Document:

Exhibit 4(B)(XIV)

 

EXECUTIVE
SERVICE AGREEMENT

 

THIS
EXECUTIVE SERVICE AGREEMENT is made on the 30th day of November 2010.

 

BETWEEN

 

		(1)	Lloyds
                                         TSB Bank Plc (the “Employer”); and

 

		(2)	Juan
                                         Colombas (the “Executive”).

 

Definitions
used in this Agreement are set out in Clause 19.2 below.

 

IT
IS AGREED as follows:

 

		1	Appointment
                                         Pre-Conditions and Term

 

Appointment

 

		1.1	Provided
                                         the Executive has satisfied the conditions set out in Clause 1.2 below, the Employer
                                         shall employ the Executive as Chief Risk Officer or in such other executive capacity
                                         consistent with the Executive’s seniority and skills as the Employer may from time to
                                         time reasonably require (the “Employment”).

 

Pre-conditions

 

		1.2	The
                                         Executive’s employment is conditional upon:

 

		1.2.1	the
                                         Executive having been approved as an “Approved Person” in respect of the
                                         Employment by the FSA under the FSMA 2000 (“FSMA Approval”) (for the
                                         avoidance of doubt this condition only applies if the role requires the Executive to
                                         be an “Approved Person”),

 

		1.2.2	the
                                         Executive not being prevented from taking up employment under this Agreement on or before
                                         7 March 2011 by any obligation or duty owed to a third party, whether contractual or
                                         otherwise,

 

		1.2.3	the
                                         satisfactory completion of any recruitment formalities including, where appropriate,
                                         obtaining permission from the UK Border Agency for the Executive to take up this
                                         employment.

 

If
the conditions are not satisfied then, unless the Employer decides to waive the conditions or the parties agree to postpone the
Commencement Date until the conditions have been satisfied, this Agreement shall not take effect and the Executive shall not have
any claim for compensation or otherwise against the Employer by reason of this.

 

Term

 

		1.3	The
                                         Employment shall begin on 17 January 2011 (or such later date as the parties may mutually
                                         agree but no later than 7 March 2011) (the “Commencement Date”) and
                                         shall continue until terminated:

 

		1.3.1	by
                                         not less than 12 months’ notice given by the Employer to the Executive (provided
                                         that such notice may not expire before the second anniversary of the Commencement Date);
                                         or

 

		1.3.2	by
                                         not less than 6 months’ notice given by the Executive to the Employer; or

 

		1.3.3	under
                                         a provision set out in Clause 11.

    	 

    	

    

		1.4	The
                                         date on which any continuous period of employment began with the Employer or a previous
                                         employer which counts as part of the Executive’s continuous period of employment
                                         with the Employer for the purposes of the law relating to redundancy and unfair dismissal
                                         is the Commencement Date.

 

		2	Duties
                                         of the Executive

 

General
Duties

 

		2.1	The
                                         Executive will during the Employment:

 

		2.1.1	devote
                                         their whole time, attention and skill to the Employment during normal office hours and
                                         during such other times as may reasonably be required for the effective performance of
                                         the duties under this Agreement;

 

		2.1.2	properly
                                         perform the duties set out in this Agreement and properly exercise any powers conferred
                                         by this Agreement;

 

		2.1.3	accept
                                         any offices or directorships as reasonably required by the Employer;

 

		2.1.4	comply
                                         with all rules, regulations policies and codes issued by the Employer that apply to the
                                         Employment;

 

		2.1.5	comply
                                         with all rules, regulations and codes imposed or recommended by any industry or regulatory
                                         body that apply to the Employment;

 

		2.1.6	keep
                                         their line manager promptly informed of the conduct of the Executive’s duties,
                                         plans for the future performance of the duties and of any conflict of interest to which
                                         the Executive is or may become subject;

 

		2.1.7	comply
                                         with any policy directions or reasonable other directions issued by the Employer;

 

		2.1.8	use
                                         best endeavours to promote the interests and reputation of every Group Company; and

 

		2.1.9	keep
                                         the Employer advised of the Executive’s current UK residential address.

