Document:

Exhibit 4.63

Dated:          25 SEPTEMBER 2008

ENIAPROHI SHIPPING CORPORATION

(as Borrower)

- and -

DnB NOR BANK ASA

(as Lender)

	
 

	

	
 

	
US$45,000,000 SECURED

	
MULTI-CURRENCY REDUCING REVOLVING

	
CREDIT FACILITY AGREEMENT

	
 

	

m.v. “ELENI”

STEPHENSON HARWOOD

One St. Paul’s Churchyard

London EC4M 8SH

Tel: 020 7329 4422

Fax: 020 7329 7100

Ref: 04.133

CONTENTS

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
1

	
Definitions
 and Interpretation

	
1

	
 

	
 

	
 

	
2

	
The Loan and
 its Purpose

	
17

	
 

	
 

	
 

	
3

	
Conditions
 of Utilisation

	
17

	
 

	
 

	
 

	
4

	
Advance

	
20

	
 

	
 

	
 

	
5

	
Currency

	
20

	
 

	
 

	
 

	
6

	
Repayment

	
20

	
 

	
 

	
 

	
7

	
Prepayment

	
21

	
 

	
 

	
 

	
8

	
Interest

	
22

	
 

	
 

	
 

	
9

	
Indemnities

	
25

	
 

	
 

	
 

	
10

	
Fees

	
29

	
 

	
 

	
 

	
11

	
Security and
 Application of Moneys

	
29

	
 

	
 

	
 

	
12

	
Representations

	
35

	
 

	
 

	
 

	
13

	
Undertakings
 and Covenants

	
38

	
 

	
 

	
 

	
14

	
Events of
 Default

	
47

	
 

	
 

	
 

	
15

	
Assignment and
 Sub-Participation

	
51

	
 

	
 

	
 

	
16

	
Set-Off

	
52

	
 

	
 

	
 

	
17

	
Payments

	
53

	
 

	
 

	
 

	
18

	
Notices

	
55

	
 

	
 

	
 

	
19

	
Partial
 Invalidity

	
56

	
 

	
 

	
 

	
20

	
Remedies and
 Waivers

	
56

	
 

	
 

	
 

	
21

	
Miscellaneous

	
56

	
 

	
 

	
 

	
22

	
Law and
 Jurisdiction

	
57

	
 

	
 

	
 

	
SCHEDULE 1:

	
Conditions
 Precedent and Subsequent

	
59

	
                    Part
 I: Conditions precedent

	
59

	
                    Part
 II: Conditions subsequent

	
63

	
 

	
 

	
 

	
SCHEDULE 2:

	
Calculation
 of Mandatory Cost

	
64

	
 

	
 

	
 

	
SCHEDULE 3:

	
Form of
 Drawdown Notice

	
67

	
 

	
 

	
 

	
SCHEDULE 4

	
Form of
 Compliance Certificate

	
68

LOAN AGREEMENT

Dated:          
25 September 2008

BETWEEN:

	
 

	
 

	
 

	
(1)

	
ENIAPROHI SHIPPING CORPORATION, a company incorporated under the laws of the Republic of Liberia whose
 registered office is at 80 Broad Street, Monrovia, Liberia (the “Borrower”); and

	
 

	
 

	
 

	
(2)

	
DnB NOR BANK ASA, acting through its office at 20 St.
 Dunstan’s Hill, London EC3R 8HY, England (the “Lender”).

	
 

	
 

	
 

	
WHEREAS:

	
 

	
 

	
 

	
(A)

	
The Borrower
 has agreed to purchase and take delivery of the Vessel from the Seller on the
 terms of the Ship Sale Contract and intends to register the Vessel on
 delivery under the flag of Cyprus.

	
 

	
 

	
 

	
(B)

	
The Lender
 has agreed to advance to the Borrower a secured multi-currency reducing
 revolving credit facility of up to forty five million Dollars ($45,000,000) for
 general working capital purposes in respect of the Group and for the purpose
 of assisting the Borrower in financing part of the acquisition cost of the
 Vessel.

	
 

	
 

	
 

	
IT IS AGREED as follows:

	
 

	
 

	
 

	
1

	
Definitions and Interpretation

	
 

	
 

	
 

	
 

	
1.1

	
In this
 Agreement:

	
 

	
 

	
 

	
 

	
 

	
“Accounting Information” means the annual
 financial statements and/or the quarterly financial statements to be provided
 by the Corporate Guarantor to the Lender in accordance with Clauses 13.1.1
 and 13.1.2 respectively.

	
 

	
 

	
 

	
 

	
 

	
“Accounts” means the Operating Account and
 the Cash Collateral Account.

	
 

	
 

	
 

	
 

	
 

	
“Accounts Charge” means the deed of charge
 referred to in Clause 11.1.3.

	
 

	
 

	
 

	
“Administration” has the meaning given to it in paragraph 1.1.3 of the ISM
 Code.

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Assignment” means the deed of assignment referred to in Clause 11.1.2.

	
 

	
 

	
 

	
“Availability Termination Date” means
 three (3) months prior to the Final Maturity Date or such later date as the
 Lender may in its discretion agree.

	
 

	
 

	
 

	
“Avstes” means Avstes Shipping
 Corporation, a company incorporated according to the laws of the Republic of
 Liberia or such other company which shall be its successor in title.

	
 

	
 

	
 

	
“Avstes Agreement” means the reducing revolving
 multi-currency credit facility agreement dated 17 April 2008, as amended and
 supplemented by a first supplemental agreement dated 22 May 2008, each made
 between Avstes, as borrower and the Lender, as lender, as the same may be
 further amended and/or supplemented and/or novated from time to time.

	
 

	
 

	
 

	
“Avstes Indebtedness” means the Indebtedness as such term is
 defined in the Avstes Agreement.

	
 

	
 

	
 

	
“Break Costs” means all sums payable by the Borrower from time to time under
 Clause 9.3.

	
 

	
 

	
 

	
“Broker” means any one of Arrow Chartering
 (UK), Braemer Seascope Group, Clarksons PLC and Fearnleys and “Brokers” means more than one of them.

	
 

	
 

	
 

	
“Builder” means IHI Marine United Inc., a corporation organised and
 existing under the laws of Japan, having its registered office at 22-23,
 Kaigan 3-chome, Minato-ku, Tokyo 108-0022, Japan.

2

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Business Day” means a day (other than a Saturday or Sunday) on which
 banks are open for general business in New York, Athens and London and Tokyo
 (only if an amount in Japanese Yen is involved) and Zurich (only if an amount
 in Swiss Francs is involved) and any other financial centre which the Lender
 may consider appropriate for the operation of the provisions of this
 Agreement, and in the case of Euro, a day on which the Trans-European
 Automated Real Time Gross Settlement Express Transfer Payment System (TARGET)
 is operating.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Cash Collateral Account” means the bank
 account to be opened (if and when required) in the name of the Borrower with
 the Lender and designated “63647003 - Cash Collateral Account”.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Charters” means the Existing Charter and
any other time charter or other contact of employment in respect of the
Vessel which shall not exceed thirteen (13) months duration and “Charter”
means either of them. 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Charterer” means Daiichi Chuo Kisen Kaisha of Tokyo, Japan or any
 other charterer who has entered into or shall enter into a Charter and “Charterers” means more than one of
them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Compliance Certificate” means a
 certificate substantially in the form set out in Schedule 4 in form and
 substance satisfactory to the Lender.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Consolidated Group Leverage” means at any
 relevant time Consolidated Total Liabilities divided by Consolidated Total
 Assets.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Consolidated Total Assets” means, at any
 date, the aggregate of:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the then
 current market values of all vessels owned by any member of the Group (in the
 case of a Vessel or any other vessel, the market value shall be determined by
 reference only to the most recent valuation of such Vessel or vessel in
 accordance with Clause 11.11);

3

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the then
 current aggregate amount of cash, Marketable Securities (but no other bonds,
 notes or bills and less any cash or Marketable Securities accounted for in
 the definition of Consolidated Total Liabilities below) and receivables due
 to the Group (less provision for bad and doubtful debts) as shown in the
 latest financial statements; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the book
 values of all other assets (other than the assets referred to in
 sub-paragraphs (a) and (b) hereof) as shown in such latest financial
 statements.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Consolidated Total Liabilities” means, at
 the relevant date and for a particular period, the aggregate of the
 consolidated Financial Indebtedness of the Group shown in the latest
 consolidated financial statements for the Group (excluding (i) liabilities to
 its shareholders, provided that they are subordinated on terms acceptable to
 the Lender in its discretion and (ii) debt that is fully collateralised by
 cash or Marketable Securities to which the right of access, use or dealing is
 blocked for any member of the Group solely to secure that debt).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Converted” means actually or notionally (as the case may require)
 converted by the Lender at the rate at which the Lender, in accordance with
 its usual practice, is able in the London Interbank market to purchase the
 Permitted Currency in which any part of the Loan is to be denominated with
 the Permitted Currency in which the Loan is then denominated, on the second
 Business Day before the value date for that conversion pursuant to Clause 5,
 and the words “Convert” and “Conversion” shall be interpreted
 accordingly.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Corporate Guarantee” means the guarantee
 and indemnity referred to in Clause 11.1.5

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Corporate Guarantor” means Safe Bulkers
 Inc., a company incorporated according to the laws of the Republic of
 Marshall Islands or such other company which shall be its successor in title.

4

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Credit Support Document” means any
 document described as such in the Master Agreement and, where the context
 permits, any other document referred to in any Credit Support Document which
 has the effect of creating an Encumbrance in favour of the Lender.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Credit Support Provider” means any person
 (other than the Borrower) described as such in the Master Agreement.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Currency of Account” means, in relation
 to any payment to be made to the Lender under a Finance Document, the
 currency in which that payment is required to be made by the terms of that
 Finance Document.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Current Shareholders” means the
 shareholders of the Corporate Guarantor who beneficially hold directly or
 indirectly not less than fifty one per cent (51%) of the shares in the
 Corporate Guarantor on the Signing Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Debt” means the aggregate (as of the date
 of calculation) of all obligations of the Group then outstanding for the
 payment or repayment of Financial Indebtedness as stated in the Accounting
 Information then most recently required to be delivered pursuant to Clauses
 13.1.1 and 13.1.2 including, without limitation:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
any amounts
 payable by the Group under leases, including, but not limited to, time
 chartering contracts, or similar arrangements over their respective periods;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
any credit
 to the Group from a supplier of goods or under any instalment purchase or
 other similar arrangement;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

5

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
any deferred
 tax liabilities.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Deed of Covenants” means the deed of
 covenants referred to in Clause 11.1.1.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Default” means an Event of Default or any
 event or circumstance specified in Clause 14.1 which would (with the expiry
 of a grace period, the giving of notice, the making of any determination
 under the Finance Documents or any combination of any of the foregoing) be an
 Event of Default.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Delivery Date” means the date of actual
 delivery of the Vessel to the Borrower by the Seller under the Ship Sale
 Contract.

	
 

	
 

	
 

	
 

	
 

	
 

	
“DOC” means, in relation to the ISM
 Company, a valid Document of Compliance issued for the ISM Company by the
 Administration under paragraph 13.2 of the ISM Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Dollars” and “$” each means available and freely transferable and
 convertible funds in lawful currency of the United States of America.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Drawdown Date” means the date on which a
 Drawing is advanced under Clause 4.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Drawdown Notice” means a notice
 substantially in the form set out in Schedule 3.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Drawing” means any one amount advanced or to be advanced pursuant to a
 Drawdown Notice or, where the context permits, the amount advanced and for
 the time being outstanding and “Drawings” means more than one of them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Earnings” means all hires, freights, pool income and other sums payable
 to or for the account of the Borrower in respect of the Vessel including
 (without limitation) all remuneration for salvage and towage services,
 demurrage and detention moneys, contributions in general average,
 compensation in respect of any requisition for hire, and damages and other
 payments (whether awarded by any court or arbitral tribunal or by agreement
 or otherwise) for breach, 

6

	
 

	
 

	
 

	
 

	
 

	
 

	
termination
 or variation of any contract for the operation, employment or use of the
 Vessel.

	
 

	
 

	
 

	
 

	
 

	
 

	
“EBITDA” on a consolidated basis of the
 Group means the earnings before interest, expenses and other financial
 charges, taxes, depreciation and amortization (for the previous period of
 twelve months).

	
 

	
 

	
 

	
 

	
 

	
 

	
“Efragel” means Efragel Shipping
 Corporation, a company incorporated according to the laws of the Republic of
 Liberia or such other company which shall be its successor in title.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Efragel Agreement” means the reducing
 revolving multi-currency credit facility agreement dated 11 January 2008, as
 amended and supplemented by a first supplemental agreement dated 22 May 2008,
 each made between Efragel, as borrower and the Lender, as lender, as the same
 may be further amended and/or supplemented and/or novated from time to time.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Efragel Indebtedness” means the
 Indebtedness as such term is defined in the Efragel Agreement.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Encumbrance” means a mortgage, charge,
 assignment, pledge, lien, or other security interest securing any obligation
 of any person or any other agreement or arrangement having a similar effect.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Eniadefhi” means Eniadefhi Shipping Corporation, a company incorporated
 according to the laws of the Republic of Liberia or such other company which
 shall be its successor in title.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Eniadefhi Agreement” means the reducing revolving
 multi-currency credit facility agreement entered or to be entered between
 Eniadefhi, as borrower and the Lender, as lender, as the same may be amended
 and/or supplemented and/or novated from time to time.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Eniadefhi Indebtedness” means the Indebtedness as such
 term is defined in the Eniadefhi Agreement.

7

	
 

	
 

	
 

	
 

	
 

	
 

	
“Eniaprohi Guarantees” means the guarantees
 and indemnities to be granted by the Borrower in favour of the Lender in
 respect of each of the Pelea Indebtedness, the Efragel Indebtedness, the
 Marindou Indebtedness, the Avstes Indebtedness and the Eniadefhi Indebtedness
 and “Eniaprohi Guarantee” means any one of them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Euro” and “€” means the single currency of the Participating Member
 States.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Event of Default” means any of the events
 or circumstances set out in Clause 14.1.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Existing Charter” means in respect of the Vessel the time charter dated November
 2007 made between the Managers and the Charterer, as the same may be amended
 and/or supplemented and/or novated from time to time.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Facility Period” means the period beginning on the Signing Date and ending on
 the date when the whole of the Indebtedness has been paid in full and the
 Security Parties have ceased to be under any further actual or contingent
 liability to the Lender under or in connection with the Finance Documents.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Final Maturity Date” means the date
 falling on the earlier of (a) ten (10) years from the Delivery Date and (b)
 30 November 2018.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Finance Documents” means this Agreement,
 the Master Agreement, the Security Documents and any other document
 designated as such by the Lender and the Borrower and “Finance Document” means any one of them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Financial Indebtedness” means any
 obligation for the payment or repayment of money, whether present or future,
 actual or contingent, in respect of:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
moneys
 borrowed;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
any
 acceptance credit;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
any bond,
 note, debenture, loan stock or similar instrument;

8

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
any finance
 or capital lease; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
receivables
 sold or discounted (other than on a non-recourse basis);

	
 

	
 

	
 

	
 

	
 

	
 

	
(f)

	
deferred
 payments for assets or services;

	
 

	
 

	
 

	
 

	
 

	
 

	
(g)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(h)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(j)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
“GAAP” means generally accepted accounting
 principles in the United States of America.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Group” means the Corporate Guarantor and
 its Subsidiaries.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Group Guarantees” means the guarantees and indemnities of the Group Guarantors
 referred to in Clause 11.1.4, and “Group
 Guarantee” means
 any one of them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Group Guarantors” means Efragel, Pelea, Avstes, Eniadefhi and Marindou, and “Group
Guarantor” means any one of them.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Guarantees” means the Corporate Guarantee and the Group Guarantees and “Guarantee”
means any one of them.

9

	
 

	
 

	
 

	
 

	
 

	
“Guarantors” means the Corporate Guarantor and the Group Guarantors, and
“Guarantor” means any one of them.

	
 

	
 

	
 

	
 

	
 

	
“IAPPC” means a valid international air pollution prevention
 certificate for the Vessel issued under Annex VI.

	
 

	
 

	
 

	
 

	
 

	
“Indebtedness” means the aggregate from time to time of: the amount of the
 Loan outstanding; all accrued and unpaid interest on the Loan; and all other
 sums of any nature (together with all accrued and unpaid interest on any of
 those sums) payable to the Lender under all or any of the Finance Documents.

