----

| 1  | Definitions and Interpretation     | 1  |
|----|------------------------------------|----|
| 2  | The Loan and its Purpose           | 11 |
| 3  | Conditions of Utilisation          | 11 |
| 4  | Advance                            | 12 |
| 5  | Repayment                          | 12 |
| 6  | Prepayment                         | 13 |
| 7  | Interest                           | 14 |
| 8  | Indemnities                        | 16 |
| 9  | Fees                               | 20 |
| 10 | Security and Application of Moneys | 21 |
| 11 | Representations                    | 24 |
| 12 | Undertakings and Covenants         | 26 |
| 13 | Events of Default                  | 43 |
| 14 | Assignment and Sub-Participation   | 49 |
| 15 | Set-Off                            | 49 |
| 16 | Payments                           | 50 |
| 17 | Notices                            | 51 |
| 18 | Partial Invalidity                 | 53 |
| 19 | Remedies and Waivers               | 53 |
| 20 | Miscellaneous                      | 53 |
| 21 | Law and Jurisdiction               | 54 |

| SCHEDULE 1: Conditions Precedent and Subsequent | 57 |
|-------------------------------------------------|----|
| Part I: Conditions precedent                    | 57 |
| Part II: Conditions subsequent                  | 62 |
| SCHEDULE 2: Calculation of Mandatory Cost       | 63 |
| SCHEDULE 3: Form of Drawdown Notice             | 65 |
| SCHEDULE 4: Form of Compliance Certificate      | 66 |

----

| LOAN AGREEMENT |
|----------------|

| Dated: 8 October 2009 |   |
|-----------------------|--------|

| (1) | BIKINI SHIPPING COMPANY INC., a company incorporated under the laws of the Republic of the Marshall Islands, whose registered office is at The Trust Company of the Marshall Islands, Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the "Borrower"); and |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | DEUTSCHE BANK AKTIENGESELLSCHAFT FILIALE DEUTSCHLANDGESCHÄFT, acting as lender through its office at Ludwig-Erhard-Str. 1, 20459 Hamburg, Germany (in that capacity the "Lender") and in its capacity as swap provider, acting under the name DEUTSCHE BANK AKTIENGESELLSCHAFT, acting through its office at Theodor-Heuss-Allee-70, 60486 Frankfurt-am-Main, Federal Republic of Germany (herein sometimes referred to as the "Swap Provider"). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  WHEREAS: |
|----------------|

| (A) | The Borrower has agreed to purchase the Vessel from the Builder on the terms of the Building Contract and intends to register the Vessel on delivery under the flag of the Marshall Islands, or any other flag acceptable to the Lender. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | The Lender has agreed to advance to the Borrower an amount not exceeding the lesser of (a) $40,000,000 and (b) 80% of the Fair Market Value to be determined shortly prior to the Drawdown Date, to assist the Borrower to finance or, as the case may be, refinance part of the Contract Price of the Vessel. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1   | Definitions and Interpretation |
|---------------|--------------------------------|

|   | "Administration" has the meaning given to it in paragraph 1.1.3 of the ISM Code. |
|--------|---------------------------------------------------------------------------------------|

|   | "Annex VI" means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | "Event of Default" means any of the events or circumstances set out in Clause 13.1 (Events of Default). |
|--------|---------------------------------------------------------------------------------------------------------|

----

|   | (g) | any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account); |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | (if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Lender by prime banks acceptable to the Lender in the London interbank market, |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | (a) | an actual, constructive, arranged, agreed or compromised total loss of the Vessel; or |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (b) | the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire); or |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the capture, seizure, arrest, detention, confiscation, hijacking, theft or condemnation of the Vessel by any government or by persons acting or purporting to act on behalf of any government or otherwise, unless the Vessel is released and returned to the possession of the Borrower within sixty (60) days after the capture, seizure, arrest, detention, confiscation, hijacking, theft or condemnation in question. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 1.2.1 | words denoting the plural number include the singular and vice versa; |
|--------|-------|-----------------------------------------------------------------------|

|   | 1.2.2 | words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2.3 | references to Recitals, Clauses and Schedules are references to recitals, clauses and schedules to or of this Agreement; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------|

|   | 1.2.4 | references to this Agreement include the Recitals and the Schedules; |
|--------|-------|----------------------------------------------------------------------|

|   | 1.2.5 | the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2.6 | references to any document (including, without limitation, to all or any of the Relevant Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2.7 | references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2.8 | references to the Lender include its successors, transferees and assignees; |
|--------|-------|-----------------------------------------------------------------------------|

|   | 1.2.9 | a time of day (unless otherwise specified) is a reference to London time; and |
|--------|-------|-------------------------------------------------------------------------------|

----

|   | 1.2.10 | words and expressions defined in the Master Agreement, unless the context otherwise requires, have the same meaning. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

| 2   | The Loan and its Purpose |
|---------------|--------------------------|

|   | 2.1 | Amount   Subject to the terms of this Agreement, the Lender agrees to make available to the Borrower a term loan in an aggregate amount not exceeding the Maximum Loan Amount. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.2 | Purpose   The Borrower shall apply the Loan for the purpose referred to in Recital (B). |
|--------|-----|--------------------------------------------------------------------------------------------------------|

|   | 2.3 | Monitoring   The Lender shall not be bound to monitor or verify the application of any amount borrowed under this Agreement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| 3   | Conditions of Utilisation |
|---------------|---------------------------|

|   | 3.1 | Conditions precedent   The Borrower is not entitled to have the Loan advanced unless the Lender has received all of the documents and other evidence listed in Part I of Schedule 1 (Conditions precedent). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Further conditions precedent   The Lender will only be obliged to advance the Loan if on the date of the Drawdown Notice and on the proposed Drawdown Date: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2.1 | no Default is continuing or would result from the advance of the Loan; and |
|--------|-------|----------------------------------------------------------------------------|

|   | 3.2.2 | the representations made by the Borrower under Clause 11 (Representations) are true in all material respects. |
|--------|-------|---------------------------------------------------------------------------------------------------------------|

|   | 3.3 | Conditions subsequent   The Borrower undertakes to deliver or to cause to be delivered to the Lender on, or as soon as practicable after, the Drawdown Date the additional documents and other evidence listed in Part II of Schedule 1 (Conditions subsequent). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.4 | No waiver   If the Lender in its sole discretion agrees to advance all or any part of the Loan to the Borrower before all of the documents and evidence required by Clause 3.1 (Conditions precedent) have been delivered to or to the order of the Lender, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Lender no later than thirty (30) days after the Drawdown Date or such other date specified by the Lender. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.5 | Form and content   All documents and evidence delivered to the Lender under this Clause 3 shall: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | 3.5.2 | if required by the Lender, be certified, notarised, legalised or attested in a manner acceptable to the Lender. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------|

| 4   | Advance |
|---------------|---------|

|   | The Borrower may request the Loan to be advanced in one amount on any Business Day prior to the Availability Termination Date by delivering to the Lender a duly completed Drawdown Notice not more than ten (10) and not fewer than three (3) Business Days before the proposed Drawdown Date. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5   | Repayment |
|---------------|-----------|

|   | 5.1 | Repayment of Loan   The Borrower agrees to repay the Loan to the Lender by twenty (20) consecutive quarterly instalments, the first nineteen (19) such instalments each in the sum of six hundred thousand Dollars ($600,000) and the twentieth and final such instalment in the sum of twenty eight million six hundred thousand Dollars ($28,600,000), the first instalment falling due on the date which is three calendar months after the Drawdown Date and subsequent instalments falling due at consecutive intervals of three calendar months thereafter and with the last instalment, together with any other amounts then outstanding under the Indebtedness, falling due on the Final Maturity Date. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 5.2 | Reduction of Repayment Instalments   If the aggregate amount advanced to the Borrower is less than $40,000,000, the amount of the Repayment Instalments shall be reduced pro rata. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.3 | Reborrowing   The Borrower may not reborrow any part of the Loan which is repaid or prepaid. |
|--------|-----|-------------------------------------------------------------------------------------------------------------|

| 6   | Prepayment |
|---------------|------------|

|   | 6.1 | Illegality   If it becomes unlawful in any jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain the Loan: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.1.1 | the Lender shall promptly notify the Borrower of that event; and |
|--------|-------|------------------------------------------------------------------|