 

Interests
of the Executive

 

		2.2	The
                                         Executive will disclose promptly in writing to the Employer any interests (for example,
                                         shareholdings or directorships) whether or not of a commercial or business nature (except
                                         interests in any Group Company).

 

		2.3	Subject
                                         to Clause 2.4, during the Employment (including any Garden Leave Period) the Executive
                                         will not be directly or indirectly engaged or concerned in the conduct of any activity
                                         of a commercial or business nature (except as a representative of the Employer or with
                                         the written consent of their line manager).

 

		2.4	The
                                         Executive may hold or be interested in investments which amount to not more than one
                                         per cent of the issued investments of any class or any one company.

 

		2.5	The
                                         Executive will (and will use best endeavours to ensure that the Executive’s spouse
                                         and any dependents) comply with all rules of law, including Part V of the Criminal Justice
                                         Act 1993, the Model Code appended to Chapter 16 of the Listing Rules of the United Kingdom
                                         Listing Authority, the FSA’s Code of Market Conduct and all other rules, policies
                                         or codes applicable to the Employer or the Executive from time to time in relation to
                                         the holding or trading of securities (in each case as amended or replaced from time to
                                         time).

    	 

    	

    

		2.6	The
                                         Executive will not directly or indirectly receive any benefit from any person having
                                         or seeking to have business transactions with any Group Company (other than reasonable
                                         corporate hospitality and seasonal or occasional gifts of limited value).

 

Approved
Person

 

		2.7	During
                                         the period of this Agreement the Executive will not do anything which could cause the
                                         Executive to be disqualified from continuing to act as a director of any Group Company
                                         or lose approval as an “Approved Person” by the FSA under the FSMA
                                         2000 in respect of the Employment. If the Executive is not an “Approved Person”
                                         at the date of appointment under this Agreement, then the Executive will not do anything
                                         which would cause the Executive from becoming an “Approved Person” in the
                                         future.

 

Location

 

		2.8	The
                                         Executive will work in the Employer’s London Head Office from time to time (currently
                                         25 Gresham Street, London). The Executive shall travel to such places within or outside
                                         the United Kingdom as the Employer may specify.

 

		3	Remuneration

 

		3.1	During
                                         the Employment the Employer will pay the Executive a salary of £625,000
                                         per annum or such higher salary as may be notified to the Executive from time to time.
                                         The Executive’s salary shall be reviewed (but without any obligation to increase) annually
                                         from (and with effect from) 1 January 2011. During the first three years of the Employment
                                         commencing from the Commencement Date the Employer will also pay the Executive a housing
                                         and education allowance at the rate of £300,000 per annum for the first year, £200,000
                                         per annum for the second year and £100,000 per annum for the third year after which
                                         the allowance will cease to be payable. The allowance shall not be treated as salary
                                         or taken into account for the purposes of calculating bonus or other awards, pension
                                         contributions or benefits or any other benefits provided under this Agreement. Salary
                                         and allowance will be paid in equal monthly instalments on or about the 20th day of each
                                         month. The Executive shall maintain a bank account with a subsidiary of the Lloyds Banking
                                         Group into which the Executive’s salary and allowance shall be paid.

 

		3.2	The
                                         Executive agrees to waive payment of any director’s fees or other remuneration
                                         payable in respect of any directorship held by the Executive with any Group Company.

 

		3.3	The
                                         Executive will be paid such bonus at such times and subject to such conditions as the
                                         Employer in its sole and absolute discretion may from time to time determine. In accordance
                                         with clause 4.11 below payment of such a bonus or participation in a bonus scheme is
                                         not a contractual entitlement. Notwithstanding the discretionary nature of the bonus
                                         scheme, in recognition that the Executive may by reason of accepting Employment with
                                         the Employer forfeit in whole or in part any entitlement to receive a bonus award from
                                         Santander in respect of the 2010 performance year the Employer shall on or before 31
                                         March 2011 (the “Bonus Award Date”) and provided always that the
                                         Executive remains employed by the Employer (or another Group Company) and has not given
                                         or received notice to terminate the Employment at the Bonus Award Date, procure
                                         the making to the Executive of a bonus award to the value of £500,000
                                         less the value of any bonus award for 2010 made or agreed to be made to the Executive
                                         by Santander. The bonus award shall be subject to the Employer’s policy
                                         in relation to payment, deferral, malus and clawback prevailing at the Bonus Award
                                         Date and otherwise satisfy any relevant requirements of the FSA, including its Remuneration
                                         Code as amended from time to time.