	
 

	
 

	
 

	
 

	
 

	
“Insurances” means all policies and contracts of insurance (including all
 entries in protection and indemnity or war risks associations) which are from
 time to time taken out or entered into in respect of or in connection with
 the Vessel or her increased value or the Earnings and (where the context
 permits) all benefits under such contracts and policies, including all claims
 of any nature and returns of premium.

	
 

	
 

	
 

	
 

	
 

	
“Interest Payment Date” means each date for
 the payment of interest in accordance with Clause 8.7.

	
 

	
 

	
 

	
 

	
 

	
“Interest Period” means each period for the determination and payment of
 interest selected by the Borrower or agreed or selected by the Lender
 pursuant to Clause 8.

	
 

	
 

	
 

	
 

	
 

	
“ISM Code” means the International
 Management Code for the Safe Operation of Ships and for Pollution Prevention.

	
 

	
 

	
 

	
 

	
 

	
“ISM Company” means, at any given time,
 the company responsible for the Vessel’s compliance with the ISM Code under
 paragraph 1.1.2 of the ISM Code.

	
 

	
 

	
 

	
 

	
 

	
“ISPS Code” means the International Ship and Port Facility Security Code.

	
 

	
 

	
 

	
 

	
 

	
“ISPS Company” means, at any given time,
 the company responsible for the Vessel’s compliance with the ISPS Code.

10

	
 

	
 

	
 

	
 

	
 

	
 

	
“ISSC” means a valid international ship
 security certificate for the Vessel issued under the ISPS Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
“LIBOR” means:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the
 applicable Screen Rate; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
at 11.00
 a.m. two (2) Business Days before the first day of the relevant Interest
 Period for the offering of deposits in Dollars or its equivalent in a
 Permitted Currency in an amount comparable to the Loan (or any relevant part
 of the Loan) and for a period comparable to the relevant Interest Period.

	
 

	
 

	
 

	
 

	
 

	
“Loan” means the aggregate amount advanced
 or to be advanced by the Lender to the Borrower under Clause 4 or, where the
 context permits, the amount advanced and for the time being outstanding.

	
 

	
 

	
 

	
 

	
 

	
“Management Agreement” means the
 agreement(s) for the commercial and/or technical management of the Vessel
 between the Borrower and the Managers.

	
 

	
 

	
 

	
 

	
 

	
“Managers” means Safety Management
 Overseas S.A., or such other commercial and/or technical managers of the
 Vessel nominated by the Borrower as the Lender may approve.

	
 

	
 

	
 

	
 

	
 

	
“Mandatory Cost” means the percentage rate
 per annum calculated by the Lender in accordance with Schedule 2.

	
 

	
 

	
 

	
 

	
 

	
“Margin” means zero point ninety per cent
 (0.90%) per annum.

	
 

	
 

	
 

	
 

	
 

	
“Marindou” means Marindou Shipping Corporation, a company incorporated
 according to the laws of the Republic of Liberia or such other company which
 shall be its successor in title.

11

	
 

	
 

	
 

	
 

	
 

	
“Marindou Agreement” means the reducing
 revolving multi-currency credit facility agreement dated 11 January 2008, as
 amended and supplemented by a first supplemental agreement dated 22 May 2008,
 each made between Marindou, as borrower and the Lender, as lender, as the
 same may be further amended and/or supplemented and/or novated from time to
 time.

	
 

	
 

	
 

	
 

	
 

	
“Marindou Indebtedness” means the Indebtedness as such
 term is defined in the Marindou Agreement.

	
 

	
 

	
 

	
 

	
 

	
“Marketable Securities” means any bonds,
 stocks, notes or bills payable in a freely convertible and transferable
 currency and which are listed on a stock exchange acceptable to the Lender.

	
 

	
 

	
 

	
 

	
 

	
“Master Agreement” means any ISDA Master Agreement (or any other form of master
 agreement relating to interest or currency exchange transactions) entered
 into between the Lender and the Borrower during the Facility Period,
 including each Schedule to any Master Agreement and each Confirmation
 exchanged pursuant to any Master Agreement.

	
 

	
 

	
 

	
 

	
 

	
“Maximum Amount” means forty five million
 Dollars ($45,000,000) reduced from time to time in accordance with Clause 3.4
 and/or Clause 7.4 and/or Clause 8.9.5.

	
 

	
 

	
 

	
 

	
 

	
“Mortgage” means the first priority statutory mortgage referred to in
 Clause 11.1.1 together with the Deed of Covenants.

	
 

	
 

	
 

	
 

	
 

	
“Mortgagee’s Insurances” means all policies and contracts
 of mortgagee’s interest insurance from time to time taken out by the Lender
 in relation to the Vessel.

	
 

	
 

	
 

	
 

	
 

	
“Net Worth” means Consolidated Total Assets less Consolidated Total
 Liabilities.

12

	
 

	
 

	
 

	
 

	
 

	
“Operating Account” means the bank account
 opened in the name of the Managers with the Lender and designated “Eniaprohi
 Shipping Corporation — Operating Account” with account number 63647001.

	
 

	
 

	
 

	
 

	
 

	
“Participating Member States” means any
 member state of the European Community that adopts or has adopted the Euro as
 its lawful currency in accordance with legislation of the European Community
 relating to Economic and Monetary Union.

	
 

	
 

	
 

	
 

	
 

	
“Pelea” means Pelea Shipping Ltd., a company
 incorporated according to the laws of the Republic of Liberia or such other
 company which shall be its successor in title.

	
 

	
 

	
 

	
 

	
 

	
“Pelea Agreement” means the reducing
 revolving multi-currency credit facility agreement dated 12 June 2007, as
 amended and supplemented by a supplemental agreement dated 22 May 2008, and
 as further amended and supplemented by a second supplemental agreement dated
 25 September 2008, each made between Pelea and the Lender, as the same may be
 further amended and/or supplemented and/or novated from time to time.

	
 

	
 

	
 

	
 

	
 

	
“Pelea Indebtedness” means the
 Indebtedness as such term is defined in the Pelea Agreement.

	
 

	
 

	
 

	
 

	
 

	
“Permitted Currency” means Japanese Yen,
 Swiss Francs, Euro and Dollars.

	
 

	
 

	
 

	
 

	
 

	
“Reduction Date” means each date falling
 at consecutive six monthly intervals after the first Drawdown Date.

	
 

	
 

	
 

	
 

	
 

	
“Relevant Documents” means the Finance
 Documents, the Management Agreement and the Managers’ confirmation specified
 in Part I of Schedule 1.

	
 

	
 

	
 

	
 

	
 

	
“Requisition Compensation” means all
 compensation or other money which may from time to time be payable to the
 Borrower as a result of the Vessel being requisitioned for title or in any
 other way compulsorily acquired (other than by way of requisition for hire).

13

	
 

	
 

	
 

	
 

	
 

	
“Screen Rate” means in relation to LIBOR,
 the British Bankers’ Association Interest Settlement Rate for the relevant
 currency and period displayed on the appropriate page of the Reuters screen.
 If the agreed page is replaced or the service ceases to be available, the
 Lender may specify another page or service displaying the appropriate rate
 after consultation with the Borrower.

	
 

	
 

	
 

	
 

	
 

	
“Security Documents” means the Mortgage, the Deed of Covenants, the Assignment, the
 Accounts Charge, the Guarantees, any other Credit Support Documents or (where
 the context permits) any one or more of them and any other agreement or
 document which may at any time be executed by any person as security for the
 payment of all or any part of the Indebtedness and “Security Document” means any one of them.

	
 

	
 

	
 

	
 

	
 

	
“Security Parties” means the Borrower, the Guarantors and any other Credit
 Support Provider and any other person who may at any time during the Facility
 Period be liable for, or provide security for, all or any part of the
 Indebtedness, and “Security Party”
 means any one of them.

	
 

	
 

	
 

	
 

	
 

	
“Seller” means Itochu Corporation, a
 corporation organized and existing under the laws of Japan, having its
 registered office at 5-1, Kita-Aoyama 2 chome, Minato-ku, Tokyo, 107-8077,
 Japan.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Ship Sale Contract” means the contract
 dated 28 August 2006, as the same may be amended and/or supplemented and/or
 novated and/or replaced from time to time, made between the Borrower, as
 buyer, and the Seller, as seller, on the terms and subject to the conditions
 of which the Seller has agreed to cause the Builder to construct, equip and
 complete the Vessel at one of the Builder’s shipyards in Yokohama or Kure,
 Japan, and to sell and deliver the Vessel to the Borrower.

	
 

	
 

	
 

	
 

	
 

	
“Side Letter” means the side letter evidencing the Current Shareholders of
 the Corporate Guarantor on the Signing Date issued by the Corporate Guarantor
 in favour of the Lender in such form as the Lender may require.

14

	
 

	
 

	
 

	
 

	
 

	
 

	
“Signing Date” means the date of signing of this Agreement which shall occur
 no later than 26 September 2008.

	
 

	
 

	
 

	
 

	
 

	
 

	
“SMC” means a valid safety management certificate issued for the
 Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM
 Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
“SMS” means a safety management system for the Vessel developed and
 implemented in accordance with the ISM Code.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Subsidiary” has the meaning ascribed to
 it by section 1159 of the Companies Act 2006 (as the same may be amended
 and/or supplemented from time to time), and “Subsidiaries” shall be interpreted accordingly.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Swiss Francs” and “SFr” means
 available and freely transferable and convertible funds in non-resident
 currency of Switzerland.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Tax” means any tax, levy, impost, duty or
 other charge or withholding of a similar nature (including any penalty or
 interest payable in connection with any failure to pay or any delay in paying
 any of the same).

	
 

	
 

	
 

	
 

	
 

	
 

	
“Total Loss” means:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
an actual,
 constructive, arranged, agreed or compromised total loss of the Vessel; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the capture,
 seizure, arrest, detention or confiscation of the Vessel by any government or
 by persons acting or purporting to act on behalf of any government, unless
 the Vessel is released and returned to the possession of the Borrower within
 one month after the capture, seizure, arrest, detention or confiscation in question.

15

	
 

	
 

	
 

	
 

	
 

	
 

	
“Transaction” means a transaction entered
 into between the Lender and the Borrower governed by the Master Agreement. 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Vessel” means the approximately 87,000
 dwt panamax dry bulk carrier vessel “ELENI” with Builder’s hull number 3254,
 which will be delivered in November 2008 and which will be registered upon
 its delivery in the ownership of the Borrower under the laws and flag of the
 Republic of Cyprus together with everything now or in the future belonging to
 her on board and ashore.

	
 

	
 

	
 

	
 

	
 

	
 

	
“Japanese Yen” and “Y” means available and freely
 transferable and convertible funds in non-resident currency of Japan.

	
 

	
 

	
 

	
 

	
 

	
1.2

	
In this
 Agreement:

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.1

	
words
 denoting the plural number include the singular and vice versa;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.3

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.4

	
references
 to this Agreement include the Recitals and the Schedules;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.5

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.6

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.7

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

16

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.8

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.9

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.2.10

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

	
 

	
 

	
 

	
 

	
 

	
1.3 

	
Offer letter

	
 

	
 

	
 

	
 

	
 

	
 

	
This
 Agreement supersedes the terms and conditions contained in any correspondence
 relating to the subject matter of this Agreement exchanged between the Lender
 and the Borrower or their representatives prior to the Signing Date.

	
 

	
 

	
 

	
 

	
2

	
The Loan and its Purpose

	
 

	
 

	
 

	
 

	
 

	
2.1

	
Amount Subject to the terms of this Agreement, the Lender agrees to make available
to the Borrower a revolving credit facility in an aggregate amount not
exceeding the Maximum Amount at any one time. 

	
 

	
 

	
 

	
 

	
 

	
2.2

	
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 any Drawing advanced unless the Lender has received all of
 the documents and other evidence listed in Part I of Schedule 1.

	
 

	
 

	
 

	
 

	
 

	
3.2

	
Further conditions precedent The Lender will
 only be obliged to advance a Drawing if on the date of the Drawdown Notice
 and on the proposed Drawdown Date:

17

	
 

	
 

	
 

	
 

	
 

	
 

	
3.2.1

	
no Default
 is continuing or would result from the advance of that Drawing; and

	
 

	
 

	
 

	
 

	
 

	
 

	
3.2.2

	
the
 representations made by the Borrower under Clause 12 are true in all material
 respects.

	
 

	
 

	
 

	
 

	
 

	
3.3

	
Drawing limit The Lender will only be
 obliged to advance a Drawing if:

	
 

	
 

	
 

	
 

	
 

	
 

	
3.3.1

	
no other
 Drawing has been made on the same Business Day;

	
 

	
 

	
 

	
 

	
 

	
 

	
3.3.2

	
that
 Drawing is not less than one million Dollars ($1,000,000) or, if in excess of
 one million Dollars ($1,000,000), integral multiples of five hundred thousand
 Dollars ($500,000); and

	
 

	
 

	
 

	
 

	
 

	
 

	
3.3.3

	
that Drawing
 will not increase the outstanding amount of the Loan to a sum in excess of
 the Maximum Amount.

	
 

	
 

	
 

	
 

	
 

	
3.4

	
Reduction of Maximum Amount The Maximum
 Amount:

	
 

	
 

	
 

	
 

	
 

	
 

	
3.4.1

	
shall be
 reduced by twenty (20) reduction amounts, the first nineteen (19) reduction
 amounts on each of the Reduction Dates, each reduction amount in the amount
 of one million one hundred and twenty five thousand Dollars ($1,125,000) and
 the final reduction amount in the amount of twenty three million six hundred
 and twenty five thousand Dollars ($23,625,000) (comprising of a reduction
 amount of one million one hundred and twenty five thousand Dollars
 ($1,125,000) and a balloon reduction of twenty two million five hundred
 thousand Dollars ($22,500,000)), the first Reduction Date being the date
 which is six (6) calendar months from the Delivery Date and subsequent
 Reduction Dates being at consecutive intervals of six (6) calendar months
 thereafter, with the last Reduction Date being on the Final Maturity Date;
 and

	
 

	
 

	
 

	
 

	
 

	
 

	
3.4.2

	
may (in
 addition to any reduction required under Clause 3.4.1) be reduced by the
 Borrower by five hundred thousand Dollars ($500,000) or an integral multiple
 of that amount with effect from any Business Day by 

18

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
written
 notice to the Lender given not fewer than fourteen (14) days prior to that
 Business Day, which notice shall be irrevocable. Any voluntary reduction in
 the Maximum Amount shall be in addition to, and without prejudice to, the
 mandatory reductions in the Maximum Amount made pursuant to Clause 3.4.1 and
 may not be reversed. Any reduction under this Clause 3.4.2 shall satisfy the
 obligations under Clause 3.4.1 in order of maturity. Amounts repaid by the
 Borrower pursuant to this Clause shall not be available for reborrowing.

	
 

	
 

	
 

	
 

	
 

	
3.5

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

	
 

	
 

	
 

	
 

	
 

	
3.6

	
No Waiver If the Lender in its sole discretion
 agrees to advance a Drawing to the Borrower before all of the documents and
 evidence required by Clause 3.1 have been delivered to or to the order of the
 Lender, the Borrower undertakes to deliver all outstanding documents and
 evidence to or to the order of the Lender no later than the date specified by
 the Lender. 

	
 

	
 

	
 

	
 

	
 

	
 

	
The advance
 of a Drawing under this Clause 3.6 shall not be taken as a waiver of the
 Lender’s right to require production of all the documents and evidence
 required by Clause 3.1.

	
 

	
 

	
 

	
 

	
 

	
3.7

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

	
 

	
 

	
 

	
 

	
 

	
 

	
3.7.1

	
be in form
 and substance acceptable to the Lender;

	
 

	
 

	
 

	
 

	
 

	
 

	
3.7.2

	
if required
 by the Lender, be certified, notarised, legalised or attested in a manner
 acceptable to the Lender; and

	
 

	
 

	
 

	
 

	
 

	
 

	
3.7.3

	
if copies,
 be certified as true and complete copies by a director or the secretary or
 the legal advisor or a duly authorised attorney-in-fact of the Borrower.

