense means, as of the last day of an Accounting
 Period or on any other day, all interest and other financing charges incurred
 or paid by the Group minus all interest income received by the Group in
 respect of the Rolling Four Quarter Period ending on such day, as stated in
 the then most recent and relevant Accounting Information;                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Consolidated
 Tangible Fixed Assets means, as of the last day of an Accounting
 Period or on any other day, the aggregate of (a) the Fleet Market Value and
 (b) the book value (less depreciation computed in accordance with the Applicable
 Accounting Principles consistently applied) on a consolidated basis of all
 other tangible fixed assets of the Group (i.e. excluding Fleet Vessels), as
 stated in the then most recent and relevant Accounting Information;    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Consolidated
 Total Assets means, at any relevant time, the aggregate of
 Consolidated Current Assets and Consolidated Tangible Fixed Assets;                                                                                                                                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Fleet
 Market Value means, as of the date of calculation, the aggregate
 market value of the Fleet Vessels as most recently determined pursuant to
 valuations obtained and made in accordance with clause 5.1.5 of this
 Guarantee and the provisions of clause 9.2.2 of the Agreement (at the cost of
 the Guarantor) (and for the purposes of this Guarantee and the calculation of
 Fleet Market Value, such clause 9.2.2 shall apply to this Guarantee mutatis
 mutandis);
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Fleet
 Vessels means the vessels (including, but not limited to, the
 Ship) from time to time owned by the members of the Group and Fleet
 Vessel means any of them;                                                                                                                                                                                                                                                                                                         
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Group
 means, together, the Guarantor and its Subsidiaries from time to time
 (including, for the avoidance of doubt, the Borrower) and member of
 the Group shall be construed accordingly;                                                                                                                                                                                                                                                                                 
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Guarantee
 includes each separate or independent stipulation or agreement by the
 Guarantor contained in this Guarantee;                                                                                                                                                                                                                                                                                                                                                       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Guaranteed
 Liabilities means all moneys, obligations and liabilities
 expressed to be guaranteed by the Guarantor in clause 2.1;                                                                                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Guarantor
 includes the Guarantors successors in title;                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Hadjioannou
 Family means Mr Polys V. Hajioannou, Mr Nicolaos V. Hadjioannou,
 Ms Eleni V. Hajioannou and Ms Maria V. Hajioannou and their direct lineal
 descendants;                                                                                                                                                                                                                                                                                                         
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Incapacity
 means, in relation to a person, the death, bankruptcy, unsoundness of mind,
 insolvency, liquidation, dissolution, winding-up, administration,
 receivership, amalgamation, reconstruction or other incapacity of that person
 whatsoever (and, in the case of a partnership, includes the termination or
 change in the composition of the partnership);                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | Liabilities
 means, in relation to any member of the Group (the debtor):                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Borrowed Money of
 the debtor;                                                                                                                                                                                                                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
| |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | liability for any
 credit to the debtor from a supplier of goods or services or under any
 instalment purchase or payment plan or other similar arrangement;                                                                                    

4

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | contingent
 liabilities of the debtor (including without limitation any taxes or other
 payments under dispute) which have been or, under the Applicable Accounting
 Principles consistently applied, should be recorded in the notes to the
 Accounting Information;          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | deferred tax of
 the debtor; and                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | liability under a
 guarantee, indemnity or similar obligation entered into by the debtor in
 respect of a liability of another person who is not a member of the Group
 which would fall within (a) to (d) above if the references to the debtor
 referred to the other person;
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | Relevant
 Jurisdiction means any jurisdiction in which or where the
 Guarantor is incorporated, resident, domiciled, has a permanent
 establishment, carries on or has a place of business or is otherwise
 effectively connected; and                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | Rolling
 Four Quarter Period means, as of the last day of an Accounting
 Period or on any other day, the twelve-month period ending on such day.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.3   |  | Headings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | Clause headings
 and the table of contents are inserted for convenience of reference only and
 shall be ignored in the interpretation of this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4   |  | Construction
 of certain terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | In this Guarantee,
 unless the context otherwise requires:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.1 |  | references to
 clauses are to be construed as references to the clauses of this Guarantee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.2 |  | references to (or
 to any specified provision of) this Guarantee or any other document shall be
 construed as references to this Guarantee, that provision or that document as
 in force for the time being and as amended from time to time in accordance
 with the terms thereof, or, as the case may be, with the agreement of the
 relevant parties;                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.3 |  | words importing
 the plural shall include the singular and vice versa;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.4 |  | references to a
 time of day are to London time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.5 |  | references to a
 person shall be construed as including references to an individual, firm,
 company, corporation, unincorporated body of persons or any Government
 Entity;                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.6 |  | references to a guarantee
 include references to an indemnity or other assurance against financial loss
 including, without limitation, any obligation to purchase assets or services
 as a consequence of a default by any other person to pay any Indebtedness and
 guaranteed
 shall be construed accordingly; and                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|1.4.7 |  | references to any
 enactment shall be deemed to include reference to such enactment as re-enacted,
 amended or extended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|2     |  | Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|2.1   |  | Covenant
 to pay                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                
|      |  | In consideration
 of the Bank making or continuing loans or advances to, or otherwise giving
 credit or granting banking facilities or accommodation or granting time to,
 the Borrower pursuant to the Agreement and/or the Master Swap Agreement, the
 Guarantor hereby guarantees to pay to the Bank, on demand by the Bank all
 moneys and discharge all obligations and liabilities now or hereafter due,
 owing or incurred by the Borrower to the Bank under or pursuant to the
 Agreement, the Master Swap Agreement and the other Security Documents when
 the same become due for