    	 

    	

    

		3.4	The
                                         Executive will be eligible to participate in any all-employee share schemes or other
                                         benefits provided to all employees, or to be considered for participation in any discretionary
                                         scheme, operated or offered by the Employer or any Group Company from time to time in
                                         accordance with the relevant rules (including without limitation any rules as to eligibility).
                                         In accordance with clause 4.11 below participation in any share option, share incentive
                                         or other employee benefit plan, scheme or arrangement is not a contractual entitlement
                                         except to the extent of any specific awards or entitlements made or notified to the Executive
                                         and, for the avoidance of doubt it is agreed that the provisions set out in Clause 5
                                         are contractual and binding on the Employer.

 

		3.5	During
                                         the first two years of the Employment commencing from the Commencement Date the Employer
                                         will pay the Executive an annual expatriate allowance of £36,000 net of tax (which
                                         shall be grossed up to take account of tax payable by the Executive). The expatriate
                                         allowance shall not be treated as salary or taken into account for the purposes of calculating
                                         bonus or other awards, pension contributions or benefits or any other benefits provided
                                         under this Agreement.

 

		4	Pension
                                         and Other Benefits

 

		4.1	Pension

 

The
Executive shall be entitled to participate in Your Tomorrow (the “Scheme”). The Executive’s membership of the
Scheme, including the contributions payable by and on behalf of the Executive, will be subject to and in accordance with the terms
of its governing documentation in force from time to time (including in particular to the rights of any person to amend or terminate
the Scheme) except that:

 

		(a)	subject
                                         to (b), employer contributions to the Scheme in respect of the Executive will be at the
                                         rate of 25% of the Executive’s annual salary referred to in Clause 3.1 from time
                                         to time;

 

		(b)	the
                                         Executive must contribute to the Scheme at the rate of 3% of the Executive’s annual
                                         salary referred to in clause 3.1 from time to time;

 

		(c)	any
                                         provisions under the Scheme for the Employer to pay additional contributions to the Scheme
                                         linked to the level of contributions by a member will not apply to the Executive.

 

If
the Executive does not join the Scheme or subsequently opts out, the Employer will pay to the Executive or to a pension scheme
nominated by the Executive an amount equal to 25% of the annual salary referred to in Clause 3.1 from time to time as a non-pensionable
cash supplement. Such allowance will be payable in equal monthly instalments.

 

The
Executive acknowledges that in signing this contract the Executive will be deemed to have opted out of the “personal accounts”
arrangements due to be implemented from 2012 in the United Kingdom (except and to the extent that this is the arrangement which
the Employer designates as the Scheme).

 

Currently,
a Contracting-Out Certificate pursuant to the provisions of the Pensions Act 1995 is not in force in respect of the Executive’s
employment.

 

The
contribution or allowance paid by the Employer will not be taken into account for the purposes of calculating bonus or other such
payments as provided for in clause 3.1 above and shall be exclusive of the Executive’s 4% flexible benefit allowance.

    	 

    	

    

		4.2	This
                                         Clause shall apply where the Executive loses rights to payments pursuant to a letter
                                         agreement dated 15 December 2008 between Santander, S.A. and the Executive. In recognition
                                         that the Executive will by reason of accepting employment with the Employer, suffer loss
                                         in relation to payments on retirement by virtue of his loss of rights as referred to
                                         in this Clause, the Employer has agreed to establish for the Executive as soon as reasonably
                                         practicable an unfunded pension arrangement for and in respect of the Executive (in terms
                                         to be agreed with the Executive and subject to complying with any requirements of the
                                         FSA, including its Remuneration Code, as amended from time to time) to compensate him
                                         for the loss of payments under his existing arrangements.