19

	
 

	
 

	
 

	
 

	
4

	
Advance

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
5

	
Currency

	
 

	
 

	
 

	
 

	
 

	
5.1

	
Conversion The Borrower may Convert all or
 any part of the Loan into a Permitted Currency not later than five (5)
 Business Days before the Drawdown Date or at any time during the Facility
 Period, subject to there being no Event of Default which is continuing and
 subject to the Permitted Currency being available to the Lender. Upon
 conversion, that part of the Loan shall remain denominated in, and shall be
 repayable in, the Permitted Currency until the end of the relevant Interest
 Payment Date. Clause 3.4 shall be amended so that the Maximum Amount of the
 Loan shall be reduced in the Permitted Currency or Permitted Currencies
 selected under this Clause, provided that the Reduction Dates specified in
 Clause 3.4 shall not be changed.

	
 

	
 

	
 

	
 

	
 

	
5.2

	
Indemnity The Borrower shall indemnify the
 Lender from time to time on demand against all Break Costs, other losses,
 costs, claims, damages and expenses which the Lender may from time to time
 suffer, incur or sustain by reason of the Lender agreeing to and/or
 implementing the terms of this Clause (including, without limitation, all
 costs and expenses incurred by the Lender in effecting any conversion).

	
 

	
 

	
 

	
 

	
6

	
Repayment

	
 

	
 

	
 

	
6.1

	
Repayment of each Drawing The Borrower agrees
 to repay each Drawing to the Lender on the last day of the Interest Period in
 respect of that Drawing. On the Final Maturity Date the Borrower shall repay
 to the Lender all amounts then outstanding under or pursuant to this
 Agreement. Without limitation to the repayments required by Clause 3.4, in
 addition the Borrower may repay any

20

	
 

	
 

	
 

	
 

	
 

	
 

	
Drawing in
 whole or in part in integral multiples of five hundred thousand Dollars
 ($500,000) (or the equivalent in the Permitted Currency in which the Drawing in
 question is then denominated) and no repayment shall be made in an amount
 which is less than one million Dollars ($1,000,000) (or the equivalent in the
 Permitted Currency in which the Drawing in question is then denominated) (or
 as otherwise may be agreed by the Lender) provided that it has first given to
 the Lender not fewer than two (2) Business Days’ prior written notice
 expiring on a Business Day of its intention to do so. Any notice pursuant to
 this Clause once given shall be irrevocable and shall oblige the Borrower to
 make the repayment referred to in the notice on the Business Day specified in
 the notice, together with all interest accrued on the amount repaid up to and
 including that Business Day and any repaid amount shall not be available for
 reborrowing.

	
 

	
 

	
 

	
 

	
7

	
Prepayment

	
 

	
 

	
 

	
 

	
 

	
7.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
7.1.1

	
the Lender
 shall promptly notify the Borrower of that event; and

	
 

	
 

	
 

	
 

	
 

	
 

	
7.1.2

	
the Borrower
 shall repay any Drawing on the last day of its current Interest Period or, if
 earlier, the date specified by the Lender in the notice delivered to the
 Borrower (being no earlier than the last day of any applicable grace period
 permitted by law).

	
 

	
 

	
 

	
 

	
 

	
7.2

	
Voluntary prepayment of Loan The Borrower
 may prepay the whole or any part of a Drawing (but, if in part, being an
 amount that reduces that Drawing by a minimum amount of five hundred thousand
 Dollars ($500,000) or an integral multiple of that amount (or as otherwise
 may be agreed by the Lender) provided that it gives the Lender not less than
 fourteen (14) Business Days’ (or such shorter period of the notice as the
 Lender may agree) prior notice. Amounts prepaid by the Borrower pursuant to
 this Clause shall be available for reborrowing in accordance with Clause 3
 prior to the Availability Termination Date. Any 

21

	
 

	
 

	
 

	
 

	
 

	
 

	
prepayment
 under this Clause 7.2 shall satisfy the obligations under Clause 6.1 in order
 of maturity.

	
 

	
 

	
 

	
 

	
 

	
7.3

	
Mandatory prepayment on sale or Total Loss Upon
 the sale or Total Loss of the Vessel, the Maximum Amount shall reduce to zero
 and the Borrower shall repay the Indebtedness in full, in the case of a sale
 of the Vessel, by not later than the date of the sale of the Vessel or, in
 the case of a Total Loss, by not later than the date falling one hundred and
 eighty (180) days from the date of the casualty giving rise to the Total Loss
 (or such longer period as the Lender may in its discretion agree). Amounts
 prepaid by the Borrower pursuant to this Clause shall not be available for
 reborrowing.

	
 

	
 

	
 

	
 

	
 

	
7.4

	
Mandatory prepayment on reduction of Maximum Amount If
 the Maximum Amount is reduced in accordance with Clause 3.4 to an amount
 which is less than the aggregate amount of the Drawings then outstanding, the
 Borrower shall, simultaneously with that reduction, prepay one or more
 outstanding Drawings to the extent required to ensure that the aggregate
 amount of the Drawings outstanding does not exceed the reduced Maximum
 Amount.

	
 

	
 

	
 

	
 

	
 

	
7.5

	
Restrictions Any notice of prepayment given
 under this Clause 7 shall be irrevocable and, unless a contrary indication
 appears in this Agreement, shall specify the date or dates upon which the relevant
 prepayment is to be made and the amount of that prepayment.

	
 

	
 

	
 

	
 

	
 

	
 

	
Any
 prepayment under this Agreement shall be made together with accrued interest
 on the amount prepaid and, subject to any Break Costs, without premium or
 penalty.

	
 

	
 

	
 

	
 

	
8

	
Interest

	
 

	
 

	
 

	
 

	
 

	
8.1

	
Interest Periods The period during which
 each Drawing shall be outstanding under this Agreement shall be an Interest
 Period of one (1), three (3), six (6), nine (9) or twelve (12) months’
 duration, as selected by the Borrower in the Drawdown Notice in respect of
 the Drawing in question, or such other duration as may be 

22

	
 

	
 

	
 

	
 

	
 

	
 

	
agreed by
 the Lender, provided that the Borrower shall not select more than three (3)
 Interest Periods of one (1) month’s duration per calendar year.

	
 

	
 

	
 

	
 

	
 

	
8.2

	
Beginning and end of Interest Periods Each
 Interest Period shall start on the Drawdown Date of the Drawing in question
 and end on the date which numerically corresponds to that Drawdown Date in
 the relevant calendar month except that, if there is no numerically
 corresponding date in that calendar month, the Interest Period shall end on
 the last Business Day in that month.

	
 

	
 

	
 

	
 

	
 

	
8.3

	
Interest Periods to meet Maturity Date If an
 Interest Period for a Drawing would otherwise expire after the Maturity Date,
 the Interest Period for that Drawing shall expire on the Maturity Date.

	
 

	
 

	
 

	
 

	
 

	
8.4

	
Non-Business 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).

	
 

	
 

	
 

	
 

	
 

	
8.5

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

	
 

	
 

	
 

	
 

	
 

	
8.6

	
Failure to select Interest Period If the
 Borrower at any time fails to select or agree an Interest Period in
 accordance with Clause 8.1, the interest rate applicable shall be the rate
 determined by the Lender in accordance with Clause 8.5 for an Interest Period
 of such duration (not exceeding six months) as the Lender may select.

	
 

	
 

	
 

	
 

	
 

	
8.7

	
Accrual and payment of 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 six (6) 

23

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
months, on
 the dates falling at six (6) monthly intervals after the first day of that
 Interest Period.

	
 

	
 

	
 

	
 

	
8.8

	
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 one per
 cent (1%) higher than the rate which would have been payable if the overdue
 amount had, during the period of non-payment, constituted a Drawing in the
 currency of the overdue amount for successive Interest Periods, each selected
 by the Lender (acting reasonably). Any interest accruing under this Clause
 8.8 shall be immediately payable by the Borrower on demand by the Lender. If
 unpaid, any such interest will be compounded with the overdue amount at the
 end of each Interest Period applicable to that overdue amount but will remain
 immediately due and payable.

	
 

	
 

	
 

	
 

	
 

	
8.9

	
Changes in market circumstances If at any
 time the Lender determines (which determination shall be final and conclusive
 and binding on the Borrower) that, by reason of changes affecting the London
 interbank market, adequate and fair means do not exist for determining the
 rate of interest on a Drawing for any Interest Period:

	
 

	
 

	
 

	
 

	
 

	
 

	
8.9.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
8.9.2

	
the rate of
 interest on the relevant Drawing for that Interest Period shall be the rate
 per annum which is the sum of:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the Margin;
 and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the rate
 which expresses as a percentage rate per annum the cost to the Lender of
 funding the relevant Drawing from whatever source it may reasonably select;
 and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the
 Mandatory Cost, if any,

24

	
 

	
 

	
 

	
 

	
 

	
 

	
PROVIDED
 THAT if the resulting rate of interest is not acceptable to the Borrower:

	
 

	
 

	
 

	
 

	
 

	
 

	
8.9.3

	
the Lender
 will negotiate with the Borrower in good faith with a view to modifying this
 Agreement to provide a substitute basis for determining the rate of interest
 which is financially a substantial equivalent to the basis provided for in
 this Agreement;

	
 

	
 

	
 

	
 

	
 

	
 

	
8.9.4

	
any
 substitute basis agreed pursuant to Clause 8.9.3 shall be binding on the
 parties to this Agreement; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.9.5

	
if, within
 thirty (30) days of the giving of the notice referred to in Clause 8.9.1, the
 Borrower and the Lender fail to agree in writing on a substitute basis for
 determining the rate of interest in respect of the relevant Drawing, the
 Lender shall cease to be obliged to advance that Drawing, but, if it has
 already been advanced, the Borrower will immediately prepay it, together with
 any Break Costs, and the Maximum Amount shall be reduced by the amount of
 that Drawing.

	
 

	
 

	
 

	
 

	
 

	
8.10

	
Determinations conclusive The Lender shall
 promptly notify the Borrower of the determination of a rate of interest under
 this Clause 8 and each such determination shall (save in the case of manifest
 error) be final and conclusive.

	
 

	
 

	
 

	
 

	
9

	
Indemnities

	
 

	
 

	
 

	
 

	
 

	
9.1

	
Transaction 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:

	
 

	
 

	
 

	
 

	
 

	
 

	
9.1.1

	
the
 negotiation, preparation, printing, execution and registration of the Finance
 Documents (whether or not any Finance Document is actually executed or
 registered and whether or not a Drawing is advanced);

	
 

	
 

	
 

	
 

	
 

	
 

	
9.1.2

	
any amendment,
 addendum or supplement to any Finance Document (whether or not completed);
 and

25

	
 

	
 

	
 

	
 

	
 

	
 

	
9.1.3

	
any other
 document which may at any time be required by the Lender to give effect to
 any Finance Document or which the Lender is entitled to call for or obtain
 under any Finance Document (including, without limitation, all premiums and
 other sums from time to time payable by the Lender in relation to the
 Mortgagee’s Insurances).

	
 

	
 

	
 

	
 

	
 

	
9.2

	
Funding
 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, a Drawing is not advanced to the Borrower
 after the relevant Drawdown Notice has been given to the Lender, or is
 advanced on a date other than that requested in the Drawdown Notice (unless,
 in either case, as a result of any default by the Lender).

	
 

	
 

	
 

	
 

	
 

	
9.3

	
Break
 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 a Drawing (whether pursuant to Clause 7 or otherwise) on a day
 other than the last day of an Interest Period for that Drawing, or any other
 payment under or in relation to the Finance Documents on a day other than the
 due date for payment of the sum in question, including (without limitation)
 any losses or costs incurred in liquidating or re-employing deposits from
 third parties acquired to effect or maintain all or any part of a Drawing,
 and any liabilities, expenses or losses incurred by the Lender in terminating
 or reversing, or otherwise in connection with, any Transaction or any other
 interest rate and/or currency swap, transaction or arrangement entered into
 by the Lender to hedge any exposure arising under this Agreement, or in
 terminating or reversing, or otherwise in connection with, any open position
 arising under this Agreement or the Master Agreement.

	
 

	
 

	
 

	
 

	
 

	
9.4

	
Currency
 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

26

	
 

	
 

	
 

	
 

	
 

	
 

	
Lender such
 further amount in the Currency of Account as is sufficient to satisfy in full
 the amount due and that further amount shall be due to the Lender as a
 separate debt under this Agreement.

	
 

	
 

	
 

	
 

	
 

	
9.5

	
Increased costs (subject to Clause 9.6) If,
 by reason of the introduction of any law, or any change in any law, or any
 change in the interpretation or administration of any law, or compliance with
 any request or requirement from any central bank or any fiscal, monetary or
 other authority occurring after the Signing Date:

	
 

	
 

	
 

	
 

	
 

	
 

	
9.5.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
9.5.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
9.5.3

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

	
 

	
 

	
 

	
 

	
 

	
 

	
9.5.4

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

	
 

	
 

	
 

	
 

	
 

	
 

	
9.5.5

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

	
 

	
 

	
 

	
 

	
 

	
 

	
and the
 result of any of the above shall be to increase the cost to the Lender (or to
 the holding company of the Lender) of the Lender making or maintaining the
 Loan, or its obligations under the Master Agreement to cause the Lender to
 suffer (in its opinion) a material reduction in the rate of return on its
 overall capital below the level which it reasonably anticipated at the
 Signing Date and which it would have been able to achieve but for its
 entering into this Agreement or the Master Agreement and/or performing its
 obligations under this Agreement or the 

27

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Master
 Agreement, then, subject to Clause 9.6, the Lender shall notify the Borrower
 and the Borrower shall from time to time pay to the Lender on demand the
 amount which shall compensate the Lender (or the holding company of the
 Lender) for such additional cost or reduced return. A certificate signed by
 an authorised signatory of the Lender setting out the amount of that payment
 and the basis of its calculation shall be submitted to the Borrower and shall
 be conclusive evidence of such amount save for manifest error or on any
 question of law.

	
 

	
 

	
 

	
 

	
 

	
9.6

	
Exceptions to increased costs Clause 9.5
 does not apply to the extent any additional cost or reduced return referred
 to in that Clause is:

	
 

	
 

	
 

	
 

	
 

	
 

	
9.6.1

	
compensated
 for by a payment made under Clause 9.10; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
9.6.2

	
compensated
 for by a payment made under Clause 17.3; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
9.6.3

	
compensated
 for by the payment of the Mandatory Cost; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
9.6.4

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

	
 

	
 

	
 

	
 

	
 

	
9.7

	
Events of 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.

	
 

	
 

	
 

	
 

	
 

	
9.8

	
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.

28

	
 

	
 

	
 

	
 

	
 

	
9.9

	
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.

	
 

	
 

	
 

	
 

	
 

	
9.10

	
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.

	
 

	
 

	
 

	
 

	
10

	
Fees

	
 

	
 

	
 

	
 

	
 

	
10.1

	
Commitment fee The Borrower shall pay to the
 Lender a fee computed at the rate of zero point twenty per cent (0.20%) per
 annum on the undrawn Maximum Amount from time to time from the Signing Date
 until the Availability Termination Date. The accrued commitment fee is
 payable on the last day of each successive period of three (3) months from
 the Signing Date and on the Availability Termination Date.

	
 

	
 

	
 

	
 

	
 

	
10.2

	
Arrangement fee The Borrower shall pay to
 the Lender on the Signing Date an arrangement fee in the amount of ninety
 thousand Dollars ($90,000).

	
 

	
 

	
 

	
 

	
11

	
Security and Application of Moneys

	
 

	
 

	
 

	
 

	
 

	
11.1

	
Security Documents As security for the
 payment of the Indebtedness, the Borrower shall execute and deliver to the
 Lender or cause to be executed and 

29

	
 

	
 

	
 

	
 

	
 

	
 

	
delivered to
 the Lender the following documents in such forms and containing such terms
 and conditions as the Lender shall require:

	
 

	
 

	
 

	
 

	
 

	
 

	
11.1.1

	
a first
 priority Cypriot statutory mortgage over the Vessel together with a
 collateral deed of covenants;

	
 

	
 

	
 

	
 

	
 

	
 

	
11.1.2

	
a first
 priority deed of assignment of the Insurances, Earnings and Requisition
 Compensation of the Vessel;

	
 

	
 

	
 

	
 

	
 

	
 

	
11.1.3

	
a first
 priority deed of charge over the Accounts and all amounts from time to time
 standing to the credit of them;

	
 

	
 

	
 

	
 

	
 

	
 

	
11.1.4

	
a guarantee
 and indemnity from each Group Guarantor; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
11.1.5

	
a guarantee
 and indemnity from the Corporate Guarantor.