|   | 6.1.2 | the Borrower shall repay the Loan (to the extent already advanced) on the last day of the current Interest Period or, if earlier, the date specified by the Lender in the notice delivered to the Borrower (being no earlier than the last day of any applicable grace period permitted by law). |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2 | Voluntary prepayment of Loan   The Borrower may prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the Loan by a minimum amount of $1,000,000 or any integral multiple thereof) subject as follows: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.1 | it gives the Lender not less than five (5) Business Days' (or such shorter period as the Lender may agree) prior notice; and |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.2 | any prepayment under this Clause 6.2 shall satisfy the obligations under Clause 5.1 (Repayment of Loan) pro rata. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------|

|   | 6.3 | Mandatory prepayment on sale or Total Loss If the Vessel is sold by the Borrower or becomes a Total Loss, the Borrower shall, simultaneously with any such sale and transfer of title to the prospective buyer or within one hundred and twenty (120) days after any such Total Loss, prepay the whole of the Indebtedness and any part of the Loan not drawn down shall be cancelled. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.4 | Restrictions   Any notice of prepayment given under this Clause 6 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment is to be made and the amount of that prepayment. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7   | Interest |
|---------------|----------|

|   | 7.1 | Interest Periods   The period during which the Loan shall be outstanding under this Agreement shall be divided into consecutive Interest Periods of three (3) or six (6) months' duration, as selected by the Borrower by written notice to the Lender not later than 11.00 a.m. on the third Business Day before the beginning of the Interest Period in question, or such other duration as may be agreed by the Lender. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.2 | Beginning and end of Interest Periods   Each Interest Period shall start on the Drawdown Date or (if the Loan is already made) on the last day of the preceding Interest Period and end on the date which numerically corresponds to the Drawdown Date or the last day of the preceding Interest Period in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month and no Interest Period may exceed the Final Maturity Date. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.3 | Interest Periods to meet Repayment Dates   If an Interest Period will expire after the next Repayment Date, there shall be a separate Interest Period for a part of the Loan equal to the Repayment Instalment due on that next Repayment Date and that separate Interest Period shall expire on that next Repayment Date. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.4 | Non-Business Days   If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.5 | Interest rate   During each Interest Period interest shall accrue on the Loan at the rate determined by the Lender to be the aggregate of (a) the Margin, (b) LIBOR and (c) the Mandatory Cost, if any. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.6 | Failure to select Interest Period   If the Borrower at any time fails to select or agree an Interest Period in accordance with Clause 7.1 (Interest Periods), the interest rate applicable shall be the rate determined by the Lender in accordance with Clause 7.5 (Interest rate) for an Interest Period of three months or such other period as the Lender may select. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 7.7 | Accrual and payment of interest   Interest shall accrue from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed (or, in any circumstance where market practice differs, in accordance with the prevailing market practice) and shall be paid by the Borrower to the Lender on the last day of each Interest Period and, if the Interest Period is longer than three months, on the dates falling at three monthly intervals after the first day of that Interest Period. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.8 | Default interest   If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent (2%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount for successive Interest Periods, each selected by the Lender (acting reasonably).  Any interest accruing under this Clause 7.8 shall be immediately payable by the Borrower on demand by the Lender. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.9 | Alternative interest rate   If either (a) the applicable Screen Rate is not available for any Interest Period and no rates are quoted to the Lender to determine LIBOR for that Interest Period or (b) the Lender determines that the cost to it of obtaining matching deposits for any Interest Period would be in excess of LIBOR and that determination is made no later than close of business in London on the day LIBOR is determined for that Interest Period: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.9.1 | the Lender shall give notice to the Borrower of the occurrence of such event; and |
|--------|-------|-----------------------------------------------------------------------------------|

|   | 7.9.2 | the rate of interest on the Loan for that Interest Period shall be the rate per annum which is the sum of: |
|--------|-------|------------------------------------------------------------------------------------------------------------|

|   | (a) | the Margin; and |
|--------|-----|-----------------|

|   | (b) | the rate which expresses as a percentage rate per annum the cost to the Lender of funding the Loan from whatever source it may reasonably select; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (c) | the Mandatory Cost, if any, |
|--------|-----|-----------------------------|

|   | 7.9.3 | the Lender will negotiate with the Borrower in good faith with a view to modifying this Agreement to provide a substitute basis for determining the rate of interest; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.9.4 | any substitute basis agreed pursuant to Clause 7.9.3 shall be binding on the parties to this Agreement; and |
|--------|-------|-------------------------------------------------------------------------------------------------------------|

|   | 7.9.5 | if, within thirty (30) days of the giving of the notice referred to in Clause 7.9.1, the Borrower and the Lender fail to agree in writing on a substitute basis for determining the rate of interest, the Borrower will immediately prepay the Loan, together with any Break Costs. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.10 | Determinations conclusive   The Lender shall promptly notify the Borrower of the determination of a rate of interest under this Clause 7 and each such determination shall (save in the case of manifest error) be final and conclusive. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8   | Indemnities |
|---------------|-------------|

|   | 8.1 | Transaction expenses   The Borrower will, within fourteen (14) days of the Lender's written demand, pay the Lender the amount of all costs and expenses (including legal fees and Value Added Tax or any similar or replacement tax if applicable) incurred by the Lender in connection with: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.1 | the negotiation, preparation, printing, execution and registration of the Finance Documents (whether or not any Finance Document is actually executed or registered and whether or not all or any part of the Loan is advanced); |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.2 | any amendment, addendum or supplement to any Finance Document (whether or not completed) (except from those pursuant to Clause 14); and |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.3 | any other document which may at any time be required by the Lender to give effect to any Finance Document or which the Lender is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of the Vessel). |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8.2 | Funding costs   The Borrower shall indemnify the Lender on the Lender's written demand against all losses and costs incurred or sustained by the Lender if, for any reason, the Loan is not advanced to the Borrower after the relevant Drawdown Notice has been given to the Lender, or is advanced on a date other than that requested in the Drawdown Notice (unless, in either case, as a result of any default by the Lender). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3 | Break Costs   The Borrower shall indemnify the Lender on the Lender's written demand against all costs, losses, premiums or penalties incurred by the Lender as a result of its receiving any prepayment of all or any part of the Loan (whether pursuant to Clause 6 (Prepayment) or otherwise) on a day other than the last day of an Interest Period for the Loan or relevant part of the Loan, or any other payment under or in relation to the Finance Documents on a day other than the due date for payment of the sum in question, including (without limitation) any losses or costs incurred in liquidating or re-employing deposits from third parties acquired to effect or maintain all or any part of the Loan, and any liabilities, expenses or losses incurred by the Lender in terminating or reversing, or otherwise in connection with, any Transaction or any other interest rate and/or currency swap, transaction or arrangement entered into by the Lender to hedge any exposure arising under this Agreement, or in terminating or reversing, or otherwise in connection with, any open position arising under this Agreement or the Master Agreement. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.4 | Currency indemnity   In the event of the Lender receiving or recovering any amount payable under a Finance Document in a currency other than the Currency of Account, and if the amount received or recovered is insufficient when converted into the Currency of Account at the date of receipt to satisfy in full the amount due, the Borrower shall, on the Lender's written demand, pay to the Lender such further amount in the Currency of Account as is sufficient to satisfy in full the amount due and that further amount shall be due to the Lender as a separate debt under this Agreement. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.5 | Increased costs (subject to Clause 8.6 (Exceptions to increased costs))   If, by reason of the introduction of any law, or any change in any law, or any change in the interpretation or administration of any law, or compliance with any request or requirement from any central bank or any fiscal, monetary or other authority occurring after the date of this Agreement (including the implementation or application of or compliance with the Basel II Accord or any other Basel II Regulation (whether such implementation, application or compliance is by any central bank or any fiscal, monetary or other authority, the Lender or the holding company of the Lender)): |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8.5.1 | the Lender (or the holding company of the Lender) shall be subject to any Tax with respect to payment of all or any part of the Indebtedness (other than Tax on overall net income); or |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.5.2 | the basis of Taxation of payments to the Lender in respect of all or any part of the Indebtedness shall be changed; or |
|--------|-------|------------------------------------------------------------------------------------------------------------------------|

|   | 8.5.3 | any reserve requirements shall be imposed, modified or deemed applicable against assets held by or deposits in or for the account of or loans by any branch of the Lender; or |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.5.4 | the manner in which the Lender allocates capital resources to its obligations under this Agreement and/or the Master Agreement or any ratio (whether cash, capital adequacy, liquidity or otherwise) which the Lender is required or requested to maintain shall be affected; or |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.5.5 | there is imposed on the Lender (or on the holding company of the Lender) any other condition in relation to the Indebtedness or the Finance Documents; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