5

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|      |  | payment or
 discharge whether by acceleration or otherwise, and whether such moneys,
 obligations or liabilities are express or implied, present, future or
 contingent, joint or several, incurred as principal or surety, originally
 owing to the Bank or purchased or otherwise acquired by it, denominated in
 Dollars or in any other currency, or incurred on any banking account or in
 any other manner whatsoever.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | Such liabilities
 shall, without limitation, include interest (as well after as before
 judgment) to date of payment at such rates and upon such terms as may from
 time to time be agreed, commission, fees and other charges and all legal and
 other costs, charges and expenses on a full and unqualified indemnity basis
 which may be incurred by the Bank in relation to any such moneys, obligations
 or liabilities or generally in respect of the Borrower, the Guarantor or any
 Collateral Instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.2   |  | Guarantor
 as principal debtor; indemnity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | As a separate and
 independent stipulation, the Guarantor agrees that if any purported
 obligation or liability of the Borrower which would have been the subject of
 this Guarantee had it been valid and enforceable is not or ceases to be valid
 or enforceable against the Borrower on any ground whatsoever whether or not
 known to the Bank (including, without limitation, any irregular exercise or
 absence of any corporate power or lack of authority of, or breach of duty by,
 any person purporting to act on behalf of the Borrower or any legal or other
 limitation, whether under the Limitation Acts or otherwise or any disability
 or Incapacity or any change in the constitution of the Borrower) the
 Guarantor shall nevertheless be liable to the Bank in respect of that
 purported obligation or liability as if the same were fully valid and
 enforceable and the Guarantor were the principal debtor in respect thereof.
 The Guarantor hereby agrees to keep the Bank fully indemnified on demand
 against all damages, losses, costs and expenses arising from any failure of
 the Borrower to perform or discharge any such purported obligation or
 liability.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.3   |  | Statements
 of account conclusive                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | Any statement of
 account, signed as correct by an officer of the Bank, showing the amount of
 the Guaranteed Liabilities shall, in the absence of manifest error, be
 binding and conclusive on and against the Guarantor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.4   |  | No
 security taken by Guarantor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | The Guarantor
 warrants that it has not taken or received, and undertakes that until all the
 Guaranteed Liabilities of the Borrower have been paid or discharged in full,
 it will not take or receive, the benefit of any security from the Borrowers
 or either of them or any other person in respect of its obligations under
 this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.5   |  | Interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | The Guarantor
 agrees to pay interest on each amount demanded of it under this Guarantee
 from the date of such demand until payment (as well after as before judgment)
 at the rate specified in clause 3.4 of the Agreement which shall apply to
 this Guarantee mutatis mutandis. Such interest shall be compounded at the end
 of each period determined for this purpose by the Bank in the event of it not
 being paid when demanded but without prejudice to the Banks right to require
 payment of such interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.6   |  | Continuing
 security and other matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|      |  | This Guarantee
 shall:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.6.1 |  | secure the
 ultimate balance from time to time owing to the Bank by the Borrower and
 shall be a continuing security, notwithstanding any settlement of account or
 other matter whatsoever;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|2.6.2 |  | be in addition to
 any present or future Collateral Instrument, right or remedy held by or
 available to the Bank; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

6

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|2.6.3 |  | not be in any way
 prejudiced or affected by the existence of any such Collateral Instrument,
 rights or remedies or by the same becoming wholly or in part void, voidable
 or unenforceable on any ground whatsoever or by the Bank dealing with, exchanging,
 varying or failing to perfect or enforce any of the same or giving time for
 payment or indulgence or compounding with any other person liable.                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.7   |  | Liability
 unconditional                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      |  | The liability of
 the Guarantor shall not be affected nor shall this Guarantee be discharged or
 reduced by reason of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.7.1 |  | the Incapacity or
 any change in the name, style or constitution of the Borrower or any other
 person liable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.7.2 |  | the Bank granting
 any time, indulgence or concession to, or compounding with, discharging,
 releasing or varying the liability of, the Borrower or any other person
 liable or renewing, determining, varying or increasing any accommodation,
 facility or transaction or otherwise dealing with the same in any manner
 whatsoever or concurring in, accepting or varying any compromise, arrangement
 or settlement or omitting to claim or enforce payment from the Borrower or
 any other person liable; or                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.7.3 |  | any act or
 omission which would not have discharged or affected the liability of the
 Guarantor had it been a principal debtor instead of a guarantor or by
 anything done or omitted which but for this provision might operate to
 exonerate the Guarantor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.8   |  | Collateral
 Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      |  | The Bank shall not
 be obliged to make any claim or demand on the Borrower or to resort to any
 Collateral Instrument or other means of payment now or hereafter held by or
 available to it before enforcing this Guarantee and no action taken or
 omitted by the Bank in connection with any such Collateral Instrument or
 other means of payment shall discharge, reduce, prejudice or affect the
 liability of the Guarantor under this Guarantee nor shall the Bank be obliged
 to apply any money or other property received or recovered in consequence of
 any enforcement or realisation of any such Collateral Instrument or other
 means of payment in reduction of the Guaranteed Liabilities.                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.9   |  | Waiver
 of Guarantors rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      |  | Until all the
 Guaranteed Liabilities have been paid, discharged or satisfied in full (and
 notwithstanding payment of a dividend in any liquidation or under any
 compromise or arrangement) the Guarantor agrees that, without the prior
 written consent of the Bank, it will not:                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.9.1 |  | exercise its
 rights of subrogation, reimbursement and indemnity against the Borrower or
 any other person liable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.9.2 |  | demand or accept
 repayment in whole or in part of any indebtedness now or hereafter due to the
 Guarantor from the Borrower or from any other person liable or demand or
 accept any Collateral Instrument in respect of the same or dispose of the
 same;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.9.3 |  | take any step to
 enforce any right against the Borrower or any other person liable in respect
 of any Guaranteed Liabilities; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.9.4 |  | claim any set-off
 or counterclaim against the Borrower or any other person liable or claim or
 prove in competition with the Bank in the liquidation of the Borrower or any
 other person liable or have the benefit of, or share in, any payment from or
 composition with, the Borrower or any other person liable or any other
 Collateral Instrument now or hereafter held by the Bank for any Guaranteed
 Liabilities or for the obligations or liabilities of any other person liable
 but so that, if so directed by the Bank, it will prove for the whole or any
 part of its claim in the liquidation of the Borrower or any other person
 liable on terms that the benefit of such proof and of all money received by
 it in respect