	
 

	
 

	
 

	
 

	
 

	
11.2

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

	
 

	
 

	
 

	
 

	
 

	
11.3

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

	
 

	
 

	
 

	
 

	
 

	
11.4

	
Application of Operating Account The
 Borrower shall procure that there is transferred from the Operating Account
 to the Lender:

	
 

	
 

	
 

	
 

	
 

	
 

	
11.4.1

	
on the due
 date for repayment of each Drawing, the amount of that Drawing; and

	
 

	
 

	
 

	
 

	
 

	
 

	
11.4.2

	
on each
 Interest Payment Date in respect of a Drawing, the amount of interest due in
 respect of that Drawing, 

	
 

	
 

	
 

	
 

	
 

	
 

	
and the
 Borrower irrevocably authorises the Lender to make those transfers.

	
 

	
 

	
 

	
 

	
 

	
11.5

	
Borrower’s obligations not affected If for
 any reason the amount standing to the credit of the Operating Account is
 insufficient to repay any Drawing or to make any payment of interest when
 due, the Borrower’s obligation to repay that Drawing or to make that payment
 of interest shall not be affected. 

30

	
 

	
 

	
 

	
 

	
 

	
11.6

	
Release of surplus Any amount remaining to
 the credit of the Operating Account following the making of any transfer
 required by Clause 11.4 shall (unless a Default shall have occurred and be
 continuing) be released to or to the order of the Borrower, subject to an
 amount of one hundred and fifty thousand Dollars ($150,000) remaining
 credited to the Operating Account at all times during the Facility Period.

	
 

	
 

	
 

	
 

	
 

	
11.7

	
Relocation of Accounts At any time following
 the occurrence and during the continuation of a Default, the Lender may
 without the consent of the Borrower relocate either or both of the Accounts
 to any other branch of the Lender, without prejudice to the continued
 application of this Clause 11 and the rights of the Lender under the Finance
 Documents.

	
 

	
 

	
 

	
 

	
 

	
11.8

	
Application after acceleration From
 and after the giving of notice to the Borrower by the Lender under Clause
 14.2, the Borrower shall procure that all sums from time to time standing to
 the credit of either of the Accounts are immediately transferred to the
 Lender for application in accordance with Clause 11.9 and the Borrower
 irrevocably authorises the Lender to make those transfers. 

	
 

	
 

	
 

	
 

	
 

	
11.9

	
General application of moneys The Borrower,
 subject to Clause 11.10, irrevocably authorises the Lender to apply all sums
 which the Lender may receive:

	
 

	
 

	
 

	
 

	
 

	
 

	
11.9.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
11.9.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
11.9.3

	
by way of
 transfer of any sum from either of the Accounts; or

	
 

	
 

	
 

	
 

	
 

	
 

	
11.9.4

	
otherwise
 arising under or in connection with any Security Document, 

	
 

	
 

	
 

	
 

	
 

	
 

	
in or
 towards satisfaction, or by way of retention on account, of the Indebtedness,
 in such manner as the Lender may determine.

31

	
 

	
 

	
 

	
 

	
 

	
11.10

	
Application of moneys on sale or Total Loss The
 Borrower irrevocably authorises the Lender to apply all sums which the Lender
 may receive pursuant to a sale by the Borrower of the Vessel or a Total Loss
 in or towards satisfaction of the prepayment due and payable by virtue of
 that sale or Total Loss under Clause 7.3, but the Borrower’s obligation to
 make that prepayment shall not be affected if those sums are insufficient to
 satisfy that obligation.

	
 

	
 

	
 

	
 

	
 

	
11.11

	
Determination of market value For the
 purpose of the Security Documents, the market value of the Vessel shall be
 the average value certified by two of the Brokers, who shall report directly
 to the Lender and shall be appointed by the Borrower not later than five (5)
 days after the Lender’s request for the Borrower to appoint such Brokers. In
 the event that the Borrower fails to appoint such Brokers within five (5)
 days after the Lender’s request so to do or if a Broker appointed by the
 Borrower is not approved by the Lender and the Borrower fails to appoint an
 alternative Broker who is approved by the Lender within such five (5) day
 period, the Borrower irrevocably authorises the Lender to appoint a Broker in
 its discretion to conduct such valuations. All valuations pursuant to this
 Clause shall be made on the basis of a sale of the Vessel for prompt delivery
 for cash at arm’s length on normal commercial terms by a willing seller to a
 willing buyer and free of any existing charter or other contract of
 employment. The Borrower agrees to accept each valuation obtained pursuant to
 this Clause as conclusive evidence of the Vessel’s market value at the date
 of such valuation.

	
 

	
 

	
 

	
 

	
 

	
11.12

	
Cost of valuation The Borrower shall be
 liable for all costs and expenses incurred by the Lender in obtaining up to
 two valuations in each year of the Facility Period, such valuations to be
 provided by the Borrower semi-annually and annually throughout the Facility
 Period at a time which shall coincide with the provision of the Compliance
 Certificate in accordance with Clause 13.1.3 and 13.1.2 (the first such
 valuation to be provided within six (6) months after the Signing Date) unless
 there is an Event of Default in which case the Borrower shall be liable for
 all costs and expenses incurred by the Lender in obtaining any 

32

	
 

	
 

	
 

	
 

	
 

	
 

	
number of
 valuations required by it pursuant to Clause 11.11 and shall reimburse the
 Lender in respect of all such costs and expenses on demand.

	
 

	
 

	
 

	
 

	
 

	
11.13

	
Provision of information The Borrower
 undertakes promptly to supply the Lender with such information concerning the
 Vessel’s condition, location and employment as the Lender may reasonably
 require.

	
 

	
 

	
 

	
 

	
 

	
11.14

	
Additional security If and so often as the aggregate of the market value of the Vessel
(determined in accordance with Clause 11.11) plus the value of any additional
security for the time being provided to the Lender pursuant to this Clause
shall be less than (a) one hundred per cent (100%) of the amount of the Loan,
for the period commencing on the first Drawdown Date and ending on the third
anniversary of the first Drawdown Date or (b) one hundred and ten per cent
(110%) of the amount of the Loan from the third anniversary of the first
Drawdown Date until the sixth anniversary of the first Drawdown Date or (c)
one hundred and twenty per cent (120%) of the amount of the Loan thereafter,
the Borrower will, within fourteen (14) days of the request of the Lender to
do so, at the Borrower’s option:- 

	
 

	
 

	
 

	
 

	
 

	
11.14.1

	
pay to the
 credit of the Cash Collateral Account such amount as shall be necessary to
 establish that the aggregate of the market value of the Vessel (determined in
 accordance with Clause 11.11) plus the value of any additional security for
 the time being provided to the Lender pursuant to this Clause shall be no less
 than (a) one hundred per cent (100%) of the amount of the Loan, for the
 period commencing on the first Drawdown Date and ending on the third
 anniversary of the first Drawdown Date, or (b) one hundred and ten per cent
 (110%) of the amount of the Loan from the third anniversary of the first
 Drawdown Date until the sixth anniversary of the first Drawdown Date or (c)
 one hundred and twenty per cent (120%) of the amount of the Loan thereafter;
 or

33

	
 

	
 

	
 

	
 

	
 

	
 

	
11.14.2

	
give to the
 Lender other security in amount and form acceptable to the Lender in its
 discretion; or

	
 

	
 

	
 

	
 

	
 

	
 

	
11.14.3

	
repay such
 amount of the Loan as shall be necessary to establish that the aggregate of
 the market value of the Vessel (determined in accordance with Clause 11.11)
 plus the value of any additional security for the time being provided to the
 Lender pursuant to this Clause shall be no less than (a) one hundred per cent
 (100%) of the amount of the Loan, for the period commencing on the first
 Drawdown Date and ending on the third anniversary of the first Drawdown Date,
 or (b) one hundred and ten per cent (110%) of the amount of the Loan from the
 third anniversary of the first Drawdown Date until the sixth anniversary of
 the first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter. 

	
 

	
 

	
 

	
 

	
 

	
 

	
Clauses 7.2,
 7.3 and 7.4 shall apply, mutatis mutandis, to any repayment made pursuant to
 this Clause and the value of any additional security provided pursuant to
 this Clause shall be determined by the Lender in its discretion.

	
 

	
 

	
 

	
 

	
 

	
11.15

	
Return of
 additional security If and so often as the aggregate of the
 market value of the Vessel (determined in accordance with Clause 11.11) plus
 the value of any additional security for the time being provided to the Lender
 pursuant to Clause 11.14 shall exceed (a) one hundred per cent (100%) of the
 amount of the Loan, for the period commencing on the first Drawdown Date and
 ending on the third anniversary of the first Drawdown Date, or (b) one
 hundred and ten per cent (110%) of the amount of the Loan from the third
 anniversary of the first Drawdown Date until the sixth anniversary of the
 first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter, then the Lender shall, within fourteen (14)
 days of the request of the Borrower to do so, release to the Borrower such
 portion of the amount standing to the credit of the Cash Collateral Account
 in accordance with Clause 11.14 and/or such amount of the security referred
 to in Clause 11.14.2 as shall be required to ensure that the aggregate of the
 market value of the Vessel (determined as aforesaid) plus the 

34

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
value of any
 additional security for the time being provided to the Lender pursuant to
 Clause 11.14 is equal to, but not less than (a) one hundred per cent (100%)
 of the amount of the Loan, for the period commencing on the first Drawdown
 Date and ending on the third anniversary of the first Drawdown Date, or (b)
 one hundred and ten per cent (I 10%) of the amount of the Loan from the third
 anniversary of the first Drawdown Date until the sixth anniversary of the
 first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
 amount of the Loan thereafter.

	
 

	
 

	
 

	
 

	
12

	
Representations

	
 

	
 

	
 

	
 

	
 

	
12.1

	
Representations The Borrower makes the
 representations and warranties set out in this Clause 12.1 to the Lender on
 the Signing Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.2

	
Binding 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.3

	
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.

35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.4

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.5

	
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,

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
have been
 obtained or effected and are in full force and effect, with the exception
 only of the registrations referred to in Part II of Schedule 1.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.6

	
Governing law and 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.7

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.8

	
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

36

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
authority in
 that jurisdiction or that any stamp, registration or similar tax be paid on
 or in relation to the Finance Documents or the transactions contemplated by
 the Finance Documents.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.9

	
No default No Event of Default is continuing
 or might reasonably be expected to result from the advance of a Drawing.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.10

	
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 is was provided.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.11

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.12

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.13

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.14

	
No established place of business in the UK or US No
 Security Party, other than the Corporate Guarantor, has an established place
 of business in the United Kingdom or the United States of America.

	
 

	
 

	
 

	
 

	
 

	
 

	
12.1.15

	
Completeness of Relevant Documents The copies
 of any Relevant Documents provided or to be provided by the Borrower to the
 Lender in 

37

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
12.2

	
Repetition
 Each representation and warranty in Clause 12.1 is deemed
 to be repeated by the Borrower by reference to the facts and circumstances
 then existing on the date of each Drawdown Notice and the first day of each
 Interest Period.

	
 

	
 

	
 

	
 

	
13

	
Undertakings and Covenants

	
 

	
 

	
 

	
 

	
 

	
The
 undertakings and covenants in this Clause 13 remain in force for the duration
 of the Facility Period.

	
 

	
 

	
 

	
 

	
 

	
13.1

	
Information Undertakings

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.1

	
Financial
 statements The Borrower shall procure that the Corporate
 Guarantor supplies to the Lender as soon as the same become available, but in
 any event within one hundred and eighty (180) days after the end of each of
 its financial years, its audited consolidated financial statements for that
 financial year, together with a Compliance Certificate, signed by two
 directors of the Corporate Guarantor, setting out (in reasonable detail)
 computations as to compliance with Clause 13.2.21 as at the date at which
 those financial statements were drawn up.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.2

	
Interim
 financial statements The Borrower shall procure that the
 Corporate Guarantor supplies to the Lender as soon as the same become
 available, but in any event within ninety (90) days after the end of each
 quarter during each of the Corporate Guarantor’s financial years, its

38

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
unaudited
 consolidated quarterly financial statements for that quarter, together with a
 Compliance Certificate to be provided on a semi-annual basis, signed by two
 directors of the Corporate Guarantor, setting out (in reasonable detail)
 computations as to compliance with Clause 13.2.21 as at the date at which
 those financial statements were drawn up.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.3

	
Management
 accounts The Borrower or the Managers will supply to the
 Lender, on the earlier of (a) the Lender’s first request and (b) within sixty
 (60) days of the end of each calendar year during the Facility Period the
 unaudited management accounts for the Vessel prepared by the Managers showing
 the income and expenditure for the Vessel for such calendar year.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.4

	
Requirements as to financial statements Each
 set of financial statements delivered by the Corporate Guarantor under
 Clauses 13.1.1 and 13.1.2 shall be:-

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
prepared
 using GAAP; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
certified by
 a director of the Corporate Guarantor as fairly representing its financial
 condition as at the date at which those financial statements were drawn up.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.5

	
Information:
 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
 other than any documents that are subject to any confidentiality restrictions
 pursuant to the New York Stock Exchange regulations that may prohibit such
 dissemination;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
promptly
 upon becoming aware of them, details of any litigation, arbitration or
 administrative proceedings which are current, threatened or pending against
 any Security Party, and which might, if adversely determined, have a
 materially adverse effect 

39

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
on the
 business, assets, financial condition or credit worthiness of that Security
 Party; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
promptly,
 such further information regarding the financial condition, business and
 operations of any Security Party as the Lender may reasonably request. 

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.6

	
Notification of default

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
13.1.7

	
“Know your customer” checks If:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the
 introduction of or any change in (or in the interpretation, administration or
 application of) any law or regulation made after the Signing Date;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
any change
 in the status of the Borrower after the Signing Date; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
a proposed
 assignment or transfer by the Lender of any of its rights and obligations
 under this Agreement,

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
obliges the
 Lender (or, in the case of (c) above, any prospective new Lender) to comply
 with “know your customer” or similar identification procedures in
 circumstances where the necessary information is not already available to it,
 the Borrower shall promptly upon the request of the Lender supply, or procure
 the supply of, such documentation and other 

40

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence as
 is reasonably requested by the Lender for itself (or, in the case of (c)
 above, on behalf of any prospective new Lender) in order for the Lender (or,
 in the case of (c) above, any prospective new Lender) to carry out and
 be satisfied it has complied with all necessary “know your customer” or other
 similar checks under all applicable laws and regulations pursuant to the
 transactions contemplated in the Finance Documents.

	
 

	
 

	
 

	
 

	
 

	
13.2

	
General undertakings

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.1

	
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,

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
any consent,
 licence, approval or authorisation required under any law or regulation to
 enable each Security Party to perform its obligations under the Finance
 Documents to which it is a party and to ensure the legality, validity,
 enforceability or admissibility in evidence in the jurisdiction of
 incorporation of each relevant Security Party of any Finance Document.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.2

	
Compliance with 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.3

	
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).