 

		4.3	Flexible
                                         Benefits

 

The
Executive shall be eligible to participate in the Flexible Benefits Scheme. The Executive shall receive in addition to salary
a 4% flex cash allowance each month which the Executive can use, together with up to 50% of salary, to select from a range of
benefits. Eligibility for flexible benefits will commence on the 1st day of the following month after the Commencement Date.

 

		4.4	Salary
                                         sacrifice arrangements

 

The
Employer has or may at some stage introduce a salary sacrifice arrangement. Under this arrangement some or all of the Executive’s
pension contributions payable to the Scheme from time to time (which may at the Employer’s discretion include both regular
or mandatory contributions or voluntary contributions) are currently or will be paid on the Executive’s behalf by the Employer
in return for a reduction in the Executive’s salary (although pension and life cover benefits will be calculated without
regard to this reduction).  By signing and/or entering into this contract the Executive has agreed to this reduction.  The
Executive is therefore automatically a member of the salary sacrifice scheme (if one is already in place) or alternatively will
join the salary sacrifice arrangement if it is introduced unless the Executive chooses to opt out as permitted under the terms
of the salary sacrifice arrangement.

 

		4.5	Rights
                                         of the Employer

 

The
Employer shall be entitled at any time to terminate or vary the Scheme or the Executive’s membership of it. For the avoidance
of doubt termination of the Scheme shall not affect the Executive’s entitlement to receive an amount equal to 25% of the annual
salary as a pension allowance.

 

		4.6	Car
                                         Allowance

 

The
Executive shall be eligible to receive a non pensionable cash allowance of £1,000 payable each month.

 

		4.7	Life
                                         Cover

 

The
Executive will be provided with Life Cover.

 

The
amount of Life Cover in the event of the Executive’s death during the Employment will be equal to four times the annual
salary set out in Clause 3.1 (as revised from time to time), irrespective of whether or not the Executive is a member of any pension
scheme operated by the Employer.

 

If
the Executive joins the Scheme for retirement benefits, depending on the Executive’s circumstances at the time of the Executive’s
death, there may be a further benefit available of up to four times the annual salary set out in Clause 3.1 (as revised from time

    	 

    	

    

to
time). The provision of any such benefit will be as provided for in the terms of the New Scheme.

 

Such
Life Cover will be provided under the terms of any arrangement designated by the Employer and notified to the Executive (subject
to the proviso that any Life Cover in excess of the Lifetime Allowance applicable to registered pension schemes will be provided
by the Employer or through an arrangement other than a registered pension scheme).

 

		4.8	Private
                                         Medical and Permanent Health Cover

 

			The
                                         Executive may participate, during the Employment, in the Employer’s international
                                         private health scheme. International private health cover will be provided for the Executive,
                                         his spouse and his dependent children subject to and in accordance with such terms from
                                         time to time on which any appointed supplier provides cover (including eligibility requirements).
                                         In addition, the Employer will provide Permanent Health cover at a level and on terms
                                         to be agreed with the Executive. If and to the extent that the Employer reduced, varies
                                         or withdraws the private health scheme or permanent health cover for all other participants,
                                         the arrangements in this clause may also be reduced, varied or withdrawn by the Employer
                                         to the same extent.

 

		4.9	Health
                                         Screening

 

The
Executive will be eligible to receive, and expected to undertake, an annual confidential medical screening by a supplier appointed
by the Employer.

 

		4.10	Deductions

 

			For
                                         the avoidance of doubt, any and all remuneration or benefits provided by virtue of this
                                         Agreement shall be subject to such deductions for tax and National Insurance as the Employer
                                         is required to make by law or the tax and/or National Insurance authorities. Professional
                                         advice will be provided for the Executive on the Employer’s standard terms in respect
                                         of the Executive’s UK and Spanish tax returns.