8.6

----

|   | 8.6 | Exceptions to increased costs   Clause 8.5 (Increased costs) does not apply to the extent any additional cost or reduced return referred to in that Clause is: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.6.1 | compensated for by a payment made under Clause 8.10 (Taxes); or |
|--------|-------|-----------------------------------------------------------------|

|   | 8.6.2 | compensated for by a payment made under Clause 16.3 (Grossing-up); or |
|--------|-------|-----------------------------------------------------------------------|

|   | 8.6.3 | compensated for by the payment of the Mandatory Cost; or |
|--------|-------|----------------------------------------------------------|

|   | 8.6.4 | attributable to the wilful breach by the Lender (or the holding company of the Lender) of any law or regulation. |
|--------|-------|------------------------------------------------------------------------------------------------------------------|

|   | 8.7 | Events of Default   The Borrower shall indemnify the Lender from time to time on the Lender's written demand against all losses, costs and liabilities incurred or sustained by the Lender as a consequence of any Event of Default. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.8 | Enforcement costs   The Borrower shall pay to the Lender on the Lender's written demand the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document including (without limitation) any losses, costs and expenses which the Lender may from time to time sustain, incur or become liable for by reason of the Lender being mortgagee of the Vessel and/or a lender to the Borrower, or by reason of the Lender being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the Vessel. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8.9 | Other costs   The Borrower shall pay to the Lender on the Lender's written demand the amount of all sums which the Lender may pay or become actually or contingently liable for on account of the Borrower in connection with the Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which the Lender may pay or guarantees which it may give in respect of the Insurances, any expenses incurred by the Lender in connection with the maintenance or repair of the Vessel or in discharging any lien, bond or other claim relating in any way to the Vessel, and any sums which the Lender may pay or guarantees which it may give to procure the release of the Vessel from arrest or detention. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10 | Taxes   The Borrower shall pay all Taxes to which all or any part of the Indebtedness or any Finance Document may be at any time subject (other than Tax on the Lender's overall net income) and shall indemnify the Lender on the Lender's written demand against all liabilities, costs, claims and expenses resulting from any omission to pay or delay in paying any such Taxes. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11 | Cancellation The Borrower may cancel the Loan and prepay to the Lender the full amount of the Indebtedness, if the Lender makes a claim under Clauses 8.5 or 8.10. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9   | Fees |
|---------------|------|

|   | 9.1 | Commitment fee   The Borrower shall pay to the Lender a fee computed at the rate of zero point fifty per cent (0.50%) per annum on the undrawn amount of the Loan from time to time from the date of this Agreement until the earlier of the Drawdown Date and the Availability Termination Date or the date on which the Borrower cancels the whole of the undrawn amount of the Loan by giving to the Lender relevant notice in writing to that effect.  The accrued commitment fee is payable in arrears on the last day of each successive period of three months from the date of this Agreement and on the earlier of the Drawdown Date and the Availability Termination Date. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 9.2 | Arrangement fee   The Borrower shall pay to the Lender an arrangement fee in the amount of three hundred thousand Dollars ($300,000) on the date of this Agreement. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10   | Security and Application of Moneys |
|----------------|------------------------------------|

|   | 10.1 | Security Documents   As security for the payment of the Indebtedness, the Borrower shall execute and deliver to the Lender and/or the Swap Provider or cause to be executed and delivered to the Lender and/or the Swap Provider the following documents in such forms and containing such terms and conditions as the Lender and/or the Swap Provider shall require: |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1.1 | a first preferred mortgage over the Vessel; |
|--------|--------|---------------------------------------------|

|   | 10.1.2 | a first priority deed or deeds of assignment of the Insurances, Earnings and Requisition Compensation of the Vessel; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | 10.1.3 | a guarantee and indemnity from the Guarantor; and |
|--------|--------|---------------------------------------------------|

|   | 10.1.4 | a first priority deed of charge over the Master Agreement Benefits. |
|--------|--------|---------------------------------------------------------------------|

|   | 10.2 | Earnings Account  The Borrower shall maintain the Earnings Account with the Lender for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Earnings   The Borrower shall procure that all Earnings and any Requisition Compensation are credited to the Earnings Account. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Application of Earnings Account   The Borrower shall procure that there is transferred from the Earnings Account to the Lender: |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4.1 | on each Repayment Date, the amount of the Repayment Instalment then due; and |
|--------|--------|------------------------------------------------------------------------------|

|   | 10.4.2 | on each Interest Payment Date, the amount of interest then due, |
|--------|--------|-----------------------------------------------------------------|

|   | 10.5 | Borrower's obligations not affected   If for any reason the amount standing to the credit of the Earnings Account is insufficient to pay any Repayment Instalment or to make any payment of interest when due, the Borrower's obligation to pay that Repayment Instalment or to make that payment of interest shall not be affected. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 10.6 | Release of surplus   Any amount remaining to the credit of the Earnings Account following the application of the Earnings Account required by Clause 10.4 (Application of Earnings Account) shall (unless a Default shall have occurred and be continuing) be released to or to the order of the Borrower. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Relocation of Earnings Account   At any time following the occurrence and during the continuation of a Default, the Lender may without the consent of the Borrower relocate the Earnings Account to any other branch of the Lender, without prejudice to the continued application of this Clause 10 and the rights of the Lender under the Finance Documents. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8 | Application after acceleration   From and after the giving of notice to the Borrower by the Lender under Clause 13.2 (Acceleration), the Borrower shall procure that all sums from time to time standing to the credit of the Earnings Account are immediately transferred to the Lender for application in accordance with Clause 10.9 (General application of moneys) and the Borrower irrevocably authorises the Lender to make those transfers. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | General application of moneys   The Borrower, subject to Clause 10.10 (Application of moneys on sale or Total Loss), irrevocably authorises the Lender to apply all sums which the Lender may receive: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9.1 | pursuant to a sale or other disposition of the Vessel or any right, title or interest in the Vessel; or |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | 10.9.2 | by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | 10.9.3 | by way of transfer of any sum from the Earning Account; or |
|--------|--------|------------------------------------------------------------|

|   | 10.9.4 | otherwise arising under or in connection with any Security Document, |
|--------|--------|----------------------------------------------------------------------|

----

|   | 10.10 | Application of moneys on sale or Total Loss The Borrower irrevocably authorises the Lender to apply all sums which the Lender may receive pursuant to a sale by the Borrower or a Total Loss in or towards satisfaction of the prepayment due and payable under Clause 6.3 (Mandatory prepayment on sale or Total Loss) by virtue of that sale or Total Loss, but the Borrower's obligation to make that prepayment shall not be affected if those sums are insufficient to satisfy that obligation. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11 | Additional security   If at any time the aggregate of the Fair Market Value of the Vessel and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Lender (in the case of other charged assets), and determined by the Lender in its discretion (in all other cases)) for the time being provided to the Lender under this Clause 10.11 is less than one hundred and twenty five per cent (125%) of the aggregate of the amount of the Loan then outstanding and the amount certified by the Lender to be the amount which would be payable by the Borrower to the Lender under the Master Agreement if an Early Termination Date were to occur at that time, the Borrower shall, within thirty (30) days of the Lender's request, at the Borrower's option: |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11.1 | pay to the Lender or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Lender and the Swap Provider as additional security for the payment of the Indebtedness; or |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11.2 | give to the Lender other additional security in amount and form acceptable to the Lender in its discretion; or |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | 10.11.3 | prepay the Loan in the amount of the shortfall. |
|--------|---------|-------------------------------------------------|

|   | 10.12 | Cost of valuations  For the purposes of Clause 10.12, the cost of one set of valuations per annum shall be borne by the Borrower, unless there is an Event of Default which is continuing, in which case the cost of all valuations obtained from time to time upon the request of the Lender shall be borne by the Borrower. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 11   | Representations |
|----------------|-----------------|

|   | 11.1 | Representations   The Borrower makes the representations and warranties set out in this Clause 11.1 to the Lender on the date of this Agreement. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.1 | Status   Each Security Party (which is not an individual) is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation and has the power to own its assets and carry on its business as it is being conducted. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.2 | Binding obligations   The obligations expressed to be assumed by each Security Party in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.3 | Non-conflict with other obligations   The entry into and performance by each Security Party of, and the transactions contemplated by, the Finance Documents do not conflict with: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | any law or regulation applicable to that Security Party; |
|--------|-----|----------------------------------------------------------|