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.4

	
Evidence of good standing The Borrower will
 from time to time if requested by the Lender provide the Lender with evidence
 in form and

41

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
substance
 satisfactory to the Lender that the Security Parties and all corporate
 shareholders of any Security Party remain in good standing.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.5

	
Liquidity The Borrower will throughout the
 Facility Period maintain in the Operating Account at all times a minimum
 positive account balance free of any Encumbrances (other than in favour of
 the Lender) of not less than one hundred and fifty thousand Dollars
 ($150,000). Any undrawn amounts under this Agreement may be included for the
 purpose of this calculation and this calculation shall exclude cash deposited
 with the Lender as security for any other facility or in connection with
 Clause 5.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.6

	
Negative pledge and no disposals The
 Borrower shall not create nor permit to subsist any Encumbrance, other than
 in favour of the Lender, or other third party right, other than in favour of
 the Lender, on or over all or any part of its present or future assets or
 undertaking nor dispose of any those assets or of all or part of that
 undertaking.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.7

	
Merger The Borrower shall not without the
 prior written consent of the Lender enter into any amalgamation, demerger,
 merger or corporate reconstruction from the Signing Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.8

	
Change of business The Borrower shall not
 without the prior written consent of the Lender make any substantial change
 to the general nature of its business from that carried on at the Signing
 Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.9

	
No other business The Borrower shall not
 without the prior written consent of the Lender engage in any business other
 than the ownership, operation, chartering and management of the Vessel.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.10

	
No place of business in UK or 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.11

	
No borrowings The Borrower shall not without
 the prior written consent of the Lender borrow any money (except for the Loan
 and 

42

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
unsecured
 Financial Indebtedness subordinated to the Loan) nor incur any obligations
 under leases.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.12

	
No substantial liabilities Except in the
 ordinary course of business and other than in favour of the Lender, the
 Borrower shall not without the prior written consent of the Lender incur any
 liability to any third party which is in the Lender’s opinion of a
 substantial nature.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.13

	
No loans or other financial commitments The
 Borrower shall not without the prior written consent of the Lender make any
 loan (other than any part the Loan to be used for the purposes set out in
 Recital (B)) nor enter into any guarantee or indemnity (other than the
 Eniaprohi Guarantees, other than any guarantee or indemnity from time to time
 required by any insurer and which is in accordance with the terms and
 conditions of clause 5 of the Deed of Covenants, the Insurances and any
 acceptable Insurance letter of undertaking) or otherwise voluntarily assume
 any actual or contingent liability in respect of any obligation of any other
 person.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.14

	
Inspection of records The Borrower will
 permit the inspection of its financial records and accounts and procure that
 the Corporate Guarantor permits the inspection of the Corporate Guarantor’s
 financial records and accounts from time to time by the Lender or its
 nominee.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.15

	
No change in Relevant Documents The Borrower
 shall procure that, without the prior written consent of the Lender, there
 shall be no termination of, alteration to, or waiver of any term of, any of
 the Relevant Documents.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.16

	
No change in ownership or control of the Borrower or the Managers The
 Borrower shall not cease to be a wholly owned Subsidiary of the Corporate
 Guarantor and shall not permit any change in the beneficial ownership and
 control of the Managers from that advised to the Lender on the Signing Date.

43

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.17

	
No purchase of a vessel The Borrower shall
 not purchase any vessel or any shares in any vessel.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.18

	
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, nor enter into
 any interest rate exchange or hedging agreement with anyone other than the
 Lender.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.19

	
Charters The Borrower shall inform the
 Lender in respect of its entry into any charter or other contract of
 employment in respect of the Vessel (other than the Charters) and of any
 extensions, increases or decreases in
 charter hire or other material amendments to a Charter or any other charter
 or other contract of employment.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.20

	
Ownership The Borrower shall procure that
 the Corporate Guarantor shall remain directly or indirectly beneficially
 owned by its Current Shareholders or any of them at a minimum of fifty one
 per cent (51%).

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.21

	
Financial covenants The Borrower shall
 procure that the Corporate Guarantor shall on a consolidated basis comply
 with the following financial covenants to be assessed on a semi-annual basis
 based on the basis of the Accounting Information received by the Lender in
 accordance with Clauses 13.1.1 and 13.1.2:-

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Consolidated Group Leverage The Consolidated
 Group Leverage shall be equal to or less than seventy per cent (70%).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Debt to EBITDA ratio The ratio of Debt to
 EBITDA on a trailing twelve (12) month’s basis shall not at any time exceed
 5.5:1.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Net Worth The Net Worth shall not at any
 time be less than one hundred and seventy five million Dollars
 ($175,000,000).

44

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3

	
Vessel undertakings

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.1

	
No sale of 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.2

	
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).

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.3

	
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, or waiver of any term of, the Management
 Agreement and the Borrower shall not without the prior written consent of the
 Lender permit the Managers to sub-contract or delegate the commercial or
 technical management of the Vessel to any third party.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.4

	
Registration of Vessel The Borrower
 undertakes to maintain the registration of the Vessel under the flag stated
 in Recital (A) (or such other flag acceptable to the Lender in its
 discretion) for the duration of the Facility Period unless the Lender agrees
 otherwise in writing.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.5

	
Evidence of current 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, retain and provide the Lender with a copy of, a valid
 Certificate of Financial Responsibility for the Vessel under that Act and
 will comply strictly with the requirements of that Act.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.6

	
ISM Code compliance The Borrower will:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
procure that
 the Vessel remains for the duration of the Facility Period subject to a SMS; 

45

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
maintain a
 valid and current SMC for the Vessel throughout the Facility Period and
 provide a copy to the Lender;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
procure that
 the ISM Company maintains a valid and current DOC throughout the Facility
 Period and provide a copy to the Lender; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.7

	
ISPS Code 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 provide a copy to the Lender; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
immediately
 notify the Lender in writing of any actual or threatened withdrawal,
 suspension, cancellation or modification of the ISSC.

	
 

	
 

	
 

	
 

	
 

	
 

	
13.3.8

	
Annex VI compliance The Borrower will:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
for the
 duration of the Facility Period comply with Annex VI in relation to the
 Vessel and procure that the Vessel’s master and crew are familiar with, and
 that the Vessel complies with, Annex VI;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
maintain a
 valid and current IAPPC for the Vessel throughout the Facility Period and
 provide a copy to the Lender; and

46

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
immediately
 notify the Lender in writing of any actual or threatened withdrawal,
 suspension, cancellation or modification of the IAPPC.

	
 

	
 

	
 

	
 

	
14

	
Events of Default

	
 

	
 

	
 

	
 

	
 

	
14.1

	
Events of Default Each of the events or
 circumstances set out in this Clause 14.1 is an Event of Default.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.1

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.2

	
Other obligations A Security Party or any
 other person (except the Lender) does not comply with any provision of any of
 the Relevant Documents to which that Security Party or person is a party
 (other than as referred to in Clause 14.1.1).

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.3

	
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.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.4

	
Cross default Any Financial Indebtedness of
 a Security Party:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
is not paid
 when due or within any originally applicable grace period; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
is declared
 by a creditor to be due and payable before its specified maturity as a result
 of such an event.

47

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.5

	
Insolvency

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
The value of
 the assets of a Security Party is less than its liabilities (taking into
 account contingent and prospective liabilities).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
A moratorium
 is declared in respect of any Financial Indebtedness of a Security Party.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.6

	
Insolvency 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;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
a
 composition, compromise, assignment or arrangement with any creditor of a
 Security Party;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the
 appointment of a liquidator, receiver, administrative receiver,
 administrator, compulsory manager, or trustee or other similar officer in
 respect of any Security Party or any of its assets; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
enforcement
 of any Encumbrance over any assets of a Security Party,

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

48

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.7

	
Creditors’
 process Any expropriation, attachment, sequestration,
 distress or execution affects any asset or assets of a Security Party.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.8

	
Change in
 ownership or control of the Borrower or the Managers The
 Borrower ceases to be a wholly owned Subsidiary of the Corporate Guarantor or
 there is any change in the beneficial ownership or control of the Borrower or
 the Managers from that advised to the Lender by the Borrower on the Signing
 Date.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.9

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

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.10

	
Impossibility
 or 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.11

	
Conditions subsequent Any of the conditions referred to in Clause 3.5
 is not satisfied within the time reasonably required by the Lender.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.12

	
Revocation
 or modification of authorization 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.13

	
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 

49

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
a Security
 Party is wholly or partially curtailed or suspended, or all or a substantial
 part of the assets or undertaking of a Security Party is seized,
 nationalised, expropriated or compulsorily acquired.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.14

	
Reduction of capital A Security Party (other
 than the Corporate Guarantor) reduces its authorised or issued or subscribed
 capital.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.15

	
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 eighty (180) days of the occurrence of the
 casualty giving rise to the Total Loss in question or such longer period as
 the Lender may in its discretion agree.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.16

	
Challenge to 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.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.17

	
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 

50

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
and the
 Lender in its discretion considers that, as a result, the security conferred
 by the Security Documents is materially prejudiced.

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.18

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

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.19

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

	
 

	
 

	
 

	
 

	
 

	
 

	
14.1.20

	
Notice of termination Any of the Guarantors gives
 notice to the Lender to determine its obligations under the relevant
 Guarantee.

	
 

	
 

	
 

	
 

	
 

	
14.2

	
Acceleration If an Event of Default is
 continuing the Lender may by notice to the Borrower cancel any part of the
 Maximum Amount not then advanced and:

	
 

	
 

	
 

	
 

	
 

	
14.2.1

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

	
 

	
 

	
 

	
 

	
 

	
 

	
14.2.2

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

	
 

	
 

	
 

	
 

	
15

	
Assignment and Sub-Participation

	
 

	
 

	
 

	
 

	
 

	
15.1

	
Right to assign The Lender may, subject to
 the prior approval of the Borrower (such approval not to be unreasonably
 withheld) and subject to the Lender giving prior notice of such intention to
 the Borrower, and without additional costs to the Borrower, assign or
 transfer all or any of its rights under or pursuant to the

51

	
 

	
 

	
 

	
 

	
 

	
 

	
 Security Documents
 to any other bank or financial institution, and may grant sub-participations
 in all or any part of the Loan. The Lender may, without the prior approval of
 the Borrower, assign or transfer all or any of its rights under or pursuant
 to the Security
 Documents to any other branch of the Lender, and may grant sub-participations
 in all or any part of the Loan.

	
 

	
 

	
 

	
 

	
 

	
15.2

	
Borrower’s co-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.

	
 

	
 

	
 

	
 

	
 

	
15.3

	
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.

	
 

	
 

	
 

	
 

	
 

	
15.4

	
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.

	
 

	
 

	
 

	
 

	
16

	
Set-Off

	
 

	
 

	
 

	
 

	
 

	
16.1

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

52

	
 

	
 

	
 

	
 

	
 

	
16.2

	
Master Agreement rights The rights conferred
 on the Lender by this Clause 16 shall be in addition to, and without
 prejudice to or limitation of, the rights of netting and set off conferred on
 the Lender by the Master Agreement.

	
 

	
 

	
 

	
 

	
17

	
Payments

	
 

	
 

	
 

	
 

	
 

	
17.1

	
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.

	
 

	
 

	
 

	
 

	
 

	
17.2

	
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 17.3, be made free and
 clear of and without deduction for or on account of any Taxes or other
 deductions, withholdings, restrictions, conditions or counterclaims of any
 nature.

	
 

	
 

	
 

	
 

	
 

	
17.3

	
Grossing-up If at any time any law requires
 the Borrower to make any deduction or withholding from any payment, or to
 change the rate or manner in which any required deduction or withholding is
 made, the Borrower will promptly notify the Lender and, simultaneously with
 making that payment, will pay to the Lender whatever additional amount (after
 taking into account any additional Taxes on, or deductions or withholdings
 from, or restrictions or conditions on, that additional amount) is necessary
 to ensure that, after making the deduction or withholding, 

53

	
 

	
 

	
 

	
 

	
 

	
 

	
the Lender
 receives a net sum equal to the sum which the Lender would have received had
 no deduction or withholding been made.

	
 

	
 

	
 

	
 

	
 

	
17.4

	
Evidence of 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.

	
 

	
 

	
 

	
 

	
 

	
17.5

	
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 a Drawing, or a payment under the Master Agreement, shall be due
 on a day which is not a Business Day, that payment shall be made on the next
 succeeding Business Day (unless the next succeeding Business Day falls in the
 next calendar month in which event the payment shall be made on the next
 preceding Business Day). Any such variation of time shall be taken into
 account in computing any interest in respect of that payment.

	
 

	
 

	
 

	
 

	
 

	
17.6

	
Control Account The Lender shall open and
 maintain on its books a control account in the name of the Borrower showing
 the advance of the Loan and the computation and payment of interest and all
 other sums due under this Agreement and the Master Agreement. The Borrower’s
 obligations to repay the Loan and to pay interest and all other sums due
 under this Agreement and the Master Agreement shall be evidenced by the
 entries from time to time made in the control account opened and maintained under
 this Clause 17.6 and those entries will, in the absence of manifest error, be
 conclusive and binding.

54

	
 

	
 

	
 

	
 

	
18

	
Notices

	
 

	
 

	
 

	
 

	
 

	
18.1

	
Communications in 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.

	
 

	
 

	
 

	
 

	
 

	
18.2

	
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:

	
 

	
 

	
 

	
 

	
 

	
 

	
18.2.1

	
in the case
 of the Borrower, c/o Safety Management Overseas S.A., 32 Avenue Karamanli,
 GR-166 05 Voula, Athens, Greece (telex no: 215050 answerback: SAFE GR, fax
 no: +30 210 895 6900) marked for the attention of Mr Konstantinos
 Adamopoulos; and

	
 

	
 

	
 

	
 

	
 

	
 

	
18.2.2

	
in the case
 of the Lender, to the Lender at its address at the head of this Agreement
 (fax no: +44 207 626 5956 tel no: +44 207 621 6045) marked for the attention
 of: Shipping Department;

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
18.3

	
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:

	
 

	
 

	
 

	
 

	
 

	
 

	
18.3.1

	
if by way of
 fax, when received in legible form; or

	
 

	
 

	
 

	
 

	
 

	
 

	
18.3.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
and, if a
 particular department or officer is specified as part of its address details
 provided under Clause 18.2, if addressed to that department or officer.

55

	
 

	
 

	
 

	
 

	
 

	
 

	
Any
 communication or document to be made or delivered to the Lender will be
 effective only when actually received by the Lender.

	
 

	
 

	
 

	
 

	
 

	
18.4

	
English 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:

	
 

	
 

	
 

	
 

	
 

	
 

	
18.4.1

	
in English;
 or

	
 

	
 

	
 

	
 

	
 

	
 

	
18.4.2

	
if not in
 English, and if so required by the Lender, accompanied by a certified English
 translation and, in this case, the English translation will prevail unless
 the document is a constitutional, statutory or other official document.

	
 

	
 

	
 

	
 

	
19

	
Partial Invalidity

	
 

	
 

	
 

	
 

	
 

	
If, at any
 time, any provision of a Finance Document is or becomes illegal, invalid or
 unenforceable in any respect under any law of any jurisdiction, neither the
 legality, validity or enforceability of the remaining provisions nor the
 legality, validity or enforceability of such provision under the law of any
 other jurisdiction will in any way be affected or impaired.

	
 

	
 

	
 

	
 

	
20

	
Remedies and Waivers

	
 

	
 

	
 

	
 

	
 

	
No failure
 to exercise, nor any delay in exercising, on the part of the Lender, any
 right or remedy under a Finance Document shall operate as a waiver, nor shall
 any single or partial exercise of any right or remedy prevent any further or
 other exercise or the exercise of any other right or remedy. The rights and
 remedies provided in this Agreement are cumulative and not exclusive of any
 rights or remedies provided by law.

	
 

	
 

	
 

	
 

	
21

	
Miscellaneous

	
 

	
 

	
 

	
 

	
 

	
21.1

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

56

	
 

	
 

	
 

	
 

	
 

	
21.2

	
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.

	
 

	
 

	
 

	
 

	
 

	
21.3

	
Rescission
 of payments etc. Any
 discharge, release or reassignment by the Lender of any of the security
 constituted by, or any of the obligations of a Security Party contained in, a
 Finance Document shall be (and be deemed always to have been) void if any act
 (including, without limitation, any payment) as a result of which such
 discharge, release or reassignment was given or made is subsequently wholly
 or partially rescinded or avoided by operation of any law.

	
 

	
 

	
 

	
 

	
 

	
21.4

	
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.

	
 

	
 

	
 

	
 

	
 

	
21.5

	
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.

	
 

	
 

	
 

	
 

	
 

	
21.6

	
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.

	
 

	
 

	
 

	
 

	
22

	
Law and Jurisdiction

	
 

	
 

	
 

	
 

	
 

	
22.1

	
Governing law This Agreement shall in all
 respects be governed by and interpreted in accordance with English law.

57

	
 

	
 

	
 

	
 

	
 

	
22.2

	
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 disputes which may arise
 out of or in connection with this Agreement and that any proceedings may be
 brought in those courts.

	
 

	
 

	
 

	
 

	
 

	
22.3

	
Alternative jurisdictions Nothing contained
 in this Clause 22 shall limit the right of the Lender to commence any
 proceedings against the Borrower in any other court of competent jurisdiction
 nor shall the commencement of any proceedings against the Borrower in one or
 more jurisdictions preclude the commencement of any proceedings in any other
 jurisdiction, whether concurrently or not.

	
 

	
 

	
 

	
 

	
 

	
22.4

	
Waiver of 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 22, and any claim that those proceedings have been brought in an
 inconvenient or inappropriate forum, and irrevocably agrees that a judgment
 in any proceedings commenced in any such court shall be conclusive and
 binding on it and may be enforced in the courts of any other jurisdiction.