 

		4.11	Other
                                         Benefits

 

			The
                                         Executive acknowledges that (except for any specific awards or entitlements notified
                                         to the Executive individually or by a general notice to staff and subject to the other
                                         provisions of this Agreement including the provisions set out in Clause 5 which are contractual)
                                         participation in any bonus, share option, share incentive or other employee benefit plan,
                                         scheme or arrangement (“Plan”) is not a contractual entitlement and on termination
                                         of the Employment the Executive will have no right to compensation or otherwise against
                                         the Employer or any other Group Company by reason of no longer being able to participate
                                         in any such Plan.

 

		5	Share
                                         Buy-Out Awards

 

Awards

 

		5.1	In
                                         recognition that the Executive’s outstanding awards over Santander shares will
                                         lapse on accepting Employment with the Employer, the Employer has agreed that it will,
                                         as soon as reasonably practicable following commencement of the Employment, procure the
                                         grant to the Executive of awards over shares in Lloyds Banking Group plc on the following
                                         bases. The Employer may change any of the vesting dates specified in Clauses 5.1.1 and
                                         5.1.2 below to a later date (such time being a date which is as close as possible to
                                         the original vesting date specified below), at the time of grant of the Share Buy-Out
                                         Awards or

    	 

    	

    

subsequently
if it becomes necessary to do so to comply with the Listing Rules of the UK Listing Authority or to take account of the actual
Commencement Date.

 

		5.1.1	in
                                         respect of shares the Executive could otherwise have acquired in 2011 and 2012 under
                                         the Santander performance share plan, an award over a number of Lloyds Banking Group
                                         plc shares whose value on the date of commencement of Employment equates to the value
                                         on 30 November 2010 of 52,962 Santander shares (being 91% of the Santander shares under
                                         the relevant Santander performance share plan awards). 44 % of the award will vest on
                                         15 June 2011 and 56% of the award will vest on 15 June 2012 as long as the Executive
                                         remains in Employment, except as provided in Clauses 5.3 and 5.4 and subject to the deduction
                                         of income tax and any other withholding obligations for which the Executive is liable;
                                         and

 

		5.1.2	in
                                         respect of shares the Executive could otherwise have acquired in 2013 under the Santander
                                         performance share plan, an award over a number of Lloyds Banking Group plc shares whose
                                         value on the date of commencement of Employment equates to the value on 30 November 2010
                                         of 60,000 Santander shares under the relevant Santander performance share plan award.
                                         The award will vest on 14 June 2013 if a performance condition based on the TSR performance
                                         of Lloyds Banking Group plc against the peer group currently set in relation to the Santander
                                         shares amended to include Santander is satisfied, as long as the Executive remains in
                                         Employment, except as provided in Clauses 5.3 and 5.4 and subject to the deduction of
                                         income tax and any other withholding obligations for which the Executive is liable.

 

(together
referred to as the “Share Buy-Out Awards”).

 

		5.2	For
                                         the purposes of calculating the value of the Share Buy-Out Awards referred to in clauses
                                         5.1.1 and 5.1.2, the value of the Santander shares will be the agreed Pounds Sterling
                                         equivalent of the closing price on 30 November 2010 and the value for the shares of Lloyds
                                         Banking Group plc will be the Pounds Sterling closing price on 30 November 2010.

 

Forfeiture
and Malus

 

		5.3	This
                                         Clause 5.3 is subject to Clauses 5.4 and 5.5. Upon termination of the Employment for
                                         any reason, any Share Buy-Out Award that has vested will be retained by the Executive
                                         and not lapse. If the Executive ceases to be an employee of the Group:

 

		5.3.1	because
                                         he is Dismissed for Cause or by reason of his voluntary resignation (i.e. in circumstances
                                         in which he is not entitled to resign without notice owing to the conduct of the Group),
                                         any Share Buy-Out Award which has not yet vested will lapse on the Termination Date;
                                         or

 

		5.3.2	for
                                         any other reason (including Absence Dismissal under Clause 11.3) any Share Buy-Out Awards
                                         which have not vested will not lapse and will vest on the vesting dates specified in
                                         the Share Buy-Out Awards subject to such performance conditions as are referred to in
                                         Clause 5.1.