|   | (b) | the constitutional documents of that Security Party; or |
|--------|-----|---------------------------------------------------------|

|   | (c) | any document binding on that Security Party or any of its assets, |
|--------|-----|-------------------------------------------------------------------|

|   | and in borrowing the Loan, the Borrower is acting for its own account. |
|--------|------------------------------------------------------------------------|

|   | 11.1.4 | Power and authority   Each Security Party has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.5 | Validity and admissibility in evidence   All consents, licences, approvals, authorisations, filings and registrations required or desirable: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | to enable each Security Party lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party or to enable the Lender to enforce and exercise all its rights under the Finance Documents; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | to make the Finance Documents to which any Security Party is a party admissible in evidence in its jurisdiction of incorporation, |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.6 | Governing law and enforcement   The choice of English law as the governing law of any Finance Document expressed to be governed by English law will be recognised and enforced in the jurisdiction of incorporation of each relevant Security Party, and any judgment obtained in England in relation to any such Finance Document will be recognised and enforced in the jurisdiction of incorporation of each relevant Security Party. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.7 | Deduction of Tax   No Security Party is required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.8 | No filing or stamp taxes   Under the law of jurisdiction of incorporation of each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.9 | No default   No Event of Default is continuing or might reasonably be expected to result from the advance of the Loan. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.10 | No misleading information   Any factual information provided by any Security Party to the Lender was true and accurate in all material respects as at the date it was provided. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.11 | Pari passu ranking   The payment obligations of each Security Party under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 11.1.12 | No proceedings pending or threatened   No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency have been started or (to the best of the Borrower's knowledge threatened) which, if adversely determined, might reasonably be expected to have a materially adverse effect on the business, assets, financial condition or credit worthiness of any Security Party. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.13 | Disclosure of material facts   The Borrower is not aware of any material facts or circumstances which have not been disclosed to the Lender and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrower. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.14 | No established place of business in the UK or US   No Security Party has an established place of business in the United Kingdom or the United States of America. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.1.15 | Completeness of Relevant Documents   The copies of any Relevant Documents provided or to be provided by the Borrower to the Lender in accordance with Clause 3 (Conditions of Utilisation) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Lender. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 11.2 | Repetition   Each representation and warranty in Clause 11.1 (Representations) is deemed to be repeated by the Borrower by reference to the facts and circumstances then existing on the date of the Drawdown Notice and the first day of each Interest Period. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12   | Undertakings and Covenants |
|----------------|----------------------------|

----

|   | 12.1.1 | Financial statements   The Borrower shall procure that the Guarantor shall supply to the Lender as soon as the same become available, but in any event within 120 days after the end of each of its financial years, the Guarantor's annual audited consolidated financial statements for that financial year, together with a Compliance Certificate, signed by two directors of the Guarantor, setting out (in reasonable detail) computations as to compliance with Clause 12.2 (Financial covenants) as at the date as at which those financial statements were drawn up. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.1.2 | Requirements as to financial statements   Each set of financial statements delivered by the Borrower or the Guarantor under Clause 12.1.1 (Financial statements): |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | shall be certified by a director of the Guarantor as fairly representing its financial condition as at the date as at which those financial statements were drawn up; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, the Borrower notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and the Guarantor's auditors deliver to the Lender: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to make an accurate comparison between the financial position indicated in those financial statements and that indicated in the Original Financial Statements. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.1.3 | Interim financial statements   The Borrower shall procure that the Guarantor shall supply to the Lender as soon as the same become available, but in any event within 90 days after the end of each quarter during each of its financial years, the Guarantor's unaudited quarterly consolidated financial statements for that quarter. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.1.4 | Information: miscellaneous   The Borrower shall supply to the Lender: |
|--------|--------|--------------------------------------------------------------------------------------|

|   | (a) | all documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which might, if adversely determined, have a materially adverse effect on the business, assets, financial condition or credit worthiness of that Security Party; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | promptly, such further information regarding the financial condition, business and operations of any Security Party as the Lender may reasonably request including, without limitation, cash flow analyses and details of the operating costs of the Vessel. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.1.5 | Notification of default |
|--------|--------|-------------------------|

|   | (a) | The Borrower shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Promptly upon a request by the Lender, the Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | any change in the status of the Borrower after the date of this Agreement; or |
|--------|-----|-------------------------------------------------------------------------------|

|   | (c) | a proposed assignment or transfer by the Lender of any of its rights and obligations under this Agreement, |
|--------|-----|------------------------------------------------------------------------------------------------------------|

|   | 12.2 | Financial covenants |
|--------|------|---------------------|

|   | 12.2.1 | The Borrower shall maintain from the Drawdown Date throughout the Facility Period minimum Cash of not less than $400,000. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.2 | The Borrower shall procure that the Guarantor shall maintain the following financial ratios on a consolidated basis throughout the Facility Period: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Adjusted Net Worth shall not be less than $150,000,000; |
|--------|-----|---------------------------------------------------------|

|   | (b) | Adjusted Net Worth shall exceed 25% of the Total Assets; |
|--------|-----|----------------------------------------------------------|

|   | (c) | Average Cash Balance shall not be less than $10,000,000. |
|--------|-----|----------------------------------------------------------|

|   | 12.2.3 | In the event that after the date of this Agreement, the Guarantor enters into any financial agreement in which it agrees to any further financial covenants or any different covenant ratios in relation to those contained in Clause 12.2.2, the Lender reserves the right to demand that these financial covenants shall become part of this Agreement. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | "Accounting Information" means the quarterly consolidated financial statements and/or the annual consolidated financial statements to be provided by the Guarantor to the Lender in accordance with Clauses 12.1.1 and 12.1.3. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Accounting Period" means each consecutive period of approximately three months falling during the Facility Period (ending on the last day in March, June, September and December of each year) for which quarterly Accounting Information is required to be delivered pursuant to Clause 12.1.3. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Adjusted Net Worth" means, in respect of an Accounting Period, the amount of Total Assets less Consolidated Debt. |
|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | "Average Cash Balance" means the aggregate amount of Cash on each day during the immediately preceding 12 months period divided by the same number of days. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Cash" means cash in hand which is not subject to any charge back or other Encumbrance and to which the Borrower or the Guarantor (as the context requires) has free, immediate and direct access. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Consolidated Debt" means, in respect of an Accounting Period, the aggregate amount of Debt owing by members of the Group (other than any such Debt owing by any member of the Group to another member of the Group) as stated in the then most recent Accounting Information. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Current Assets" means, in respect of each Accounting Period, the aggregate of the cash and marketable securities, trade and other receivables from persons other than a member of the Group realisable within one year, inventories and prepaid expenses which are to be charged to income within one year less any doubtful debts and any discounts or allowances given as stated in the then most recent Accounting Information. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Debt" means the aggregate  (as of the date of calculation) of all obligations of the Group then outstanding for the payment or repayment of money as stated in the Accounting Information then most recently required to be delivered pursuant to Clause 12.1.1 or 12.1.3 including, without limitation: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (a) | any amounts payable by the Group under leases or similar arrangements over their respective periods; |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | (b) | any credit to the Group from a supplier of goods or under any instalment purchase or other similar arrangement; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | (c) | the aggregate amount then outstanding of liabilities and obligations of third parties to the extent that they are guaranteed by the Group; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | any contingent liabilities (including any taxes or other payments under dispute or arbitration) which have been or, under GAAP, should be recorded in the notes to the Group's financial statements; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | any deferred tax liabilities. |
|--------|-----|-------------------------------|

|   | "Fleet Vessels" means any vessel directly or indirectly owned by members of the Group. |
|--------|----------------------------------------------------------------------------------------|

|   | "Tangible Fixed Assets" means, in respect of an Accounting Period, the value (less depreciation computed in accordance with GAAP) on a consolidated basis of all the assets of the Group which would, in accordance with GAAP, be classified as tangible fixed assets, namely items held for ongoing use to the business of the Group including, without limitation, any land, plant, machinery and vessels as such value is stated in the then most recent Accounting Information Provided that, for the purposes of determining compliance with the covenants set forth in Clause 12.2.2, the value of such tangible fixed assets attributable to the Fleet Vessels shall be equal to the aggregate Fair Market Value of such Fleet Vessels rather than the value of such Fleet Vessels as stated in the then most recent Accounting Information. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | "Total Assets" means, in respect of an Accounting Period, the aggregate of Current Assets and Tangible Fixed Assets. |
|--------|----------------------------------------------------------------------------------------------------------------------|

|   | 12.2.4 | General undertakings |
|--------|--------|----------------------|

|   | 12.2.5 | Authorisations   The Borrower shall promptly: |
|--------|--------|--------------------------------------------------------------|