	
 

	
 

	
 

	
 

	
22.5

	
Service of process Without prejudice to any
 other mode of service allowed under any relevant law, the Borrower:

	
 

	
 

	
 

	
 

	
 

	
 

	
22.5.1

	
irrevocably
 appoints Mr. Savvas Savvides, 24 Exeter Road, London N14 5JY, England
 (tel/fax: +44 208 361 2606) as its agent for service of process in relation
 to any proceedings before connection with this Agreement; and

	
 

	
 

	
 

	
 

	
 

	
 

	
22.5.2

	
agrees that
 failure by a process agent to notify the will not invalidate the proceedings
 concerned.

58

SCHEDULE 1: Conditions Precedent and
Subsequent

Part I: Conditions precedent

	
 

	
 

	
 

	
 

	
1

	
Security Parties

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Constitutional Documents Copies of the
 constitutional documents of each Security Party together with such other
 evidence as the Lender may reasonably require that each Security Party is
 duly incorporated in its country of incorporation and remains in existence
 with power to enter into, and perform its obligations under, the Relevant
 Documents to which it is or is to become a party.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Certificates of good standing A certificate
 of good standing in respect of each Security Party (if such a certificate can
 be obtained).

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Board resolutions A copy of a resolution of
 the board of directors of each Security Party:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
approving
 the terms of, and the transactions contemplated by, the Relevant Documents to
 which it is a party and resolving that it execute those Relevant Documents;
 and

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
authorising
 a specified person or persons to execute those Relevant Documents (and all
 documents and notices to be signed and/or despatched under those documents)
 on its behalf.

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Officer’s certificates A certificate of a
 duly authorised officer of each Security Party certifying that each copy
 document relating to it specified in this Part I of Schedule 1 is correct,
 complete and in full force and effect as at a date no earlier than the
 Signing Date and setting out the names of the directors and officers of that
 Security Party.

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Powers of attorney The notarially attested
 and legalised power of attorney of each Security Party under which any
 documents are to be executed or transactions undertaken by that Security
 Party.

59

	
 

	
 

	
 

	
 

	
2

	
Security and related documents

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Vessel documents Photocopies, certified as
 true by a director or the secretary or the duly authorised attorney of the
 Borrower, of:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
the
 Management Agreement;

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
the Vessel’s
 current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution
 Prevention and Load Line Certificates;

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
the Vessel’s
 current Certificate of Financial Responsibility issued pursuant to the United
 States Oil Pollution Act 1990 (if required for the Vessel);

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
the Vessel’s
 current SMC;

	
 

	
 

	
 

	
 

	
 

	
 

	
(v)

	
the ISM Company’s
 current DOC;

	
 

	
 

	
 

	
 

	
 

	
 

	
(vi)

	
the Vessel’s
 current ISSC;

	
 

	
 

	
 

	
 

	
 

	
 

	
(vii)

	
the Vessel’s
 current IAPPC;

	
 

	
 

	
 

	
 

	
 

	
 

	
(viii)

	
the Vessel’s
 current Tonnage Certificate; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(ix)

	
the Existing
 Charter,

	
 

	
 

	
 

	
 

	
 

	
 

	
in each case
 together with all addenda, amendments or supplements.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Evidence of Borrower’s title Evidence that
 on the Drawdown Date (i) the Vessel will be at least provisionally registered
 under the flag stated in Recital (A) in the ownership of the Borrower and
 (ii) the Mortgage will be capable of being registered against the Vessel with
 first priority.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Evidence of insurance Evidence that the
 Vessel is insured in the manner required by the Security Documents and that
 letters of undertaking will be issued in the manner required by the Security
 Documents, together with (if required by the Lender) the written approval of
 the Insurances by an insurance adviser appointed by the Lender.

60

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Confirmation of class A Certificate of
 Confirmation of Class for hull and machinery confirming that the Vessel is
 classed +100A14+LMC with Lloyd’s Register of Shipping or such other
 classification society as may be acceptable to the Lender in its absolute
 discretion free of recommendations affecting class.

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Security Documents The Security Documents,
 together with all other documents required by any of them, including, without
 limitation, all notices of assignment and/or charge and evidence that those
 notices will be duly acknowledged by the recipients.

	
 

	
 

	
 

	
 

	
 

	
(f)

	
Side Letter The side letter evidencing the
 Current Shareholders of the Corporate Guarantor issued by the Corporate
 Guarantor in favour of the Lender in such form as the Lender may require.

	
 

	
 

	
 

	
 

	
 

	
(g)

	
Mandates Such duly signed forms of mandate,
 and/or other evidence of the opening of the Accounts, as the Lender may
 require.

	
 

	
 

	
 

	
 

	
 

	
(h)

	
Managers confirmation The written
 confirmation of the Managers that, throughout the Facility Period unless
 otherwise agreed by the Lender, they will remain the commercial and technical
 managers of the Vessel and that they will not, without the prior written
 consent of the Lender, sub-contract or delegate the commercial or technical
 management of the Vessel to any third party and confirming in terms
 acceptable to the Lender that, following the occurrence of an Event of
 Default, all claims of the Managers against the Borrower shall be
 subordinated to the claims of the Lender under the Finance Documents.

	
 

	
 

	
 

	
 

	
 

	
(i)

	
No disputes The written confirmation of the
 Borrower that there is no dispute under any of the Relevant Documents as
 between the parties to any such document.

	
 

	
 

	
 

	
 

	
3

	
Legal opinions

	
 

	
 

	
 

	
 

	
 

	
(a)

	
If a
 Security Party is incorporated in a jurisdiction other than England and Wales
 or if any Finance Document is governed by the laws of a jurisdiction other
 than

61

	
 

	
 

	
 

	
 

	
 

	
 

	
England and
 Wales, a legal opinion of the legal advisers to the Lender in each relevant
 jurisdiction, substantially in the form or forms provided to the Lender prior
 to the Signing Date or confirmation satisfactory to the Lender that such an
 opinion will be given.

	
 

	
 

	
 

	
 

	
4

	
Other documents and evidence

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Drawdown Notice A duly completed Drawdown
 Notice.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Process agent Evidence that any process
 agent referred to in Clause 22.5 and any process agent appointed under any
 other Finance Document has accepted its appointment.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Other authorisations A copy of any other
 consent, licence, approval, authorisation or other document, opinion or
 assurance which the Lender considers to be necessary or desirable (if it has notified
 the Borrower accordingly) in connection with the entry into and performance
 of the transactions contemplated by any of the Relevant Documents or for the
 validity and enforceability of any of the Relevant Documents.

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Fees Evidence that the fees, costs and
 expenses then due from the Borrower under Clause 9 and Clause 10 have been
 paid or will be paid by the Drawdown Date.

	
 

	
 

	
 

	
 

	
 

	
(e)

	
“Know your customer” documents Such
 documentation and other evidence as is reasonably requested by the Lender in
 order for the Lender to comply with all necessary “know your customer” or
 similar identification procedures in relation to the transactions
 contemplated in the Finance Documents.

62

Part II: Conditions subsequent

	
 

	
 

	
1.

	
Evidence of Borrower’s title Certificate of
 ownership and encumbrance (or equivalent) issued by the Registrar of Ships
 (or equivalent official) of the flag stated in Recital (A) confirming that
 (a) the Vessel is permanently registered under that flag in the ownership of
 the Borrower, (b) the Mortgage has been registered with first priority
 against the Vessel and (c) there are no further Encumbrances registered
 against the Vessel.

	
 

	
 

	
2

	
Letters of undertaking Letters of
 undertaking in respect of the Insurances as required by the Security
 Documents together with copies of the relevant policies or cover notes or
 entry certificates duly endorsed with the interest of the Lender.

	
 

	
 

	
3

	
Acknowledgements of notices Acknowledgements
 of all notices of assignment and/or charge given pursuant to the Security
 Documents.

	
 

	
 

	
4

	
Legal opinions Such of the legal opinions
 specified in Part I of this Schedule 1 as have not already been provided to
 the Lender.

	
 

	
 

	
5

	
Companies Act registrations Evidence that
 the prescribed particulars of the Security Documents have been delivered to
 the Registrar of Companies of Cyprus within the statutory time limit.

	
 

	
 

	
6

	
Mortgagee’s Insurance Fees Payment to the
 Lender of all fees in relation to inspections, valuations, legal fees and
 premiums for Mortgagee’s Insurances.

63

SCHEDULE 2: Calculation of Mandatory Cost

	
 

	
 

	
 

	
1

	
The
 Mandatory Cost is an addition to the interest rate to compensate the Lender
 for the cost of compliance with (a) the requirements of the Bank of England
 and/or the Financial Services Authority (or, in either case, any other
 authority which replaces all or any of its functions) or (b) the requirements
 of the European Central Bank.

	
 

	
 

	
 

	
(a)

	
On the first
 day of each Interest Period (or as soon as possible thereafter) the Lender
 shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) in accordance with
 the paragraphs set out below.

	
 

	
 

	
 

	
 

	
(b)

	
The
 Additional Cost Rate for the Lender if lending from an office in the
 euro-zone will be the percentage notified by the Lender to the Borrower to be
 its reasonable determination of the cost (expressed as a percentage of the
 Loan) of complying with the minimum reserve requirements of the European
 Central Bank as a result of making the Loan from that office.

	
 

	
 

	
 

	
 

	
(c)

	
The
 Additional Cost Rate for the Lender if lending from an office in the United
 Kingdom will be calculated by the Lender as follows:

	
 

	
 

	
 

	
 

	
(d)

	
where the
 Loan is denominated in sterling:

	
 

	
 

	
 

	
 

	
 

	
BY + S(Y -
 Z) + F x 0.01 per cent per annum

           100 - (B + S)

	
 

	
 

	
 

	
 

	
(e)

	
where the
 Loan is denominated in any currency other than sterling:

	
 

	
 

	
 

	
 

	
 

	
F x 0.01
 per cent per annum

     300

	
 

	
 

	
 

	
 

	
where:

	
 

	
 

	
 

	
B

	
is the
 percentage of eligible liabilities (assuming these to be in excess of any
 stated minimum) which the Lender is from time to time required to maintain as
 an interest free cash ratio deposit with the Bank of England to comply with
 cash ratio requirements;

64

	
 

	
 

	
 

	
 

	
Y

	
is the
 percentage rate of interest (excluding the Margin and the Mandatory Cost and,
 if the Loan is an overdue amount, the additional rate of interest specified
 in Clause 7.8) payable for the relevant Interest Period on the Loan;

	
 

	
 

	
 

	
 

	
S

	
is the
 percentage (if any) of eligible liabilities which the Lender is required from
 time to time to maintain as interest bearing special deposits with the Bank
 of England;

	
 

	
 

	
 

	
 

	
Z

	
is the
 interest rate per annum payable by the Bank of England to the Lender on
 special deposits; and

	
 

	
 

	
 

	
 

	
F

	
is the
 charge payable by the Lender to the Financial Services Authority under
 paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or the
 equivalent provisions in any replacement regulations (with, for this purpose,
 the figure for the minimum amount in paragraph 2.02b or such equivalent
 provision deemed to be zero), expressed in pounds per £l million of the fee
 base of the Lender.

	
 

	
 

	
 

	
2

	
For the
 purpose of this Schedule:

	
 

	
 

	
 

	
(a)

	
“eligible liabilities” and “special deposits” have the meanings given
 to them at the time of application of the formula by the Bank of England;

	
 

	
 

	
 

	
 

	
(b)

	
“fee base” has the meaning given to it in
 the Fees Regulations;

	
 

	
 

	
 

	
 

	
(c)

	
“Fees Regulations” means the regulations
 governing periodic fees contained in the FSA Supervision Manual or such other
 law or regulation as may be in force from time to time in respect of the
 payment of fees for the acceptance of deposits.

	
 

	
 

	
 

	
3

	
In the
 application of the formula B, Y, S and Z are included in the formula as
 figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is
 calculated as 0.5. x 15. Each rate calculated in accordance with the formula
 is, if necessary, rounded upward to four decimal places.

	
 

	
 

	
4

	
If a change
 in circumstances has rendered, or will render, the formula inappropriate, the
 Lender shall notify the Borrower of the manner in which the Mandatory Cost
 will 

65

	
 

	
 

	
 

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

66

SCHEDULE 3: Form of Drawdown Notice

	
 

	
 

	
To:

	
DNB NOR BANK ASA

	
 

	
 

	
From:

	
Eniaprohi Shipping Corporation

2008

Dear Sirs,

Drawdown Notice

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

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

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

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

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

Yours faithfully

	
 

	

For and on behalf of

ENIAPROHI SHIPPING CORPORATION

67

SCHEDULE 4

Form of Compliance Certificate

	
 

	
 

	
To:

	
DnB NOR BANK ASA

	
 

	
 

	
From:

	
Safe Bulkers Inc.

Dated:

Dear Sirs

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

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

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

We confirm
that:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Agreement
Clause 

	
 

	
Covenant
determination/Calculation compliance 

	
 

	
 

	
 

	
(min/max amount)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.21(a)

	
 

	
Consolidated Group Leverage

	
 

	
 

	
 

	
 

	
 

	
 

	
Consolidated
 Total Liabilities

	
 

	
USD[     ]

	
 

	
 

	
 

	
 

	
÷
 Consolidated Total Assets

	
 

	
USD[     ]

	
 

	
 

	
 

	
 

	
=
 Consolidated Group Leverage

	
 

	
[     %]

	
 

	
[maximum
 70%]

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.21(b)

	
 

	
Debt to EBITDA ratio

	
 

	
 

	
 

	
 

	
 

	
 

	
Debt

	
 

	
USD[     ]

	
 

	
 

	
 

	
 

	
÷ EBITDA

	
 

	
USD[     ]

	
 

	
 

	
 

	
 

	
=Debt to
 EBITDA ratio

	
 

	
[     ]

	
 

	
[maximum
 5.5:1]

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
13.2.21 (c)

	
 

	
Net Worth

	
 

	
 

	
 

	
 

	
 

	
 

	
Consolidated
 Total Assets

	
 

	
USD[     ]

	
 

	
 

	
 

	
 

	
(minus)
 Consolidated Total
Liabilities USD[     ]

	
 

	
 

	
 

	
 

	
 

	
 

	
= Net Worth

	
 

	
[     %]

	
 

	
[min.
 USD175,000,000]

68

[We confirm
that no Default is continuing.]*

	
 

	
 

	
 

	
 

	
Signed:

	

	
 

	

	
 

	
Director 

	
 

	
Director

	
 

	
 

	
of 

	
 

	
of 

	
 

	
 

	
Safe Bulkers Inc.

	
 

	
Safe Bulkers Inc.

	
 

	
 

	

	
*

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

69

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

	
 

	
 

	
 

	
SIGNED by KONSTANTINOS ADAMOPOULOS

	
)

	
 

	
duly
 authorised for and on behalf

	
)

	
 

	
of ENIAPROHI SHIPPING CORPORATION

	
)

	
 

	
 

	
 

	
 

	
SIGNED by CHRISTODOULOS VARIZIS

	
)

	
 

	
duly
 authorised for and on behalf

	
)

	
 

	
of DnB NOR BANK ASA

	
)Exhibit 4.64 

DATED 25 September 2008

SAFE
BULKERS INC.

-
to -

DnB NOR BANK ASA

	
 

	

	
 

	
GUARANTEE AND INDEMNITY

	
 

	

STEPHENSON
HARWOOD

One, St. Paul’s Churchyard

London EC4M 8SH

Tel: +44 020 7329 4422

Fax: +44 020 7329 7100

(Ref: 04.133)

CONTENTS

Page

	
 

	
 

	
 

	
1

	
Definitions and Interpretation

	
1

	
2

	
Representations
 and Warranties

	
3

	
3

	
Guarantee
 and Indemnity

	
4

	
4

	
Preservation
 of Guarantor’s Liability

	
5

	
5

	
Preservation
 of Lender’s Rights

	
6

	
6

	
Undertakings

	
8

	
7

	
Payments

	
10

	
8

	
Currency

	
11

	
9

	
Set-Off

	
12

	
10

	
Application
 of Moneys

	
12

	
11

	
Partial
 Invalidity

	
12

	
12

	
Further
 Assurance

	
12

	
13

	
Miscellaneous

	
13

	
14

	
Notices

	
13

	
15

	
Counterparts

	
13

	
16

	
Law and
 Jurisdiction

	
13

GUARANTEE AND INDEMNITY

Dated: 25
September 2008

BY:

	
 

	
 

	
 

	
(1)

	
SAFE BULKERS INC.,
 a company incorporated according to the law of the Republic of Marshall
 Islands whose registered office is at Trust Company Complex. Ajeltake Road,
 Ajeltake Island, Majuro, Marshall Islands MII 96960 (the “Guarantor”)

	
 

	
 

	
IN FAVOUR OF:

	
 

	
 

	
(2)

	
DnB NOR BANK ASA,
 acting through its office at 20 St. Dunstan’s Hill, London EC3R 8HY, England
 (the “Lender”).