 

		5.4	The
                                         Board may in its absolute discretion determine that the number of Shares over which a
                                         Share Buy-Out Award may vest may be reduced (to nil if appropriate) as a result of:

 

		5.4.1	the
                                         Lloyds Banking Group plc annual report and accounts having been materially restated at
                                         any time during the period between the grant of the Share Buy-Out

    	 

    	

    

Award
and the vesting date of the Share Buy-Out Award as a result of the conduct of the Executive other than material restatement due
to a change in accounting policy or to rectify a minor error;

 

		5.4.2	the
                                         Executive having, in the reasonable opinion of the Board, deliberately misled the management
                                         of the Lloyds Banking Group plc, the market and/or Lloyds Banking Group plc shareholders
                                         regarding the financial performance of Lloyds Banking Group plc at any time during the
                                         period between the grant of the Share Buy-Out Award and the vesting date of the Share
                                         Buy-Out Award;

 

		5.4.3	the
                                         Executive’s actions at any time during the period between the grant of the Share Buy-Out
                                         Award and the vesting date of the Share Buy-Out Award having, in the reasonable opinion
                                         of the Board, caused harm to the reputation of the Group; or

 

		5.4.4	any
                                         other factors considered by the Board to be relevant which are compliant with and no
                                         more onerous than requirements under the Financial Services Authority Code on Remuneration
                                         Practices.

 

		5.5	Any
                                         Share Buy-Out Awards granted in accordance with Clause 5.1 and any payment made in accordance
                                         with clause 5.8 must satisfy any relevant requirements of the FSA, including its Remuneration
                                         Code as amended from time to time.

 

		5.6	After
                                         signature of this Agreement, the Executive will at the Employer’s request use all
                                         reasonable endeavours to obtain such additional documents as are reasonably requested
                                         by the Employer from Santander and if there are any discrepancies between the arrangements
                                         agreed between the Executive and the Employer and the arrangements the Executive had
                                         at Santander, such discrepancies will be resolved between the parties in good faith and
                                         with the objective that the Executive is not overcompensated in relation to the Share
                                         Buy-Out Awards, any bonus award pursuant to Clause 3.3 and any payments pursuant
                                         to Clause 5.8.

 

		5.7	References
                                         in this clause to various Santander plans shall be to those plans as named and described
                                         in the form 20-F issued by Santander on 10 June 2010.

 

		5.8	In
                                         recognition that the Executive’s right to receive his delayed vesting compensation of
                                         an amount of £61,605 will lapse on the Executive accepting Employment with the
                                         Employer, the Employer shall pay to the Executive a sum of £20,535 on each of 31
                                         March 2011, 31 March 2012 and 31 March 2013. The payments shall be made subject to deduction
                                         of income tax and any other withholding obligations for which the Executive is liable
                                         and shall not be treated as salary or taken into account for the purposes of calculating
                                         bonus or other awards, pension contribution or benefits or any other benefits provided
                                         under this Agreement. Upon termination of the Employment for any reason, any outstanding
                                         payment under this clause will be retained by the Executive and not lapse. If the Executive
                                         ceases to be an employee of the Group:

 

		5.8.1	because
                                         he is Dismissed for Cause or by reason of his voluntary resignation (i.e. in circumstances
                                         in which he is not entitled to resign without notice owing to the conduct of the Group),
                                         any outstanding payment will lapse on the Termination Date; or

 

		5.8.2	for
                                         any other reason (including Absence Dismissal under Clause 11.3) any outstanding payment
                                         will not lapse and will be paid on the due date.

    	 

    	

    

		6	Holiday
                                         and Expenses

 

		6.1	The
                                         Executive shall be entitled during the Employment to 30 working days holiday in each
                                         calendar year plus bank holidays. Holiday may only be taken at such time or times as
                                         the Executive’s line manager shall approve. The Executive’s holiday entitlement
                                         shall be pro rated for the year in which the Employment begins and for the year in which
                                         the Employment ends.