7

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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|     |  | thereof shall be
 held on trust for the Bank and applied in or towards discharge of the
 Guaranteed Liabilities in such manner as the Bank shall deem appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.10 |  | Suspense
 accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | Any money received
 in connection with this Guarantee (whether before or after any Incapacity of
 the Borrower or the Guarantor) may be placed to the credit of a suspense
 account with a view to preserving the rights of the Bank to prove for the
 whole of its claims against the Borrower or any other person liable or may be
 applied in or towards satisfaction of such of the Guaranteed Liabilities as
 the Bank may from time to time conclusively determine in its absolute
 discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.11 |  | Settlements
 conditional                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | Any release,
 discharge or settlement between the Guarantor and the Bank shall be
 conditional upon no security, disposition or payment to the Bank by the
 Borrower or any other person liable being void, set aside or ordered to be
 refunded pursuant to any enactment or law relating to bankruptcy,
 liquidation, administration or insolvency or for any other reason whatsoever
 and if such condition shall not be fulfilled the Bank shall be entitled to
 enforce this Guarantee subsequently as if such release, discharge or
 settlement had not occurred and any such payment had not been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.12 |  | Guarantor
 to deliver up certain property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | If, contrary to
 clauses 2.4 or 2.9 the Guarantor takes or receives the benefit of any
 security or receives or recovers any money or other property, such security,
 money or other property shall be held on trust for the Bank and shall be
 delivered to the Bank on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|2.13 |  | Retention
 of this Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | The Bank shall be
 entitled to retain this Guarantee after as well as before the payment or
 discharge of all the Guaranteed Liabilities for such period as the Bank may
 determine.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|3    |  | Payments
 and Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|3.1  |  | No
 set off or counterclaim                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | All payments to be
 made by the Guarantor under this Guarantee shall be made in full, without any
 set-off or counterclaim whatsoever and, subject as provided in clause 3.2,
 free and clear of any deductions or withholdings, in Dollars (except for
 charges or expenses which shall be paid in the currency in which they are
 incurred) on the due date to such account of the Bank as it may specify in
 writing to the Guarantor from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|3.2  |  | Grossing
 up for Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|     |  | If at any time the
 Guarantor is required to make any deduction or withholding in respect of
 Taxes from any payment due under this Guarantee for the account of the Bank,
 the sum due from the Guarantor in respect of such payment shall be increased
 to the extent necessary to ensure that, after the making of such deduction or
 withholding, the Bank receives on the due date for such payment (and retains,
 free from any liability in respect of such deduction or withholding) a net sum
 equal to the sum which it would have received had no such deduction or
 withholding been required to be made and the Guarantor shall indemnify the
 Bank against any losses or costs incurred by it by reason of any failure of
 the Guarantor to make any such deduction or withholding or by reason of any
 increased payment not being made on the due date for such payment. The
 Guarantor shall promptly deliver to the Bank any receipts, certificates or
 other proof evidencing the amounts (if any) paid or payable in respect of any
 deduction or withholding as aforesaid.

8

---



|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|3.3   |  | Currency
 indemnity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | If any sum due
 from the Guarantor under this Guarantee or any order or judgment given or
 made in relation hereto has to be converted from the currency (the first currency)
 in which the same is payable under this Guarantee or under such order or
 judgment into another currency (the second currency) for the purpose of (a)
 making or filing a claim or proof against the Guarantor, (b) obtaining an
 order or judgment in any court or other tribunal or (c) enforcing any order
 or judgment given or made in relation to this Guarantee, the Guarantor shall
 indemnify and hold harmless the Bank from and against any loss suffered as a
 result of any difference between (i) the rate of exchange used for such
 purpose to convert the sum in question from the first currency into the
 second currency and (ii) the rate or rates of exchange at which the Bank may
 in the ordinary course of business purchase the first currency with the
 second currency upon receipt of a sum paid to it in satisfaction, in whole or
 in part, of any such order, judgment, claim or proof. Any amount due from the
 Guarantor under this clause 3.3 shall be due as a separate debt and shall not
 be affected by judgment being obtained for any other sums due under or in
 respect of this Guarantee and the term rate of exchange includes any premium
 and costs of exchange payable in connection with the purchase of the first
 currency with the second currency.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4     |  | Representations
 and warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.1   |  | Continuing
 representations and warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | The Guarantor
 represents and warrants that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.1.1 |  | Due incorporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the Guarantor is
 duly incorporated and validly existing under the laws of the Marshall Islands
 as a Marshall Islands corporation and has power to carry on its business as
 it is now being conducted and to own its property and other assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.1.2 |  | Corporate power to
 guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the Guarantor has
 power to execute, deliver and perform its obligations under this Guarantee
 and under the other Security Documents to which it is or is to be a party;
 all necessary corporate, shareholder and other action has been taken to
 authorise the execution, delivery and performance of the same and no limitation
 on the powers of the Guarantor to borrow or give guarantees will be exceeded
 as a result of this Guarantee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.1.3 |  | Binding
 obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | this Guarantee and
 each of the other Security Documents to which it is or is to be a party
 constitutes valid and legally binding obligations of the Guarantor
 enforceable in accordance with its terms;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.1.4 |  | No conflict with
 other obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the execution and
 delivery of, the performance of its obligations under, and compliance with
 the provisions of, this Guarantee and each of the other Security Documents to
 which it is or is to be a party, by the Guarantor will not (i) contravene any
 existing applicable law, statute, rule or regulation or any judgment, decree
 or permit to which the Guarantor is subject, (ii) conflict with, or result in
 any breach of any of the terms of, or constitute a default under, any
 agreement or other instrument to which the Guarantor is a party or is subject
 or by which it or any of its property is bound, (iii) contravene or conflict
 with any provision of the Guarantors constitutional documents or (iv) result
 in the creation or imposition of or oblige the Guarantor to create any
 Encumbrance on any of the Guarantors undertakings, assets, rights or
 revenues;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