	
 

	
 

	
WHEREAS:

	
 

	
(A)

	
The Lender
 has agreed to lend to Eniaprohi Shipping Corporation, of the Republic of
 Liberia (the “Borrower”) an amount not exceeding forty five million
 Dollars ($45,000,000) (the “Loan”) on the terms and subject to the
 conditions set out in a secured multi-currency reducing revolving credit
 facility agreement dated 25 September 2008 made between the Lender (as
 lender) and the Borrower (as borrower) (the “Facility Agreement”).

	
 

	
 

	
(B)

	
The Borrower
 may convert any part of the Loan into a Permitted Currency in accordance
 with, inter alia, clause 5 of the Facility Agreement.

	
 

	
 

	
(C)

	
The Borrower
 and the Lender have also entered into (inter alia) an ISDA Master Agreement
 in 1992 Multi Currency — Cross Border form together with the Schedule
 thereto, both dated 25 September 2008, pursuant to which the Borrower may
 enter into one or more Transactions the terms and conditions of which shall
 be specified in a Confirmation sent or to be sent by the Lender to the
 Borrower.

	
 

	
 

	
(D)

	
Pursuant to
 the Facility Agreement, and as a condition precedent to the obligation of the
 Lender to make the Loan available to the Borrower, the Borrower has amongst
 other things, agreed to procure that the Guarantor execute and deliver this
 Guarantee and Indemnity in favour of the Lender.

	
 

	
 

	
THIS DEED WITNESSES as follows:

	
 

	
1

	
Definitions and Interpretation

	
 

	
 

	
 

	
1.1

	
In this
 Guarantee and Indemnity:

	
 

	
 

	
 

	
 

	
 

	
“Default Rate”
 means interest at the rate calculated in accordance with clause 8.8 of the
 Facility Agreement.

	
 

	
 

	
 

	
 

	
 

	
 

	
“GAAP” means
 generally accepted accounting principles in the United States of America.

	
 

	
 

	
 

	
 

	
 

	
“Guarantor’s Liabilities”
 means all of the liabilities and obligations of the Guarantor to the Lender
 under or pursuant to this Guarantee and Indemnity, from time to time, whether
 in respect of principal, interest, costs or otherwise and whether present,
 future, actual or contingent.

	
 

	
 

	
 

	
 

	
 

	
“Indebtedness”
 means the aggregate from time to time of the amount of the Loan outstanding;
 all accrued and unpaid interest on the Loan; and all other sums of any nature
 (together with all accrued and unpaid interest on any of those sums) payable
 by the Borrower to the Lender under all or any of the Finance Documents.

	
 

	
 

	
 

	
 

	
1.2

	
Unless
 otherwise specified in this Guarantee and Indemnity, or unless the context
 otherwise requires, all words and expressions defined in the Facility
 Agreement shall have the same meaning when used in this Guarantee and
 Indemnity.

	
 

	
 

	
 

	
 

	
1.3

	
In this
 Guarantee and Indemnity:

	
 

	
 

	
 

	
 

	
 

	
1.3.1

	
words
 denoting the plural number include the singular and vice versa;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.3

	
references
 to Clauses are references to clauses of this Guarantee and Indemnity;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.4

	
references
 to this Guarantee and Indemnity include the recitals to this Guarantee and
 Indemnity;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.5

	
the headings
 and contents page(s) arc for the purpose of reference only, have no legal or
 other significance, and shall be ignored in the interpretation of this
 Guarantee and Indemnity;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.6

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.7

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

2

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.8

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.3.9

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

	
 

	
 

	
 

	
 

	
2

	
Representations and Warranties

	
 

	
 

	
 

	
The
 Guarantor represents and warrants to the Lender at the date of this Guarantee
 and Indemnity and, save for Clauses 2.4. 2.9 and 2.13, (by reference to the
 facts and circumstances then pertaining) on each day throughout the Facility
 Period that:

	
 

	
 

	
 

	
2.1

	
all
 representations and warranties given by the Borrower in the Facility
 Agreement in respect of the Guarantor and/or this Guarantee and Indemnity are
 and will remain correct and none of them is or will become misleading; and

	
 

	
 

	
 

	
 

	
2.2

	
the
 Guarantor is a corporation, duly incorporated and validly existing under the
 law of its jurisdiction of incorporation and has the power to own its assets
 and to carry on its business as it is being conducted; and

	
 

	
 

	
 

	
 

	
2.3

	
the
 Guarantor has the power to enter into and perform this Guarantee and
 Indemnity and has taken all necessary action to authorise its entry into and
 performance of this Guarantee and Indemnity; and

	
 

	
 

	
 

	
 

	
2.4

	
the
 Guarantor is not insolvent or in liquidation or administration or subject to
 any other formal or informal insolvency procedure, and no receiver,
 administrative receiver, administrator, liquidator, trustee or analogous
 officer has been appointed in respect of the Guarantor or all or any part of
 its assets; and

	
 

	
 

	
 

	
 

	
2.5

	
this
 Guarantee and Indemnity constitutes legal, valid, binding and enforceable
 obligations of the Guarantor; and

	
 

	
 

	
 

	
 

	
2.6

	
all
 consents, licences, approvals and authorisations of, or registrations with or
 declarations to, any governmental authority, bureau or agency which may be
 required in connection with the entry into, performance, validity or
 enforceability of this Guarantee and Indemnity have been obtained or made and
 remain in full force and effect and the Guarantor is not aware of any event
 or circumstance which could reasonably be expected adversely to affect the
 right of the Guarantor to hold and/or obtain renewal of any such consents,
 licences, approvals or authorisations; and

	
 

	
 

	
 

	
 

	
2.7

	
no
 litigation, arbitration or administrative proceeding of or before any court,
 arbitral body or agency which if adversely determined, might reasonably be
 expected to have a material adverse effect on the business or financial
 condition of the Guarantor have (to the best of the Guarantor’s 

3

	
 

	
 

	
 

	
 

	
 

	
knowledge
 and belief) been started or threatened against the Guarantor; and

	
 

	
 

	
 

	
 

	
2.8

	
the entry
 into and performance of this Guarantee and Indemnity will not conflict with
 the constitutional documents of the Guarantor or any law or regulation or
 document applicable to, or binding on, the Guarantor or any of its assets;
 and

	
 

	
 

	
 

	
 

	
2.9

	
the
 Guarantor is not required to make any deduction or withholding from any
 payment which it may be obliged to make to the Lender under or pursuant to
 this Guarantee and Indemnity; and

	
 

	
 

	
 

	
 

	
2.10

	
it is not
 necessary to ensure the legality, validity, enforceability or admissibility
 in evidence of this Guarantee and Indemnity that it be filed, recorded or
 enrolled with any court or other authority in any country or that any stamp,
 registration or similar tax be paid on or in relation to this Guarantee and
 Indemnity; and

	
 

	
 

	
 

	
 

	
2.11

	
the
 Guarantor is not in breach of, or default under, any agreement of any sort
 binding on it or on all or any part of its assets; and

	
 

	
 

	
 

	
 

	
2.12

	
the
 Guarantor is not aware of any material facts or circumstances which have not
 been disclosed to the Lender and which might, if disclosed, have adversely
 affected the decision of a person considering whether or not to make loan
 facilities of the nature contemplated by the Facility Agreement available to
 the Borrower; and

	
 

	
 

	
 

	
 

	
2.13

	
the
 Guarantor has received a copy of the Facility Agreement and approves of, and
 agrees to, the terms and conditions of the Facility Agreement.

	
 

	
 

	
 

	
3

	
Guarantee and Indemnity

	
 

	
 

	
 

	
The
 Guarantor:

	
 

	
 

	
 

	
3.1

	
irrevocably
 and unconditionally guarantees the due and punctual payment of each and every
 part of the Indebtedness in accordance with the terms of the Finance
 Documents so that, if any of the Indebtedness is not paid when it is due and
 payable, whether on maturity or otherwise, the Guarantor will, immediately on
 demand, make such payment to the Lender in the manner specified by the
 Lender, together with interest on the amount demanded at the rate accruing on
 the same under the Facility Agreement from the date of demand until the dale
 of payment, both before and after judgment; and

	
 

	
 

	
 

	
 

	
3.2

	
agrees, as a
 separate and independent obligation, that, if any of the Indebtedness is not
 recoverable from the Guarantor under Clause 3.1 for any reason, the Guarantor
 will be liable as a principal debtor by way of indemnity for the same amount
 as that for which the Guarantor would 

4

	
 

	
 

	
 

	
 

	
 

	
 

	
have been
 liable had that Indebtedness been recoverable, and agrees to discharge its
 liability under this Clause 3.2 by making payment to the Lender immediately
 on demand together with interest on the amount demanded at the rate accruing
 on the same under the Facility Agreement from the date of demand until the
 date of payment, both before and after judgment.

	
 

	
 

	
 

	
 

	
4

	
Preservation of Guarantor’s Liability

	
 

	
 

	
 

	
4.1

	
This
 Guarantee and Indemnity is a continuing security for the full amount of the
 Indebtedness from time to time until the expiry of the Facility Period.

	
 

	
 

	
 

	
 

	
4.2

	
The Lender
 may without the Guarantor’s consent and without notice to the Guarantor and
 without in any way releasing or reducing the Guarantor’s Liabilities:

	
 

	
 

	
 

	
 

	
 

	
4.2.1

	
amend, vary,
 novate, or replace any of the Finance Documents (other than this Guarantee
 and Indemnity); and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.2

	
agree with
 the Borrower to increase or reduce the amount of the Loan, or vary the terms
 and conditions for its repayment or prepayment (including, without
 limitation, the rate and/or method of calculation of interest payable on the
 Loan); and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.3

	
allow any
 time or other indulgence to any of the other Security Parties under or in
 connection with any of the Finance Documents; and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.4

	
renew, vary,
 release or refrain from enforcing any of the Finance Documents (other than
 this Guarantee and Indemnity); and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.5

	
compound
 with any of the other Security Parties; and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.6

	
enter into,
 renew, vary or terminate any other agreement or arrangement with any of the
 other Security Parties; and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
4.2.7

	
do or omit
 or neglect to do anything which might, but for this provision, operate to
 release or reduce the liability of the Guarantor under this Guarantee and
 Indemnity.

	
 

	
 

	
 

	
 

	
 

	
4.3

	
The
 Guarantor’s Liabilities shall not be affected by:

	
 

	
 

	
 

	
 

	
 

	
4.3.1

	
the absence
 of, or any defective, excessive or irregular exercise of, any of the powers
 of any of the other Security Parties; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.2

	
any security
 given or payment made to the Lender by any of the other Security Parties
 being avoided or reduced under any law 

5

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(whether
 English or foreign) relating to bankruptcy or insolvency or analogous
 circumstance in force from time to time; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.3

	
any change
 in the constitution of the Guarantor or of any of the other Security Parties
 or of the Lender or the absorption of or amalgamation by the Lender in or
 with any other entity or the acquisition of all or any part of the assets or
 undertaking of the Lender by any other entity; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.4

	
the
 liquidation, administration, receivership, bankruptcy or insolvency of the
 Guarantor or any of the other Security Parties; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.5

	
any of the
 Finance Documents (other than this Guarantee and Indemnity) being defective,
 void or unenforceable, or the failure of any other person to provide the
 Lender with any security, guarantee or indemnity envisaged by the Facility
 Agreement; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.6

	
any
 composition, assignment or arrangement being made by any of the other
 Security Parties with any of its creditors; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
4.3.7

	
anything
 which would, but for this provision, have released or reduced the liability
 of the Guarantor to the Lender.

	
 

	
 

	
 

	
 

	
 

	
4.4

	
The Lender
 may continue the account(s) of the Borrower or open one or more new accounts
 for the Borrower notwithstanding any demand under this Guarantee and
 Indemnity, and the Guarantor’s liability at the date of demand shall not be
 released or affected by any subsequent payment into or out of any of the
 Borrower’s accounts with the Lender.

	
 

	
 

	
 

	
 

	
5

	
Preservation of Lender’s Rights

	
 

	
 

	
 

	
5.1

	
This
 Guarantee and Indemnity is in addition to any other security, guarantee or
 indemnity now or in the future held by the Lender in respect of the
 Indebtedness, whether from the Borrower, the Guarantor or any other person,
 and shall not merge with, prejudice or be prejudiced by, any such security,
 guarantee or indemnity or any contractual or legal right of the Lender.

	
 

	
 

	
 

	
 

	
5.2

	
Any release,
 settlement, discharge or arrangement relating to the Guarantor’s Liabilities
 shall be conditional on no payment, assurance or security received by the
 Lender in respect of the Indebtedness being avoided or reduced under any law
 (whether English or foreign) in force from time to time relating to
 bankruptcy, insolvency or any (in the opinion of the Lender) analogous
 circumstance, and, after any such avoidance or reduction, the Lender shall be
 entitled to exercise all of its rights, powers, discretions and remedies
 under or pursuant to this Guarantee and Indemnity and/or any other rights,
 powers, discretions or remedies which 

6

	
 

	
 

	
 

	
 

	
 

	
 

	
it would
 otherwise have been entitled to exercise, as if no release, settlement,
 discharge or arrangement had taken place.

	
 

	
 

	
 

	
 

	
 

	
5.3

	
Following
 the full payment of the Indebtedness, the Lender shall be entitled to retain
 this Guarantee and Indemnity and any security which it may hold for the
 Guarantor’s Liabilities until the Lender is satisfied in its discretion that
 it will not have to make any payment under any law referred to in Clause 5.2.

	
 

	
 

	
 

	
 

	
5.4

	
Until the
 expiry of the Facility Period the Guarantor shall not:

	
 

	
 

	
 

	
 

	
 

	
5.4.1

	
be entitled
 to participate in any sums received by the Lender in respect of any of the
 Indebtedness;

	
 

	
 

	
 

	
 

	
 

	
 

	
5.4.2

	
be entitled
 to participate in any security held by the Lender in respect of any of the
 Indebtedness nor stand in the place of, or be subrogated for, the Lender in
 respect of any such security; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
5.4.3

	
take any
 step to enforce any claim against any of the other Security Parties (or their
 respective estates or effects), nor claim or exercise any right of set off or
 counterclaim against any of the other Security Parties, nor make any claim in
 the bankruptcy or liquidation of any of the other Security Parties, in
 respect of any sums paid by the Guarantor to the Lender or in respect of any
 sum which includes the proceeds of realisation of any security at any time
 held by the Lender in respect of any of the Guarantor’s Liabilities; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
5.4.4

	
take any
 steps to enforce any other claim which it may have against any of the other
 Security Parties without the prior written consent of the Lender, and then
 only on such terms and subject to such conditions as the Lender may impose.

	
 

	
 

	
 

	
 

	
 

	
5.5

	
The Lender
 may, but shall not be obliged to, resort for its own benefit to any other
 means of payment at any time and in any order it thinks fit without releasing
 or reducing the Guarantor’s Liabilities.

	
 

	
 

	
 

	
 

	
5.6

	
The Lender
 may enforce this Guarantee and Indemnity either before or after resorting to
 any other means of payment without entitling the Guarantor to any benefit
 from or share in any such other means of payment until the expiry of the
 Facility Period.

	
 

	
 

	
 

	
 

	
5.7

	
The
 Guarantor agrees that it is, and will throughout the Facility Period remain,
 a principal debtor in respect of the Guarantor’s Liabilities.

	
 

	
 

	
 

	
 

	
5.8

	
No failure
 to exercise, nor any delay in exercising, on the part of the Lender, any
 right or remedy under this Guarantee and Indemnity shall operate as a waiver,
 nor shall any single or partial exercise of any right or 

7

	
 

	
 

	
 

	
 

	
 

	
 

	
remedy
 prevent any further or other exercise or the exercise of any other right or
 remedy. The rights and remedies provided in this Guarantee and Indemnity arc
 cumulative and not exclusive of any rights or remedies provided by law.