----

|   | (a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and |
|--------|-----|--------------------------------------------------------------------------------------------|

|   | (b) | supply certified copies to the Lender of, |
|--------|-----|-------------------------------------------|

|   | 12.2.6 | Compliance with laws   The Borrower shall comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.7 | Conduct of business   The Borrower shall carry on and conduct its business in a proper and efficient manner, file all requisite tax returns and pay all tax which becomes due and payable (except where contested in good faith). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.8 | Evidence of good standing   The Borrower will from time to time if requested by the Lender provide the Lender with evidence in form and substance satisfactory to the Lender that the Security Parties (other than the Guarantor for as long as it remains listed) and all corporate shareholders of any Security Party remain in good standing. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.9 | Negative pledge and no disposals   The Borrower shall not without the prior written consent of the Lender create nor permit to subsist any Encumbrance or other third party rights over any of its present or future assets or undertaking nor dispose of any of those assets or of all or part of that undertaking. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.10 | Merger   The Borrower shall not enter into any amalgamation, demerger, merger or any form of corporate reconstruction, reorganisation or consolidation. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.2.11 | Change of business   The Borrower shall not make any substantial change to the general nature of its business from that carried on at the date of this Agreement. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.12 | No other business   The Borrower shall not engage in any business other than the ownership, operation, chartering and management of the Vessel. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.13 | No place of business in UK or US   The Borrower shall not have an established place of business in the United Kingdom or the United States of America at any time during the Facility Period. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.14 | No borrowings   The Borrower shall not borrow any money (except for the Loan and unsecured Financial Indebtedness subordinated to the Loan) nor incur any obligations under leases. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.15 | No substantial liabilities   Except in the ordinary course of business and/or as may be required for the operation of the Vessel, the Borrower shall not incur any liability to any third party which is in the Lender's opinion of a substantial nature. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.16 | No loans or other financial commitments   The Borrower shall not (a) make any loan nor enter into any guarantee or indemnity or otherwise voluntarily assume any actual or contingent liability in respect of any obligation of any other person nor provide any other form of credit or financial assistance to (i) a person who is directly or indirectly interested in the Borrower's share or loan capital, or (ii) any company in or with which such a person is directly or indirectly interested or connected, or (b) enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arm's length on normal commercial terms. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.17 | No dividends   The Borrower shall not pay any dividends or make any other distributions or effect any form of redemption, purchase or return of share capital which would result in a breach of the financial covenants set out in Clause 12.2 or if an Event of Default has occurred and is continuing, unremedied and unwaived. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.2.18 | Inspection of records   The Borrower will permit the inspection of its financial records and accounts from time to time by the Lender or its nominee. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.19 | No change in Relevant Documents   The Borrower shall procure that, without the prior written consent of the Lender such consent not to be unreasonably withheld or unduly delayed, there shall be no termination of, alteration to any (in the Lender's opinion) material term of, or waiver of any (in the Lender's opinion) material term of, any of the Relevant Documents which are not Finance Documents. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.20 | No dealings with Master Agreement   The Borrower shall not assign, novate or encumber or in any other way transfer any of its rights or obligations under the Master Agreement. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.21 | No change in capital The Borrower shall not reduce its issued share capital or issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital other than pursuant to an IPO. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.22 | No securities The Borrower shall not acquire any shares or other securities other than US or UK Treasury bills, certificates of deposit issued by major North American or European banks and shares in newly established companies, or enter into any transaction in a derivative other than under the Master Agreement. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.23 | Directors The Borrower shall not without the prior written consent of the Lender, permit a majority of the seats (other than vacant seats) on the board of directors of the Borrower to be held by persons other than persons who are either (a) nominated by the Borrower's then current board of directors or (b) appointed by persons as so nominated in accordance with (a) above. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.24 | Shareholders The Borrower shall procure that Diana Shipping Inc. of the Marshall Islands remains 100% shareholder of the Borrower. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2.25 | Subordination  The Borrower shall subordinate in priority of payment to the Indebtedness any loans made to it by its shareholders or affiliated companies of the Borrower or the Guarantor and any other present or future indebtedness of the Borrower. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.2.26 | No sharing agreement The Borrower shall not without the prior written consent of the Lender enter into any agreement or arrangement for sharing or pooling its Earnings. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3 | Vessel undertakings |
|--------|------|---------------------|

|   | 12.3.1 | No sale of Vessel   The Borrower shall not sell or otherwise dispose of the Vessel or any shares in the Vessel nor agree to do so without the prior written consent of the Lender. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.2 | No chartering after Event of Default   Following the occurrence and during the continuation of an Event of Default the Borrower shall not without the prior written consent of the Lender let the Vessel on charter or renew or extend any charter or other contract of employment of the Vessel (nor agree to do so). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.3 | No change in management   The Borrower shall procure that, without the prior written consent of the Lender, there shall be no termination of, alteration to any (in the Lender's opinion) material term, or waiver of any (in the Lender's opinion) material term of, the Management Agreement and the Borrower shall not without the prior written consent of the Lender permit the Managers to sub-contract or delegate the commercial or technical management of the Vessel to any third party. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.4 | Registration of Vessel   The Borrower undertakes to maintain the registration of the Vessel under the flag stated in Recital (A) for the duration of the Facility Period unless the Lender agrees otherwise in writing. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.5 | Evidence of current COFR   The Borrower will, if and for so long as the Vessel trades in the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990), obtain and retain a valid Certificate of Financial Responsibility for the Vessel under that Act, and will comply strictly with the requirements of that Act. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.6 | ISM Code compliance   The Borrower will: |
|--------|--------|---------------------------------------------------------|

----

|   | (a) | procure that the Vessel remains for the duration of the Facility Period subject to a SMS; |
|--------|-----|-------------------------------------------------------------------------------------------|

|   | (b) | maintain a valid and current SMC for the Vessel throughout the Facility Period; |
|--------|-----|---------------------------------------------------------------------------------|

|   | (c) | procure that the ISM Company maintains a valid and current DOC throughout the Facility Period; and |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (d) | immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of the Vessel or of the DOC of the ISM Company. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.7 | ISPS Code compliance   The Borrower will: |
|--------|--------|----------------------------------------------------------|

|   | (a) | for the duration of the Facility Period comply with the ISPS Code in relation to the Vessel and procure that the Vessel and the ISPS Company comply with the ISPS Code; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | maintain a valid and current ISSC for the Vessel throughout the Facility Period; and |
|--------|-----|--------------------------------------------------------------------------------------|

|   | (c) | immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.8 | Annex VI compliance   The Borrower will for the duration of the Facility Period comply with Annex VI in relation to the Vessel and procure that the Vessel's master and crew are familiar with, and that the Vessel complies with, Annex VI. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.9 | No bareboat charter The Borrower shall not without the prior written consent of the Lender let the Vessel on any bareboat charter. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.10 | Physical inspection The Lender shall be entitled to physically inspect the Vessel, and the Borrower shall bear the cost of such inspection not more than once every calendar year, provided that the Vessel is found to be in satisfactory condition, according to the reasonable opinion of the Lender. If the Vessel is not found to be in satisfactory condition, according to the reasonable opinion of the Lender, or there is an Event of Default which is continuing, then the Borrower shall bear the cost of all inspections of the Vessel at any time. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.3.11 | International laws  The Borrower shall at all times comply with all national and international applicable laws and conventions  relating to it or to the Vessel, including without limitation the International Convention for the Safety of Life at Sea 1974 (SOLAS) and the International Convention for the Prevention of Pollution from Ships 1973, as modified by the Protocol of 1978 relating thereto and as further amended (MARPOL), and shall procure that there are on board the Vessel valid certificates showing compliance therewith. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.12 | Class  The Vessel shall be classed to the highest notation with a classification society acceptable to the Lender without any overdue recommendations and/or qualifications and/or requirements and the Borrower shall not without the prior written consent of the Lender change the class of the Vessel. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3.13 | Trading The Borrower undertakes to use the Vessel only for civil merchant trading, for the duration of the Facility Period and for as long as any part of the Indebtedness remains outstanding. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4 | Insurances |
|--------|------|------------|