9

---



|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|4.1.5  |  | No litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | no litigation,
 arbitration or administrative proceeding is taking place, pending or, to the
 knowledge of the officers of the Guarantor, threatened against the Guarantor
 or any of its Subsidiaries which could have a material adverse effect on the
 business, assets or financial condition of the Guarantor;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.1.6  |  | No filings
 required                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | it is not
 necessary to ensure the legality, validity, enforceability or admissibility
 in evidence of this Guarantee or any of the other Security Documents to which
 the Guarantor is or is to be a party, that it or any other instrument be
 notarised, filed, recorded, registered or enrolled in any court, public
 office or elsewhere in any Relevant Jurisdiction or that any stamp,
 registration or similar tax or charge be paid in any Relevant Jurisdiction on
 or in relation to this Guarantee or any of the other Security Documents to
 which the Guarantor is or is to be a party and this Guarantee is in proper
 form for its enforcement in the courts of each Relevant Jurisdiction;                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.1.7  |  | Choice of law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | the choice by the
 Guarantor of English law to govern this Guarantee or any of the other
 Security Documents to which the Guarantor is or is to be a party and the
 submission by the Guarantor to the non-exclusive jurisdiction of the English
 courts are valid and binding;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.1.8  |  | No immunity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | neither the
 Guarantor nor any of its assets is entitled to immunity on the grounds of
 sovereignty or otherwise from any legal action or proceeding (which shall
 include, without limitation, suit, attachment prior to judgment, execution or
 other enforcement);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.1.9  |  | Consents obtained                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | every consent,
 authorisation, licence or approval of, or registration with or declaration
 to, governmental or public bodies or authorities or courts required by the
 Guarantor to authorise, or required by the Guarantor in connection with, the
 execution, delivery, validity, enforceability or admissibility in evidence of
 this Guarantee or any of the other Security Documents to which the Guarantor
 is or is to be a party, or the performance by the Guarantor of its
 obligations under this Guarantee or any of the other Security Documents to
 which the Guarantor is or is to be a party, has been obtained or made and is
 in full force and effect and there has been no default in the observance of
 the conditions or restrictions (if any) imposed in, or in connection with,
 any of the same; and
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.1.10 |  | No material
 adverse change                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | there has been no
 material adverse change in the financial position of the Guarantor or the
 consolidated financial position of the Group from that described by or on
 behalf of the Borrowers and/or the Guarantor to the Bank in the negotiation
 of this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.2    |  | Initial
 representations and warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | The Guarantor
 further represents and warrants that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|4.2.1  |  | Pari passu                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|       |  | the obligations of
 the Guarantor under this Guarantee are direct, general and unconditional
 obligations of the Guarantor and rank at least pari passu with all other
 present and future unsecured and unsubordinated Indebtedness of the Guarantor
 with the exception of any obligations which are mandatorily preferred by law
 and not by contract;                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

10

---



|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|4.2.2 |  | No default under
 other Indebtedness                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the Guarantor is
 not (nor would with the giving of notice or lapse of time or the satisfaction
 of any other condition or any combination thereof be) in breach of or in
 default under any agreement relating to Indebtedness to which it is a party
 or by which it may be bound;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.2.3 |  | Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the information,
 exhibits and reports furnished by the Guarantor to the Bank in connection or
 with the negotiation and preparation of this Guarantee are true and accurate
 in all material respects and not misleading, do not omit material facts and
 all reasonable enquiries have been made to verify the facts and statements
 contained therein; there are no other facts the omission of which would make
 any fact or statement therein misleading;                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.2.4 |  | No withholding Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | no Taxes are
 imposed by withholding or otherwise on any payment to be made by the
 Guarantor under this Guarantee or any of the other Security Documents to
 which the Guarantor is or is to be a party, or are imposed on or by virtue of
 the execution or delivery by the Guarantor of this Guarantee or any of the
 other Security Documents to which the Guarantor is or is to be a party or any
 document or instrument to be executed or delivered under this Guarantee or
 such Security Documents;                                                                                                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.2.5 |  | No Default                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | no Default has
 occurred and is continuing; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.2.6 |  | Shareholdings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | the Borrower is a
 wholly-owned direct Subsidiary of the Guarantor and as of the date of this
 Guarantee no less than 75% of all the issued share capital of the Guarantor
 are ultimately beneficially owned by the Hadjioannou Family.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.3   |  | Repetition
 of representations and warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|      |  | On and as of each
 day from the date of this Guarantee until all moneys due or owing, whether
 actually or contingently, under the Agreement and/or the other Security
 Documents (including this Guarantee) have been paid in full and while all or
 any part of the Commitment remains outstanding, the Guarantor shall:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.3.1 |  | be deemed to
 repeat the representations and warranties in clause 4.1 as if made with
 reference to the facts and circumstances existing on such day; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
|4.3.2 |  | be deemed to
 further represent and warrant to the Bank that the then latest audited
 financial statements delivered to the Bank under this Guarantee (if any) have
 been prepared in accordance with the Applicable Accounting Principles which
 have been consistently applied and present fairly and accurately the
 consolidated financial position of the Group as at the end of the financial
 period to which the same relate and the consolidated results of the
 operations of the Group for the financial period to which the same relate
 and, as at the end of such financial period, neither the Guarantor nor any
 other member of the Group had any significant liabilities (contingent or
 otherwise) or any unrealised or anticipated losses which are not disclosed
 by, or reserved against or provided for in, such financial statements.