	
 

	
 

	
 

	
6

	
Undertakings

	
 

	
 

	
 

	
6.1

	
The
 Guarantor shall pay to the Lender on demand on a full indemnity basis all
 documented costs and expenses incurred by the Lender in or about or
 incidental to the exercise by it of its rights under this Guarantee and
 Indemnity, together with interest at the Default Rate on the amount demanded
 from the date of demand until the date of payment, both before and after
 judgment, which interest shall be compounded with the amount demanded at the
 end of such periods as the Lender may reasonably select.

	
 

	
 

	
 

	
 

	
6.2

	
The
 Guarantor has not taken, and will not take without the prior written consent
 of the Lender (and then only on such terms and subject to such conditions as
 the Lender may impose), any security from any of the other Security Parties
 in connection with this Guarantee and Indemnity, and any security taken by
 the Guarantor notwithstanding this Clause shall be held by the Guarantor in
 trust for the Lender absolutely as a continuing security for the Guarantor’s
 Liabilities.

	
 

	
 

	
 

	
 

	
6.3

	
The
 Guarantor will observe and perform any and all covenants and undertakings in
 the Facility Agreement whose observance and performance by the Guarantor the
 Borrower has undertaken to procure.

	
 

	
 

	
 

	
 

	
6.4

	
The
 Guarantor will not without the Lender’s prior written consent:

	
 

	
 

	
 

	
 

	
 

	
6.4.1

	
create nor
 permit to arise any Encumbrance or other third party rights over any of its
 shares in the Borrower other than in favour of the Lender; nor

	
 

	
 

	
 

	
 

	
 

	
 

	
6.4.2

	
permit the
 Borrower to acquire any new vessels nor permit the Borrower to create or
 permit to arise or continue any Encumbrance or other third party right on or
 over all or any part of its present or future assets or undertakings.

	
 

	
 

	
 

	
 

	
 

	
6.5

	
The
 Guarantor shall supply to the Lender as soon as the same become available,
 but in any event within one hundred and eighty (180) days after the end of
 each of its financial years, its audited consolidated financial statements
 for that financial year, together with a Compliance Certificate, signed by
 two directors of the Guarantor, setting out (in reasonable detail)
 computations as to compliance with clause 13.2.21 of the Facility Agreement
 as at the date at which those financial statements were drawn up. Each set of
 financial statements shall be: —

	
 

	
 

	
 

	
 

	
 

	
6.5.1

	
prepared
 using GAAP; and

8

	
 

	
 

	
 

	
 

	
 

	
 

	
6.5.2

	
certified
by a director of the Guarantor as fairly representing its financial condition
as at the date at which those financial statements were drawn up; and

	
 

	
 

	
 

	
 

	
6.6

	
The
 Guarantor shall supply to the Lender as soon as the same become available,
 but in any event within ninety (90) days after the end of each quarter during
 each of the Guarantor’s financial years, its unaudited consolidated quarterly
 financial statements for that quarter, together with a Compliance Certificate
 to be provided on a semi-annual basis, signed by two directors of the
 Guarantor, setting out (in reasonable detail) computations as to compliance
 with clause 13.2.21 of Facility Agreement as at the date at which those
 financial statements were drawn up.

	
 

	
 

	
 

	
 

	
6.7

	
The
 Guarantor shall supply to the Lender:

	
 

	
 

	
 

	
 

	
 

	
6.7.1

	
all
 documents dispatched by the Guarantor to its shareholders (or any class of
 them) or its creditors generally at the same time as they are dispatched
 other than any documents that are subject to any confidentiality restrictions
 pursuant to the New York Stock Exchange regulations that may prohibit such
 dissemination;

	
 

	
 

	
 

	
 

	
 

	
 

	
6.7.2

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

	
 

	
 

	
 

	
 

	
 

	
 

	
6.7.3

	
promptly,
 such further information regarding the financial condition, business and
 operations of any Security Party as the Lender may reasonably request.

	
 

	
 

	
 

	
 

	
 

	
6.8

	
The
 Guarantor shall permit the inspection of its financial records and accounts
 from time to time by the Lender or its nominee.

	
 

	
 

	
 

	
 

	
6.9

	
The
 Guarantor shall remain directly or indirectly beneficially owned at a minimum
 of fifty one per cent (51%) by its Current Shareholders as of the date of the
 Side Letter.

	
 

	
 

	
 

	
 

	
6.10

	
The
 Guarantor shall on a consolidated basis comply with the following financial
 covenants to be assessed on a semi-annual basis based on the Accounting
 Information received by the Lender in accordance with clauses 13.1.1 and
 13.1.2 of the Facility Agreement: —

	
 

	
 

	
 

	
 

	
 

	
6.10.1

	
The
 Consolidated Group Leverage shall be equal to or less than seventy percent
 (70%).

9

	
 

	
 

	
 

	
 

	
 

	
 

	
6.10.2

	
The ratio of
 Debt to EBITDA on a trailing twelve (12) month’s basis shall not at any time
 exceed 5.5.1.

	
 

	
 

	
 

	
 

	
 

	
 

	
6.10.3

	
The Net
 Worth shall not at any time be less than one hundred and seventy five million
 Dollars ($175,000,000).

	
 

	
 

	
 

	
 

	
7

	
Payments

	
 

	
 

	
 

	
 

	
 

	
7.1

	
All amounts
 payable by the Guarantor under or pursuant to this Guarantee and Indemnity
 shall be paid to such accounts at such banks as the Lender may from time to
 time direct to the Guarantor in the relevant currency in same day funds for
 immediate value. Payment shall be deemed to have been received on the date on
 which the Lender receives authenticated advice of receipt, unless that advice
 is received by the Lender on a day other than a Business Day or at a time of
 day (whether on a Business Day or not) when the Lender in its discretion
 considers that it is impossible or impracticable to utilise the amount
 received for value that same day. in which event the payment in question shall
 be deemed to have been received on the Business Day next following the date
 of receipt of advice by the Lender.

	
 

	
 

	
 

	
 

	
7.2

	
All payments
 to be made by the Guarantor pursuant to this Guarantee and Indemnity shall,
 subject only to Clause 7.3, be made free and clear of and without deduction
 for or on account of any taxes or other deductions, withholdings,
 restrictions, conditions or counterclaims of any nature, and the Guarantor
 will not claim any equity in respect of any payment due from it to the Lender
 under or in relation to this Guarantee and Indemnity.

	
 

	
 

	
 

	
 

	
7.3

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

	
 

	
 

	
 

	
 

	
7.4

	
If at any
 time the Guarantor is required by law to make any deduction or withholding
 from any payment to be made by it pursuant to this Guarantee and Indemnity,
 the Guarantor will pay the amount required to be deducted or withheld to the
 relevant authority within the time allowed under the applicable law and will,
 no later than thirty days after making that payment, deliver to the Lender an
 original receipt issued by the relevant authority, or other evidence
 acceptable to the Lender, evidencing the 

10

	
 

	
 

	
 

	
 

	
 

	
payment to that
 authority of all amounts required to be deducted or withheld.

	
 

	
 

	
 

	
 

	
7.5

	
If the
 Guarantor pays any additional amount under Clause 7.3, and the Lender
 subsequently receives a refund or allowance from any tax authority which the
 Lender identifies as being referable to that increased amount so paid by the
 Guarantor, the Lender shall, as soon as reasonably practicable, pay to the
 Guarantor an amount equal to the amount of the refund or allowance received,
 if and to the extent that it may do so without prejudicing its right to
 retain that refund or allowance and without putting itself in any worse
 financial position than that in which it would have been had the relevant
 deduction or withholding not been required to have been made. Nothing in this
 Clause 7.5 shall be interpreted as imposing any obligation on the Lender to
 apply for any refund or allowance nor as restricting in any way the manner in
 which the Lender organises its tax affairs, nor as imposing on the Lender any
 obligation to disclose to the Guarantor any information regarding its tax
 affairs or tax computations.

	
 

	
 

	
 

	
 

	
7.6

	
Any
 certificate or statement signed by an authorised signatory of the Lender
 purporting to show the amount of the Indebtedness or of the Guarantor’s
 Liabilities (or any part of any of them) or any other amount referred to in
 any of the Finance Documents shall, save for manifest error or on any
 question of law, be conclusive evidence as against the Guarantor of that
 amount.

	
 

	
 

	
 

	
8

	
Currency

	
 

	
 

	
 

	
8.1

	
The
 Guarantor’s liability under this Guarantee and Indemnity is to discharge the
 Indebtedness in the currency in which it is expressed to be payable (the “Agreed
 Currency”).

	
 

	
 

	
 

	
 

	
8.2

	
If at any
 time the Lender receives (including by way of set off) any payment by or on
 behalf of the Guarantor in a currency other than the Agreed Currency, that
 payment shall take effect as a payment to the Lender of the amount in the
 Agreed Currency which the Lender is able to purchase (after deduction of any
 relevant costs) with the amount of the payment so received in accordance with
 its usual practice.

	
 

	
 

	
 

	
 

	
8.3

	
To the
 extent that any payment to the Lender (whether by the Guarantor or any other
 person and whether under any judgment or court order or otherwise) in a
 currency other than the Agreed Currency shall on actual conversion into the
 Agreed Currency fall short of the relevant amount of the Indebtedness
 expressed in the Agreed Currency, then the Guarantor as a separate and
 independent obligation will indemnify the Lender against the shortfall.

11

	
 

	
 

	
 

	
9

	
Set-Off

	
 

	
 

	
 

	
 

	
The
 Guarantor irrevocably authorises the Lender at any time to set off without
 notice any sums then due and payable by the Guarantor to the Lender under
 this Guarantee and Indemnity (irrespective of the branch or office, currency
 or place of payment) against any credit balance from time to time standing on
 any account of the Guarantor (whether current or otherwise, whether or not
 subject to notice and whether or not that credit balance is then due to the
 Guarantor) with any branch of the Lender in or towards satisfaction of the
 Guarantor’s Liabilities and. in the name of the Lender or the Guarantor, to
 do all acts (including, without limitation, purchasing or converting or
 exchanging any currency) which may be required to effect such set-off. Notice
 of such set-off shall be given to the Guarantor after such set-off has taken
 place.

	
 

	
 

	
10

	
Application of Moneys

	
 

	
 

	
 

	
10.1

	
All sums
 which the Lender receives under or in connection with this Guarantee and
 Indemnity shall, unless otherwise agreed by the Lender or otherwise provided
 in the Facility Agreement, be applied by the Lender in or towards
 satisfaction, or by way of retention on account, of the Guarantor’s
 Liabilities, in such manner as the Lender may in its discretion determine.

	
 

	
 

	
 

	
 

	
10.2

	
The Lender
 may place any money received by it under or in connection with this Guarantee
 and Indemnity to the credit of a suspense account on such terms and subject
 to such conditions as the Lender may in its discretion determine for so long
 as the Lender thinks fit without any obligation in the meantime to apply that
 money in or towards discharge of the Indebtedness, and. despite such payment,
 the Lender may claim against any of the other Security Parties or prove in
 the bankruptcy, liquidation or insolvency of any of the other Security
 Parties for the whole of the Indebtedness at the date of the Lender’s demand
 for payment pursuant to this Guarantee and Indemnity, together with all
 interest, commission, charges and expenses accruing subsequently.

	
 

	
 

	
 

	
11

	
Partial Invalidity

	
 

	
 

	
 

	
If, at any
 time, any provision of this Guarantee and Indemnity is or becomes illegal,
 invalid or unenforceable in any respect under any law of any jurisdiction,
 neither the legality, validity or enforceability of the remaining provisions
 nor the legality, validity or enforceability of such provision under the law
 of any other jurisdiction will in any way be affected or impaired.

	
 

	
 

	
 

	
12

	
Further Assurance

	
 

	
 

	
 

	
 

	
The
 Guarantor agrees that from time to time on the written request of the Lender
 it will immediately execute and deliver to the Lender all further documents
 which

12

	
 

	
 

	
 

	
 

	
the Lender
 may require for the purpose of perfecting or protecting the security intended
 to be created by this Guarantee and Indemnity.

	
 

	
 

	
13

	
Miscellaneous

	
 

	
 

	
 

	
13.1

	
All the
 covenants and agreements of the Guarantor in this Guarantee and Indemnity
 shall bind the Guarantor and its successors and permitted assignees and shall
 inure to the benefit of the Lender and its successors, transferees and
 assignees.

	
 

	
 

	
 

	
 

	
13.2

	
The
 representations and warranties on the part of the Guarantor contained in this
 Guarantee and Indemnity shall survive the execution of this Guarantee and
 Indemnity.

	
 

	
 

	
 

	
 

	
13.3

	
No variation
 or amendment of this Guarantee and Indemnity shall be valid unless in writing
 and signed on behalf of the Guarantor and the Lender.

	
 

	
 

	
 

	
 

	
13.4

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

	
 

	
 

	
 

	
14

	
Notices

	
 

	
 

	
 

	
 

	
The
 provisions of clause 18 of the facility Agreement shall apply (mutatis
 mutandis) to this Guarantee and Indemnity as if it were set out in full with
 references to this Guarantee and Indemnity substituted for references to the
 Facility Agreement and with references to the Guarantor substituted for
 references to the Borrower.

	
 

	
 

	
 

	
15

	
Counterparts

	
 

	
 

	
 

	
 

	
This
 Guarantee and Indemnity may be executed in any number of counterparts, and
 this has the same effect as if the signatures on the counterparts were on a
 single copy of this Guarantee and Indemnity.

	
 

	
 

	
 

	
16

	
Law and Jurisdiction

	
 

	
 

	
 

	
 

	
16.1

	
This
 Guarantee and Indemnity shall in all respects be governed by and interpreted
 in accordance with English law.

	
 

	
 

	
 

	
 

	
16.2

	
For the
 exclusive benefit of the Lender, the Guarantor irrevocably agrees that the
 courts of England are to have jurisdiction to settle any disputes which may
 arise out of or in connection with this Guarantee and Indemnity and that any
 proceedings may be brought in those courts.

	
 

	
 

	
 

	
 

	
16.3

	
Nothing
 contained in this Clause shall limit the right of the Lender to commence any
 proceedings against the Guarantor in any other court of competent
 jurisdiction nor shall the commencement of any proceedings 

13

	
 

	
 

	
 

	
 

	
 

	
 

	
against the
 Guarantor in one or more jurisdictions preclude the commencement of any
 proceedings in any other jurisdiction, whether concurrently or not.

	
 

	
 

	
 

	
 

	
16.4

	
The
 Guarantor irrevocably waives any objection which it may now or in the future
 have to the laying of the venue of any proceedings in any court referred to
 in this Clause and any claim that those proceedings have been brought in an
 inconvenient or inappropriate forum, and irrevocably agrees that a judgment
 in any proceedings commenced in any such court shall be conclusive and
 binding on it and may be enforced in the courts of any other jurisdiction.

	
 

	
 

	
 

	
 

	
16.5

	
Without
 prejudice to any other mode of service allowed under any relevant law, the
 Guarantor:

	
 

	
 

	
 

	
 

	
 

	
16.5.1

	
irrevocably
 appoints Mr. Savvas Savvides, 24 Exeter Road, London N14 5JY, England
 (tel/fax: +44 208 361 2606) as its agent for service of process in relation
 to any proceedings before the English courts; and

	
 

	
 

	
 

	
 

	
 

	
 

	
16.5.2

	
agrees that
 failure by a process agent to notify the Guarantor of the process will not
 invalidate the proceedings concerned.

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

	
 

	
 

	
 

	
 

	
SIGNED and DELIVERED

	
)

	
 

	
 

	
as a DEED

	
)

	
 

	
 

	
by SAFE BULKERS
 INC.

	
)

	
 

	
 

	
acting by
 Konstantinos Adamopoulos

	
)

	
 

	
/s/

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
its duly
 authorised attorney-in-fact

	
)

	
 

	
 

	
 

	
 

	
 

	
 

	
In the
 presence of: Sofia Tzanaki

	
)

	
 

	
 

	
 

	
 

	
 

	
 

	
STEPHENSON
 HARWOOD

	
 

	
 

	
 

	
ARISTON
 BUILDING

	
 

	
 

	
 

	
7 FRELLINON
 STR. & AK71 MIAOULL

	
 

	
 

	
 

	
PIRAEUS
 18536

	
 

	
 

	
 

	
VAT. NO.
 998711156

	
 

	
 

	
 

	
TEL 210 4295
 160

	
 

	
 

	
 

14

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