|   | 12.4.1 | the Vessel remains insured against marine risks and war risks on an agreed value basis for an amount which is the greater from time to time of (a) her full market value and (b) an amount which equals one hundred and twenty per cent (120%) of the amount of the Loan then outstanding; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.2 | the Vessel remains entered in a protection and indemnity association in both protection and indemnity classes, or remains otherwise insured against protection and indemnity risks and liabilities (including, without limitation, protection and indemnity war risks); and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.4.3 | the Vessel remains insured against oil pollution caused by the Vessel for such amounts as the Lender may from time to time approve unless that risk is covered to the satisfaction of the Lender by the Vessel's protection and indemnity entry or insurance. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.4 | The Lender agrees that, if and for so long as the Vessel may be laid up with the approval of the Lender, the Borrower may at its own expense take out port risk insurance on the Vessel in place of hull and machinery insurance. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.5 | The Borrower undertakes to place the Obligatory Insurances in such markets, in such currency, on such terms and conditions, and with such brokers, underwriters and associations as the Lender shall have previously approved in writing.  The Borrower shall not alter the terms of any of the Obligatory Insurances without the prior written consent of the Lender, and will supply the Lender from time to time on request with such information as the Lender may in its discretion require with regard to the Obligatory Insurances and the brokers, underwriters or associations through or with which the Obligatory Insurances are placed.  The Borrower shall reimburse the Lender on demand for all costs and expenses incurred by the Lender in obtaining from time to time a report on the adequacy of the Obligatory Insurances from an insurance adviser instructed by the Lender. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.6 | The Borrower undertakes duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Obligatory Insurances, and, at its own expense, to arrange and provide any guarantees from time to time required by any protection and indemnity or war risks association.  From time to time at the Lender's request, the Borrower will provide the Lender with evidence satisfactory to the Lender that such premiums, calls, contributions and other sums have been duly and punctually paid; that any such guarantees have been duly given; and that all declarations and notices required by the terms of any of the Obligatory Insurances to be made or given by or on behalf of the Borrower to brokers, underwriters or associations have been duly and punctually made or given. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.7 | The Borrower will comply in all respects with all terms and conditions of the Obligatory Insurances and will make all such declarations to brokers, underwriters and associations as may be required to enable the Vessel to operate in accordance with the terms and conditions of the Obligatory Insurances.  The Borrower will not do, nor permit to be done, any act, nor make, nor permit to be made, any omission, as a result of which any of the Obligatory Insurances may become liable to be suspended, cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Obligatory Insurances may be reduced or become liable to be repaid or rescinded in whole or in part.  In particular, but without limitation, the Borrower will not permit the Vessel to be employed other than in conformity with the Obligatory Insurances without first taking out additional insurance cover in respect of that employment in all respects to the satisfaction of the Lender, and the Borrower will promptly notify the Lender of any new requirement imposed by any broker, underwriter or association in relation to any of the Obligatory Insurances. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.4.8 | The Borrower will, no later than fourteen days (or, in the case of war risks, no later than seven days), before the expiry of any of the Obligatory Insurances renew them and shall immediately give the Lender such details of those renewals as the Lender may require. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.9 | The Lender shall be at liberty to take out Mortgagees Insurances in relation to the Vessel for such amounts (but not more than 110% of the Loan) and on such terms and conditions as the Lender may from time to time decide, and the Borrower shall from time to time on demand reimburse the Lender for all costs, premiums and expenses paid or incurred by the Borrower in connection with any Mortgagees Insurances. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.10 | The Borrower shall deliver to the Lender certified copies (and, if required by the Lender, the originals) of all policies, certificates of entry and other documents relating to the Insurances (including, without limitation, receipts for premiums, calls or contributions) and shall procure that letters of undertaking in such form as the Lender may approve shall be issued to the Lender by the brokers through which the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers). If the Vessel is at any time during the Facility Period insured under any form of fleet cover, the Borrower shall procure that those letters of undertaking contain confirmation that the brokers, underwriters or association (as the case may be) will not set off claims relating to the Vessel against premiums, calls or contributions in respect of any other vessel or other insurance, and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance.  Failing receipt of those confirmations, the Borrower will instruct the brokers, underwriters or association concerned to issue a separate policy or certificate for the Vessel in the sole name of the Borrower or of the Borrower's brokers as agents for the Borrower. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.4.11 | The Borrower shall promptly provide the Lender with full information regarding any casualty or other accident or damage to the Vessel exceeding the Threshold Amount. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.12 | The Borrower agrees that, at any time after the occurrence and during the continuation of an Event of Default, the Lender shall be entitled to collect, sue for, recover and give a good discharge for all claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to arbitration or any other form of judicial or non-judicial determination; and otherwise to deal with such claims in such manner as the Lender shall in its discretion think fit. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.13 | Whether or not an Event of Default shall have occurred or be continuing, the proceeds of any claim under any of the Insurances in respect of a Total Loss shall be paid to the Lender and applied by the Lender in accordance with Clause 10.1. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.14 | The Borrower agrees that, at any time after the occurrence and during the continuation of an Event of Default, the Lender shall be entitled to require payment to itself,  if the Borrower shall fail to reach agreement with any of the brokers, underwriters or associations with regard to any claim in respect of any of the Insurances (other than in respect of a Total Loss), or the restoration of the Vessel, according to good commercial maintenance practice, or for payment to third parties, within such time as the Lender may stipulate. In addition, in the event of any dispute arising between the Borrower and any broker, underwriter or association with respect to any obligation to make any payment to the Borrower or to the Lender under or in connection with any of the Insurances, or with respect to the amount of any such payment, the Lender shall be entitled to settle that dispute directly with the broker, underwriter or association concerned.  Any such settlement shall be binding on the Borrower. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.4.15 | The Lender agrees that any amounts which may become due under any protection and indemnity entry or insurance shall be paid to the Borrower to reimburse the Borrower for, and in discharge of, the loss, damage or expense in respect of which they shall have become due, unless, at the time the amount in question becomes due, an Event of Default shall have occurred and be continuing, in which event the Lender shall be entitled to receive the amounts in question and to apply them either in reduction of the Indebtedness or, at the option of the Lender, to the discharge of the liability in respect of which they were paid. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.16 | The Borrower shall not settle, compromise or abandon any claim under or in connection with any of the Insurances (other than a claim of less than the Threshold Amount arising other than from a Total Loss) without the prior written consent of the Lender. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.17 | If the Borrower fails to effect or keep in force the Obligatory Insurances, the Lender may (but shall not be obliged to) effect and/or keep in force such insurances on the Vessel and such entries in protection and indemnity or war risks associations as the Lender in its discretion considers desirable, and the Lender may (but shall not be obliged to) pay any unpaid premiums, calls or contributions.  The Borrower will reimburse the Lender from time to time on demand for all such premiums, calls or contributions paid by the Lender, together with interest at the default rate from the date of payment by the Lender until the date of reimbursement. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.4.18 | The Borrower shall comply strictly with the requirements of any legislation relating to pollution or protection of the environment which may from time to time be applicable to the Vessel in any jurisdiction in which the Vessel shall trade and in particular (if the Vessel is to trade in the United States of America and Exclusive Economic Zone (as defined in the Act)) the Borrower shall comply strictly with the requirements of the United States Oil Pollution Act 1990 (the "Act").  Before any such trade is commenced and during the entire period during which such trade is carried on, the Borrower shall: |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (a) | pay any additional premiums required to maintain protection and indemnity cover for oil pollution up to the limit available to the Borrower for the Vessel in the market; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | make all such quarterly or other voyage declarations as may from time to time be required by the Vessel's protection and indemnity association in order to maintain such cover; and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | submit the Vessel to such additional periodic, classification, structural or other surveys which may be required by the Vessel's protection and indemnity insurers to maintain cover for such trade and at the Lender's request deliver to the Lender copies of reports made in respect of such surveys; and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | implement any recommendations contained in the reports issued following the surveys referred to in Clause 12.4.18(c) within the relevant time limits, and provide evidence satisfactory to the Lender that the protection and indemnity insurers are satisfied that this has been done; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone): |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

|   |  (aa) | obtain and retain a certificate of financial responsibility under the Act in form and substance satisfactory to the United States Coast Guard; and |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (bb) | procure that the protection and indemnity insurances do not contain a US Trading Exclusion Clause or any other analogous provision; and |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