11

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5     |  | Undertakings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1   |  | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | The Guarantor
 undertakes that, from the date of this Guarantee and so long as any moneys
 are owing, whether actually or contingently, under the Agreement or the other
 Security Documents (including this Guarantee) and while all or any part of
 the Commitment remains outstanding, it will:                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1.1 |  | Notice of default                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | promptly inform
 the Bank of any occurrence of which it becomes aware which might adversely
 affect its ability to perform its obligations under this Guarantee and each
 of the other Security Documents to which the Guarantor is or is to be a
 party, and of any Default forthwith upon becoming aware thereof and will from
 time to time, if so requested by the Bank, confirm to the Bank in writing
 that, save as otherwise stated in such confirmation, no Default has occurred
 and is continuing;                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1.2 |  | Consents and
 licences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | without prejudice
 to clause 4.1, obtain or cause to be obtained, maintain in full force and
 effect and comply in all material respects with the conditions and
 restrictions (if any) imposed in, or in connection with, every consent,
 authorisation, licence or approval of governmental or public bodies or
 authorities or courts and do, or cause to be done, all other acts and things
 which may from time to time be necessary or desirable under applicable law
 for the continued due performance of all its obligations under this
 Guarantee;
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1.3 |  | Pari passu                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | ensure that its
 obligations under this Guarantee shall, without prejudice to the provisions
 of clause 5.2, at all times rank at least pari passu with all its other
 present and future unsecured and unsubordinated Indebtedness with the
 exception of any obligations which are mandatorily preferred by law and not
 by contract;                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1.4 |  | Financial
 statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | prepare or cause
 to be prepared:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | audited
 consolidated financial statements of the Group in accordance with the
 Applicable Accounting Principles consistently applied in respect of each
 financial year;                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | unaudited
 consolidated financial statements of the Group in accordance with the
 Applicable Accounting Principles consistently applied in respect of each
 financial half-year; and                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | unaudited
 consolidated financial statements of the Group in accordance with the
 Applicable Accounting Principles consistently applied in respect of each
 financial quarter of each financial year,                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | and, in each case,
 deliver as many copies of the same as the Bank may reasonably require as soon
 as practicable but not later than one hundred and eighty (180) days (in the
 case of audited statements) and ninety (90) days (in the case of unaudited
 statements) after the end of the financial period to which they relate;                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|5.1.5 |  | Valuations and
 Compliance Certificate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                   
|      |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | deliver or cause
 to be delivered to the Bank valuations (dated not earlier than 30 days
 previously) of each Fleet Vessel prepared in accordance with, and in the
 manner specified in, clause 9.2.2 of the Agreement (at the cost of the
 Guarantor) at the time

12

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | when any annual or
 semi-annual consolidated financial statements of the Group are delivered to
 the Bank in accordance with clause 5.1.4 (and clause 9.2.2 of the Agreement
 shall apply mutatis mutandis hereto for the purpose of the valuation of Fleet
 Vessels); and                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | deliver to the
 Bank, a Compliance Certificate for the relevant period executed by the
 Guarantor and counter-signed by the Chief Financial Officer of the Guarantor
 and by the Borrower, at the time when any consolidated financial statements
 of the Group are delivered to the Bank in accordance with clause 5.1.4; and                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | no less than ten
 (10) days before the Guarantor intends to declare dividends, advise the Bank
 in writing of the proposed amount of such dividends and confirm to the Bank
 in writing, in a certificate duly signed by the Guarantor and the Borrower
 that no Event of Default has occurred or will occur as a result of the
 declaration or payment of such dividends;
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.1.6 |  | Delivery of
 reports                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | deliver to the
 Bank copies of every report, circular, notice or like document issued by the
 Guarantor to its shareholders or creditors generally subject to applicable
 obligations of confidentiality or rules of the New York Stock Exchange; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.1.7 |  | Provision of
 further information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | provide the Bank
 with such financial or other information concerning the Group, the Borrower,
 the Guarantor, the other Security Parties, the other members of the Group and
 their respective affairs as the Bank may from time to time reasonably
 require, including, without limitation, any management information,
 information relating to the position, trading and/or employment of the Ship
 and any actual or proposed purchase of vessels by any member of the Group,
 copies of all documents required of the Guarantor or its board of directors
 to disclose or certify or to file with the Securities and Exchange Commission
 of the U.S.A. or pursuant to the Sarbanes-Oxley Act of the U.S.A. and any
 other documents or information as may be reasonably required by the Bank.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.2   |  | Negative
 undertakings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | The Guarantor
 undertakes that, from the date of this Guarantee and so long as any moneys
 are owing under the Agreement or the other Security Documents (including this
 Guarantee) and while all or any part of the Commitment remains outstanding,
 it will not, without the prior written consent of the Bank:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.2.1 |  | Negative pledge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | permit any
 Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
 created or extended over all or any of the shares of the Borrower to secure
 or prefer any present or future Indebtedness of the Guarantor or any other
 person;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.2.2 |  | No merger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | merge or
 consolidate with any other person or enter into any demerger, amalgamation or
 any corporate reconstruction or redomiciliation of any kind;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|5.2.3 |  | Other business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                           
|      |  | undertake any
 business other than that conducted by it at the date of this Guarantee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