|   |  (cc) | comply strictly with any operational or structural regulations issued from time to time by any relevant authorities under the Act so that at all times the Vessel falls within the provisions which limit strict liability under the Act for oil pollution. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13   | Events of Default |
|----------------|-------------------|

|   | 13.1 | Events of Default   Each of the events or circumstances set out in this Clause 13.1 is an Event of Default. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.1 | Non-payment   The Borrower does not pay on the due date any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | its failure to pay is caused by manifest administrative or technical error; and |
|--------|-----|---------------------------------------------------------------------------------|

|   | 13.1.2 | Other obligations   A Security Party or any other person (except the Lender) does not comply with any provision of any of the Relevant Documents (other than the Building Contract) to which that Security Party or person is a party (other than as referred to in Clause 13.1.1 (Non-payment)). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.3 | Misrepresentation   Any representation, warranty or statement made or deemed to be repeated by a Security Party in any Finance Document or any other document delivered by or on behalf of a Security Party under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be repeated. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 13.1.4 | Cross default   Any Financial Indebtedness of the Borrower in excess of an aggregate amount of $500,000 or any Financial Indebtedness of any other Security Party or the Group in excess of an aggregate amount of $10,000,000: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | is not paid when due or within any originally applicable grace period; or |
|--------|-----|---------------------------------------------------------------------------|

|   | (b) | is declared to be, or otherwise becomes, due and payable before its specified maturity as a result of an event of default (however described); or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | is capable of being declared by a creditor to be due and payable before its specified maturity as a result of such an event. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.5 | Insolvency |
|--------|--------|------------|

|   | (a) | A Security Party or a member of the Group is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its Financial Indebtedness. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | The value of the assets of a Security Party or the Group on a consolidated basis is less than its liabilities (taking into account contingent and prospective liabilities). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | A moratorium is declared in respect of any Financial Indebtedness of a Security Party or a member of the Group. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | 13.1.6 | Insolvency proceedings   Any corporate action, legal proceedings or other procedure or step is taken for: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | (a) | the suspension of payments, a moratorium of any Financial Indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of a Security Party or a member of the Group; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | a composition, compromise, assignment or arrangement with any creditor of a Security Party or a member of the Group; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------|

|   | (c) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of any Security Party or a member of the Group or any of its (in the Lender's opinion) material assets; or |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | enforcement of any Encumbrance over any material (in the Lender's opinion) assets of a Security Party or a member of the Group, |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

|   | or any analogous procedure or step is taken in any jurisdiction. |
|--------|------------------------------------------------------------------|

|   | 13.1.7 | Creditors' process   Any expropriation, attachment, sequestration, distress or execution affects any (in the Lender's opinion) material asset or (in the Lender's opinion) material assets of a Security Party. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.8 | Change in ownership or control of the Borrower   There is any change in the beneficial ownership or control of the Borrower from that advised to the Lender by the Borrower at the date of this Agreement. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.9 | Repudiation   A Security Party or any other person (except the Lender or the Builder) repudiates any of the Relevant Documents (other than the Building Contract) to which that Security Party or person is a party or evidences an intention to do so. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | No Event of Default under this Clause 13.1.9 will occur if the repudiation is in relation to the Charter and such repudiation is outside the control of the Borrower and if capable of remedy is remedied within seven (7) Business Days of the Lender giving notice to the Borrower or the Borrower becoming aware of such repudiation. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.10 | Impossibility or illegality   Any event occurs which would, or would with the passage of time, render performance of any of the Relevant Documents by a Security Party or any other party to any such document impossible, unlawful or unenforceable by the Lender or a Security Party. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 13.1.11 | Conditions subsequent   Any of the conditions referred to in Clause 3.3 (Conditions subsequent) is not satisfied within the time reasonably required by the Lender. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.12 | Revocation or modification of authorisation   Any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable a Security Party or any other person (except the Lender) to comply with any of its obligations under any of the Relevant Documents is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender considers is, or may be, prejudicial to the interests of the Lender, or ceases to remain in full force and effect. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | No Event of Default under this Clause 13.1.12 will occur if the revocation or modification of authorisation is in relation to the Charter and/or the Management Agreement and such revocation or modification of authorisation is outside the control of the Borrower and if capable of remedy is remedied within seven (7) Business Days of the Lender giving notice to the Borrower or the Borrower becoming aware of such revocation or modification of authorisation. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.13 | Curtailment of business   A Security Party ceases, or threatens to cease, to carry on all or a substantial part of its business or, as a result of intervention by or under the authority of any government, the business of a Security Party is wholly or partially curtailed or suspended, or all or a substantial part of the assets or undertaking of a Security Party is seized, nationalised, expropriated or compulsorily acquired. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 13.1.14 | Reduction of capital   A Security Party reduces its authorised or issued or subscribed capital. |
|--------|---------|-----------------------------------------------------------------------------------------------------------|

|   | 13.1.15 | Loss of Vessel   The Vessel suffers a Total Loss or is otherwise destroyed, abandoned, confiscated, forfeited or condemned as prize, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Lender as security for the payment of all or any part of the Indebtedness, except that a Total Loss, or event similar to a Total Loss in relation to any other vessel, shall not be an Event of Default if: |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | the Vessel or other vessel is insured in accordance with the Security Documents; and |
|--------|-----|--------------------------------------------------------------------------------------|

|   | (b) | no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Lender in its discretion that any such refusal or dispute is likely to occur; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | payment of all insurance proceeds in respect of the Total Loss is made in full to the Lender within one hundred and twenty (120) days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Lender may in its discretion agree. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.16 | Challenge to registration   The registration of the Vessel or the Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of the Mortgage is contested. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.17 | War   The country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion considers that, as a result, the security conferred by the Security Documents is materially prejudiced. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.18 | Master Agreement termination   A notice is given by the Swap Provider under section 6(a) of the Master Agreement, or by any person under section 6(b)(iv) of the Master Agreement, in either case designating an Early Termination Date for the purpose of the Master Agreement, or the Master Agreement is for any other reason terminated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 13.1.19 | Notice of termination   The Guarantor gives notice to the Lender to determine its obligations under the Guarantee. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.20 | Material adverse change   Any event or series of events occurs which, in the reasonable opinion of the Lender, is likely to have a materially adverse effect on the business, assets, financial condition or credit worthiness of a Security Party or a member of the Group. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.21 | Default under the Charter  Any event or circumstance occurs which in the opinion of the Lender constitutes a material default under the Charter, including without limitation a material amendment to the Charter. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.22 | Invalidity At any time, any (in the Lender's opinion) material provision of a Relevant Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.1.23 | Shareholding Without the Lender's consent, any one person (or associated (in the sole opinion of the Lender) persons) - other than members of the Palios and Margaronis family and one or more underwriters temporarily holding shares of the Guarantor pursuant to an offering of such shares - acquires more than 20% of the Guarantor's issued share capital at any one time. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.2 | Acceleration   If an Event of Default is continuing the Lender may by notice to the Borrower: |
|--------|------|--------------------------------------------------------------------------------------------------------------|

|   | 13.2.1. | declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, whereupon they shall become immediately due and payable; and/or |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.2.2 | declare that the Loan is payable on demand, whereupon it shall immediately become payable on demand by the Lender. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

----

| 14   | Assignment and Sub-Participation |
|----------------|----------------------------------|

|   | 14.1 | Lender's rights   The Lender may assign any of its rights under this Agreement or transfer by novation any of its rights and obligations under this Agreement to any  branch or consolidated subsidiary of Deutsche Bank Aktiengesellschaft or, with the Borrower's prior written consent (unless an Event of Default has occurred and is continuing, in which case no Borrower's consent shall be required) to any other bank or financial institution or (for the purpose of a securitisation of the Lender's rights or obligations under the Finance Documents or a similar transaction of broadly equivalent economic effect) to any special purpose vehicle, and may grant sub-participations in all or any part of the Loan. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14.2 | Borrower's co-operation   The Borrower will co-operate fully with the Lender in connection with any assignment, transfer or sub-participation; will execute and procure the execution of such documents as the Lender may require in that connection; and irrevocably authorises the Lender to disclose to any proposed assignee, transferee or sub-participant (whether before or after any assignment, transfer or sub-participation and whether or not any assignment, transfer or sub-participation shall take place) all information relating to the Security Parties, the Loan, the Relevant Documents and the Vessel which the Lender may in its discretion consider necessary or desirable. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14.3 | Rights of assignee or transferee   Any assignee or transferee of the Lender shall (unless limited by the express terms of the assignment or novation) take the full benefit of every provision of the Finance Documents benefitting the Lender. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14.4 | No assignment or transfer by the Borrower   The Borrower may not assign any of its rights or transfer any of its rights or obligations under the Finance Documents. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14.5 | Securitisation   The Lender may disclose the size and term of the Loan and the name of each of the Security Parties to any investor or potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of the Lender's rights or obligations under the Finance Documents. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15   | Set-Off |
|----------------|---------|