13

---



|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------
|5.2.4 |  | Distributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | declare or pay any
 dividends or make any other distributions to any of its shareholders if an
 Event of Default has occurred or will or, in the opinion of the Bank, is
 likely to occur as a result of, or following, the declaration or payment of
 such dividends or other distributions;                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.2.5 |  | Shareholdings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | change, cause or
 permit any change in, the legal and/or beneficial ownership of any of the
 shares in the Borrower which would result in the Borrower ceasing to be a
 wholly-owned direct Subsidiary of the Guarantor; or                                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.2.6 |  | Financial year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | change the
 computation of its financial year from that existing on the date of this
 Guarantee (i.e. with financial year-end on 31 December).                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3   |  | Financial
 undertakings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3.1 |  | The Guarantor
 undertakes with the Bank that, from the date of this Guarantee and so long as
 any moneys are owing under the Security Documents (including this Guarantee)
 and while all or any part of the Commitment remains outstanding, it will
 ensure that:                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Consolidated
 Adjusted Net Worth                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the Consolidated
 Adjusted Net Worth shall not be less than Two hundred million Dollars
 ($200,000,000) at any time;
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Consolidated
 Adjusted Leverage Ratio                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the Consolidated
 Adjusted Leverage Ratio shall not be higher than 0.70:1.0 at any time; and                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Consolidated Debt
 Service Ratio                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the Consolidated
 Debt Service Ratio shall not be higher than 5.5:1.0 at any time.                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3.2 |  | All the terms
 defined in clause 1.2 and used in this clause 5.3, and other accounting terms
 used in this clause 5.3, are to be determined by the Bank on a consolidated
 basis and (except as items are expressly included or excluded in the relevant
 definition or provision) are used and shall be construed in accordance with
 the Applicable Accounting Principles consistently applied and as determined
 from any relevant Accounting Information and any valuations of the Fleet
 Vessels and also by reference to any other information available to the Bank
 at any relevant time.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3.3 |  | Subject to clause
 5.3.4, the compliance of the Guarantor with the undertakings set out in
 clause 5.3.1 shall be determined and tested by the Bank in its sole
 discretion on the basis of calculations made by the Bank at the end of each
 Accounting Period at the time when the relevant Accounting Information and,
 where applicable, valuations of the Fleet Vessels have been delivered to the
 Bank pursuant to clause 5.1.4 and clause 5.1.5.                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3.4 |  | Notwithstanding
 the other terms of this clause 5.3 and, in particular, the time when
 compliance with the financial undertakings of clause 5.3.1 is to be tested by
 the Bank pursuant to clause 5.3.3, the Guarantor hereby undertakes that the
 financial undertakings of clause 5.3.1 will be complied with at all times
 during the whole term of each Accounting Period.                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                     
|5.3.5 |  | For the purposes
 of this clause 5.3: (i) no item shall be deducted or credited more than once
 in any calculation; and (ii) any amount expressed in a currency other than
 Dollars shall be converted into Dollars in accordance with the Applicable
 Accounting Principles consistently applied.                                                                                                                                                                                                                                                                                               

14

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|6   |  | Set-off                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | The Guarantor
 authorises the Bank at any time following a demand made by the Bank under
 clause 2.1 and without notice to the Guarantor to apply any credit balance to
 which the Guarantor is then entitled on any account of the Guarantor with the
 Bank at any of its branches in or towards satisfaction of any sum then due
 and payable from the Guarantor to the Bank under this Guarantee. For this
 purpose the Bank is authorised to purchase with the moneys standing to the
 credit of such account such other currencies as may be necessary to effect
 such application. The Bank shall not be obliged to exercise any right given
 to it by this clause 6. The Bank shall notify the Guarantor forthwith upon
 the exercise or purported exercise of any right of set-off giving full
 details in relation thereto.
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|7   |  | Benefit
 of this Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|7.1 |  | Benefit
 and burden                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | This Guarantee
 shall be binding upon the Guarantor and its successors in title and shall
 enure for the benefit of the Bank and its successors in title, Assignees
 and/or Transferees. The Guarantor expressly acknowledges and accepts the
 provisions of clause 16 of the Agreement and agrees that any person in favour
 of whom an assignment or a transfer is made in accordance with such clause
 shall be entitled to the benefit of this Guarantee.                                                                                                                                                                                                                                                                                                                                                                       
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|7.2 |  | Changes
 in constitution or reorganisation of Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | For the avoidance
 of doubt and without prejudice to the provisions of clause 7.1, this
 Guarantee shall remain binding on the Guarantor notwithstanding any change in
 the constitution of the Bank or its absorption in, or amalgamation with, or
 the acquisition of all or part of its undertaking or assets by, any other
 person, or any reconstruction or reorganisation of any kind, to the intent
 that this Guarantee shall remain valid and effective in all respects in
 favour of any successor in title, Assignee or Transferee of the Bank in the
 same manner as if such successor in title, Assignee or Transferee had been
 named in this Guarantee as a party instead of, or in addition to, the Bank.                                                                                                           
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|7.3 |  | No
 assignment by Guarantor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | The Guarantor may
 not assign or transfer any of its rights or obligations under this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|7.4 |  | Disclosure
 of information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | The Bank may, without
 the consent of the Guarantor, disclose to a prospective assignee or
 transferee or to any other person who may propose entering into contractual
 relations with the Bank in relation to the Agreement such information about
 the Guarantor as the Bank shall consider appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|8   |  | Notices
 and other matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|8.1 |  | Notices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|    |  | Clause 17.1 of the
 Agreement shall apply to this Guarantee as if set out herein and every
 notice, request, demand or other communication under this Guarantee shall be
 sent:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

15

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | 
|8.1.1 |  | if to the
 Guarantor at:                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | Karamanli Avenue                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |  | 166 05 Voula                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  | Greece                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | Fax No:                                                                                                                                                                                                                                                                                                                                                                                                                                                    | +30 210 8956900          
|      |  | Attention:                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Constantinos
 Adamopoulos
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.1.2 |  | if to the Bank at:                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | Bayerische Hypo-
 und Vereinsbank Aktiengesellschaft                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  | 7 Heraklitou
 Street                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  | 106 73 Athens                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |  | Greece                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | Fax:                                                                                                                                                                                                                                                                                                                                                                                                                                                       | +30 210 412 6597         
|      |  | Attention:                                                                                                                                                                                                                                                                                                                                                                                                                                                 | The Manager              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | or to such other
 address or facsimile number as is notified by the Guarantor or the Bank to
 the other party to this Guarantee.                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.2   |  | No
 implied waivers, remedies cumulative                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | No failure or
 delay on the part of the Bank to exercise any power, right or remedy under
 this Guarantee shall operate as a waiver thereof, nor shall any single or
 partial exercise by the Bank of any power, right or remedy preclude any other
 or further exercise thereof or the exercise of any other power, right or
 remedy. The remedies provided in this Guarantee are cumulative and are not
 exclusive of any remedies provided by law.     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.3   |  | English
 translations                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | All certificates,
 instruments and other documents to be delivered under or supplied in
 connection with this Guarantee shall be in the English language or shall be
 accompanied by a certified English translation upon which the Bank shall be
 entitled to rely.                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.4   |  | Other
 guarantors                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | The Guarantor
 agrees to be bound by this Guarantee notwithstanding that any other person
 intended to execute or to be bound by any other guarantee or assurance under
 or pursuant to the Agreement may not do so or may not be effectually bound
 and notwithstanding that such other guarantee or assurance may be determined
 or be or become invalid or unenforceable against any other person, whether or
 not the deficiency is known to the Bank.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.5   |  | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | The Guarantor
 agrees to reimburse the Bank on demand for all legal and other costs, charges
 and expenses on a full and unqualified indemnity basis which may be incurred
 by the Bank in relation to the enforcement of this Guarantee against the
 Guarantor.                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|8.6   |  | Partial
 invalidity                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           | 
|      |  | If, at any time,
 any provision of this Guarantee is or becomes illegal, invalid or
 unenforceable in any respect under any law or jurisdiction, neither the
 legality validity or enforceability of the remaining provisions nor the
 legality, validity or enforceability of such provision in any other respect
 or under the law of any other jurisdiction will be affected or impaired in
 any way.                                                  

16

---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|8.7 |  | Maximum
 liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|    |  | Anything contained
 in this Guarantee to the contrary notwithstanding, the obligations of the
 Guarantor hereunder shall be limited to a maximum aggregate amount equal to
 the greatest amount that would not render the Guarantors obligations
 hereunder subject to avoidance as a fraudulent transfer or conveyance under
 Section 548 of Title 11 of the United States Code or any similar provisions
 of applicable law (collectively, the Fraudulent Transfer Laws), in each case
 after giving effect to all other liabilities of the Guarantor, contingent or
 otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
 excluding, however, any liabilities of the Guarantor (a) in respect of
 inter-company Indebtedness to the Borrower or any other member of the Group
 to the extent that such Indebtedness would be discharged in an amount equal
 to the amount paid by the Guarantor hereunder and (b) under any guarantee of
 Indebtedness subordinated in right of payment to the Guaranteed Liabilities,
 which guarantee contains a limitation as to maximum amount similar to that
 set forth in this paragraph, pursuant to which the liability of the Guarantor
 hereunder is included in the liabilities taken into account in determining
 such maximum amount) and after giving effect as assets to the value (as
 determined under the applicable provisions of the Fraudulent Transfer Laws)
 of any rights to subrogation, contribution, reimbursement, indemnity or
 similar rights of the Guarantor pursuant to (i) applicable law or (ii) any
 agreement providing for an equitable allocation among the Guarantor and other
 members of the Group of obligations arising under guarantees by such parties.
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|9   |  | Law
 and jurisdiction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|9.1 |  | Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|    |  | This Guarantee is
 governed by, and shall be construed in accordance with, English law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|9.2 |  | Submission
 to jurisdiction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|    |  | The Guarantor
 agrees for the benefit of the Bank that any legal action or proceedings
 arising out of or in connection with this Guarantee against the Guarantor or
 any of its assets may be brought in the English courts, irrevocably and
 unconditionally submits to the jurisdiction of such courts and irrevocably
 designates, appoints and empowers Mr. Savvas Savvides at present of 24 Exeter
 Road, London N14 5JY, England to receive for it and on its behalf, service of
 process issued out of the English courts in any such legal action or
 proceedings and the Guarantor further undertakes that, in the event that such
 individual passes away or cannot be found, the Guarantor hereby irrevocably
 and unconditionally authorises the Bank to designate, appoint and empower, on
 the Guarantors behalf, Messrs Cheeswrights or Messrs Saville & Co. at
 their then principal place of business in London, as substitute process
 agents of Mr. Savvas Savvides for the purposes of this clause. The submission
 to such jurisdiction shall not (and shall not be construed so as to) limit
 the right of the Bank to take proceedings against the Guarantor in the courts
 of any other competent jurisdiction, nor shall the taking of proceedings in
 any one or more jurisdictions preclude the taking of proceedings in any other
 jurisdiction, whether concurrently or not. The Guarantor further agrees that
 only the courts of England and not those of any other State shall have
 jurisdiction to determine any claim which the Guarantor may have against the
 Bank arising out of or in connection with this Guarantee.                                                                                                        
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|9.3 |  | Contracts
 (Rights of Third Parties) Act 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|    |  | No term of this
 Guarantee is enforceable under the Contracts (Rights of Third Parties) Act
 1999 by a person who is not a party to this Guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|    |  | IN WITNESSwhereof the parties to this
 Guarantee have caused this Guarantee to be duly executed as a deed on the
 date first above written.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