|   | 15.1 | Set-off   The Lender and the Swap Provider may set off any matured obligation due from the Borrower under any Finance Document against any matured obligation owed by the Lender or the Swap Provider to the Borrower, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Lender or the Swap Provider may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 15.2 | Master Agreement rights   The rights conferred on the Swap Provider by this Clause 15 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off conferred on the Swap Provider by the Master Agreement. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16   | Payments |
|----------------|----------|

|   | 16.1 | Payments   Each amount payable by the Borrower under a Finance Document shall be paid to such account at such bank as the Lender may from time to time direct to the Borrower in the Currency of Account and in such funds as are customary at the time for settlement of transactions in the relevant currency in the place of payment.  Payment shall be deemed to have been received by the Lender on the date on which the Lender receives authenticated advice of receipt, unless that advice is received by the Lender on a day other than a Business Day or at a time of day (whether on a Business Day or not) when the Lender in its discretion considers that it is impossible or impracticable for the Lender to utilise the amount received for value that same day, in which event the payment in question shall be deemed to have been received by the Lender on the Business Day next following the date of receipt of advice by the Lender. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 16.2 | No deductions or withholdings   Each payment (whether of principal or interest or otherwise) to be made by the Borrower under a Finance Document shall, subject only to Clause 16.3 (Grossing-up), be made free and clear of and without deduction for or on account of any Taxes or other deductions, withholdings, restrictions, conditions or counterclaims of any nature. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 16.3 | Grossing-up   If at any time any law requires (or is interpreted to require) the Borrower to make any deduction or withholding from any payment, or to change the rate or manner in which any required deduction or withholding is made, the Borrower will promptly notify the Lender and, simultaneously with making that payment, will pay to the Lender whatever additional amount (after taking into account any additional Taxes on, or deductions or withholdings from, or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, the Lender receives a net sum equal to the sum which the Lender would have received had no deduction or withholding been made. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 16.4 | Evidence of deductions   If at any time the Borrower is required by law to make any deduction or withholding from any payment to be made by it under a Finance Document, the Borrower will pay the amount required to be deducted or withheld to the relevant authority within the time allowed under the applicable law and will, no later than thirty (30) days after making that payment, deliver to the Lender an original receipt issued by the relevant authority, or other evidence acceptable to the Lender, evidencing the payment to that authority of all amounts required to be deducted or withheld. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 16.5 | Adjustment of due dates   If any payment or transfer of funds to be made under a Finance Document, other than a payment of interest on the Loan or a payment under the Master Agreement, shall be due on a day which is not a Business Day, that payment shall be made on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month in which event the payment shall be made on the next preceding Business Day).  Any such variation of time shall be taken into account in computing any interest in respect of that payment. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 16.6 | Control Account   The Lender shall open and maintain on its books a control account in the name of the Borrower showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement and the Master Agreement.  The Borrower's obligations to repay the Loan and to pay interest and all other sums due under this Agreement and the Master Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 16.6 and those entries will, in the absence of manifest error, be conclusive and binding. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 17   | Notices |
|----------------|---------|

|   | 17.1 | Communications in writing   Any communication to be made under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made by fax or letter. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 17.2 | Addresses   The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party to this Agreement for any communication or document to be made or delivered under or in connection with this Agreement are: |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 17.2.1 | in the case of the Borrower, to Gala Properties Inc., c/o Diana Shipping Services S.A., Pendelis 16, 175 64 Palaio Faliro, Athens, Greece (fax no: +30 210 9470101) marked for the attention of Mr Andreas Michalopoulos; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 17.2.2 | in the case of the Lender, Deutsche Bank Aktiengesellschaft Filiale Deutschlandgeschäft, Ludwig-Erhard-Str. 1, 20459 Hamburg, Germany (fax no: +49 (0)40 3701 4649) marked for the attention of Jörg Zickermann; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | or any substitute address, fax number, department or officer as either party may notify to the other by not less than five (5) Business Days' notice. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 17.3 | Delivery   Any communication or document made or delivered by one party to this Agreement to the other under or in connection this Agreement will only be effective: |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 17.3.2 | if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 17.4 | English language   Any notice given under or in connection with this Agreement must be in English.  All other documents provided under or in connection with this Agreement must be: |
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|   | 17.4.1 | in English; or |
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|   | 17.4.2 | if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
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| 18   | Partial Invalidity |
|----------------|--------------------|

| 19   | Remedies and Waivers |
|----------------|----------------------|

| 20   | Miscellaneous |
|----------------|---------------|

|   | 20.1 | No oral variations   No variation or amendment of a Finance Document shall be valid unless in writing and signed on behalf of the Lender. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.2 | Further assurance   If any provision of a Finance Document shall be invalid or unenforceable in whole or in part by reason of any present or future law or any decision of any court, or if the documents at any time held by or on behalf of the Lender are considered by the Lender for any reason insufficient to carry out the terms of this Agreement, then from time to time the Borrower will promptly, on demand by the Lender, execute or procure the execution of such further documents as in the opinion of the Lender are necessary to provide adequate security for the repayment of the Indebtedness. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.3 | Rescission of payments etc.   Any discharge, release or reassignment by the Lender of any of the security constituted by, or any of the obligations of a Security Party contained in, a Finance Document shall be (and be deemed always to have been) void if any act (including, without limitation, any payment) as a result of which such discharge, release or reassignment was given or made is subsequently wholly or partially rescinded or avoided by operation of any law. |
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|   | 20.4 | Certificates   Any certificate or statement signed by an authorised signatory of the Lender purporting to show the amount of the Indebtedness (or any part of the Indebtedness) or any other amount referred to in any Finance Document shall, save for manifest error or on any question of law, be conclusive evidence as against the Borrower of that amount. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.5 | Counterparts   This Agreement may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.6 | Contracts (Rights of Third Parties) Act 1999   A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.7 | Ancillary Business  Provided such terms are competitive, the Swap Provider shall have the right of first refusal to quote for any derivative transaction to be entered into between the Swap Provider and the Borrower or the Guarantor in relation to this Agreement and/or the Vessel, including without limitation, any interest rate hedging contracts in respect of the Borrower's exposure to interest rate fluctuations in connection with the Loan and shall be secured by the Security Documents. |
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| 21   | Law and Jurisdiction |
|----------------|----------------------|

|   | 21.1 | Governing law   This Agreement and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law. |
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|   | 21.2 | Jurisdiction   For the exclusive benefit of the Lender, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any dispute (a) arising from or in connection with this Agreement or (b) relating to any non-contractual obligations arising from or in connection with this Agreement and that any proceedings may be brought in those courts. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.3 | Alternative jurisdictions   Nothing contained in this Clause 21 shall limit the right of the Lender to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not. |
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|   | 21.4 | Waiver of objections   The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause 21, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction. |
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|   | 21.5 | Service of process   Without prejudice to any other mode of service allowed under any relevant law, the Borrower: |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------|

|   | 21.5.1 | irrevocably appoints Nikolaou & Co., Chartered Accountants, 25 Heath Drive, Potters Bar, Herts, EN6 1EN, England (tel +44 17 0765 2193, Fax +44 17 0766 4340) (for the attention of: Mr. Antonis Nicolaou) as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and |
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|   | 21.5.2 | agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned. |
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|  SIGNED by  Andre-Nikos Michalopoulos  |  ) | /s/ Andre-Nikos Michalopoulos |   |
|-----------------------------------------------------------------|---------|------------------------------------|--------|
|  duly authorised for and on behalf               |  ) |                               |   |
|  of BIKINI SHIPPING COMPANY INC.                           |  ) |                               |   |

|  SIGNED by Ralf Bedranowsky               |  ) | /s/ Ralf Bedranowsky |   |
|-----------------------------------------------------|---------|----------------------|--------|
|  duly authorised for and on behalf   |  ) |                 |   |
|  of DEUTSCHE BANK                              |  ) |                 |   |
|  AKTIENGESELLSCHAFT                            |  ) |                 |   |
|  FILIALE DEUTSCHLANDGESCHÄFT              |  ) |                 |   |