17

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Schedule 1

Form of Compliance Certificate

|      |                                                     
|----- | ----------------------------------------------------
|To:   | BAYERISCHE HYPO-
 UND VEREINSBANK AKTIENGESELLSCHAFT
|      |                                                     
|From: | SAFE BULKERS, INC.                                  

Dated: [●]

US$40,167,615.01 Loan
Agreement dated 7 March 2007, as amended (the Loan Agreement) - Corporate
Guarantee dated [●] 2008 (the Corporate Guarantee)

Terms defined in the Corporate Guarantee shall have the same meaning
when used herein.

We refer to clause 5.3.1 of the Corporate Guarantee and hereby certify
that, as at [insert date of accounts] and on the date hereof:

|  |                                                                                                                                                                                                     |                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------
|1 | Financial covenants                                                                                                                                                                                
|  |                                                                                                                                                                                                     |                                                                                     
|  | (a)                                                                                                                                                                                                 | the Consolidated
 Adjusted Net Worth is $[●], calculated as follows: [ ]; and       
|  |                                                                                                                                                                                                     |                                                                                     
|  | (b)                                                                                                                                                                                                 | the Consolidated
 Adjusted Leverage Ratio is [●]:1.0, calculated as follows:[ ]; and
|  |                                                                                                                                                                                                     |                                                                                     
|  | (c)                                                                                                                                                                                                 | the Consolidated
 Debt Service Ratio is [●]:1.0, calculated as follows: [ ].        
|  |                                                                                                                                                                                                     |                                                                                     
|  | [and we hereby
 confirm that the above comply with the provisions of clause 5.3.1 of the
 Guarantee.]                                                                                              
|  |                                                                                                                                                                                                     |                                                                                     
|2 | Default                                                                                                                                                                                            
|  |                                                                                                                                                                                                     |                                                                                     
|  | [No Default has
 occurred and is continuing]                                                                                                                                                       
|  |                                                                                                                                                                                                     |                                                                                     
|  | or                                                                                                                                                                                                 
|  |                                                                                                                                                                                                     |                                                                                     
|  | [The following
 Default has occurred and is continuing: [provide details of Default]. [The following steps are
 being taken to remedy it [provide details of steps being taken to remedy Default]].

|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|Signed: |                                                                                           
|        |                                                                                           
|        | [Director[s]/Officer[s]]
 [or any other duly authorised representatives [or appropriate]] 
|        | For and on behalf
 of:                                                                    
|        | SAFE BULKERS, INC.                                                                        
|        |                                                                                           
|Signed: |                                                                                           
|        |                                                                                           
|        | [Director[s]/Officer[s]]
 [or any other duly authorised representatives [for appropriate]]
|        | For and on behalf
 of:                                                                    
|        | PEMER SHIPPING LTD                                                                        

18

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I hereby confirm and certify that the above statements are correct and
complete.

|        |                         
|------- | ------------------------
|Signed: |                         
|        |                         
|        | Chief Financial
 Officer
|        | For and on behalf
 of   
|        | SAFE BULKERS, INC.      

19

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|                      |   |                 
|--------------------- | - | ----------------
|EXECUTEDas aDEED      | ) |                 
|by                    | ) |                 
|for and on behalf
 of | ) |                 
|SAFE BULKERS, INC.    | ) | Attorney-in-Fact
|in the presence
 of:  | ) |                 

|                               |                        | 
|------------------------------ | ---------------------- | 
|                               | (NORTON ROSE LLP SEAL)
|Witness                       
|Name: LEILA SLIM              
|Address:                      
|Occupation:
 Trainee Solicitor

|                                               |   |                      
|---------------------------------------------- | - | ---------------------
|EXECUTEDas a DEED                              | ) |                      
|by Vassilis
 Mantzavinos and Pericles Lykoudis | ) | Authorised
 signatory
|for and on behalf
 of                          | ) |                      
|BAYERISCHE HYPO- UND VEREINSBANK               | ) |                      
|AKTIENGESELLSCHAFT                             | ) |                      
|in the presence
 of:                           | ) | Authorised
 signatory
|                                               |   |                      
|                                               |   |                      
|Witness                                        |   |                      
|Name: LEILA SLIM                               |   |                      
|Address:                                       |   |                      
|Occupation: Trainee
 Solicitor                 |   |                      
|                                               |   |                      
|(NORTON ROSE LLP SEAL)                         |   |                      

20

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