 

		6.2	The
                                         Employer will refund to the Executive all reasonable expenses properly incurred by the
                                         Executive in performing the duties under this Agreement, provided that these are incurred
                                         in accordance with Employer’s policy from time to time. The Employer will require
                                         the Executive to produce receipts or other documents as proof for any expenses claimed.

 

		7	Confidentiality

 

		7.1	Without
                                         prejudice to the common law duties which the Executive owes to the Employer, the Executive
                                         agrees to preserve the confidentiality of any trade secrets and/or confidential information
                                         belonging or relating to the Employer or its employees or relating to the Works, in whatever
                                         form (written, oral, visual and electronic), whether of a technical or commercial nature,
                                         disclosed to the Executive by or on behalf of the Employer or its employees or otherwise
                                         comes under the control of the Executive in the course of the Employment (“Confidential
                                         Information”), and agrees not to (except in so far as may be strictly necessary
                                         for the proper performance of the duties under this Agreement or with the prior written
                                         consent of the Employer), copy, use, discuss with or disclose to any third party any
                                         Confidential Information. This provision will not apply to Confidential Information which
                                         becomes public other than through unauthorised disclosure by the Executive. The Executive
                                         will use best endeavours to prevent the unauthorised copying, use or disclosure of such
                                         information by any third party.

 

		7.2	In
                                         the course of the Employment the Executive is likely to obtain Confidential Information
                                         belonging or relating to other Group Companies or other persons. The Executive will treat
                                         such information as if it falls within the terms of Clause 7.1 and Clause 7.1 will apply
                                         with any necessary amendments to such information. If requested to do so by the Employer,
                                         the Executive will enter into an agreement with other Group Companies or any other persons
                                         in the same terms as Clause 7.1 with any amendments necessary to give effect to this
                                         provision.

 

		7.3	The
                                         Executive agrees not to, either during or after the termination of the Employment (without
                                         the written consent of the Employer) make any public announcement, statement or comment
                                         (whether to the media or otherwise) concerning:

 

		7.3.1	the
                                         affairs of the Employer or any other Group Company;

 

		7.3.2	the
                                         circumstances of the termination of the Employment and any offices (except he may disclose
                                         the reason for such termination to any prospective or future employer) with any other
                                         Group Company; or

 

		7.3.3	anything
                                         that may be detrimental to the Employer or any other Group Company, except as required
                                         by law or any regulatory body.

 

		7.4	Nothing
                                         in this Agreement will prevent the Executive from making a “protected disclosure”
                                         in accordance with the provisions of the Employment Rights Act 1996.

    	 

    	

    

		8	Intellectual
                                         Property Rights

 

		8.1	The
                                         Executive shall prepare, maintain and promptly disclose to the Employer immediately on
                                         creation full written details of all Works made, created or developed, wholly or partially,
                                         by the Executive at any time during the course of the Employment (whether or not during
                                         working hours or using Group premises or resources). The Executive acknowledges that
                                         all Intellectual Property Rights subsisting (or which may in the future subsist) in any
                                         Work shall automatically, on creation, vest in the Employer absolutely. To the extent
                                         that they do not vest automatically, the Executive hereby assigns (or where immediate
                                         assignment is not effective, agrees to assign) to the Employer, with full title guarantee,
                                         all the Executive’s Intellectual Property Rights in any Work. Pending assignment,
                                         the Executive shall hold the Intellectual Property Rights on trust for the Employer.
                                         The Executive agrees to promptly execute all documents and do all acts as may, in the
                                         opinion of the Employer, be necessary to give effect to this Clause 8.1.

 

		8.2	So
                                         far as permitted by applicable laws, the Executive hereby irrevocably waives all moral
                                         rights under Chapter IV (Moral Rights) of Part 1 of the Copyright, Designs and Patents
                                         Act 1988 (and all similar rights in other jurisdictions), which he may have or will have
                                         in any Work.

 

		8.3	The
                                         Executive hereby irrevocably appoints the Employer to act as the Executive’s attorney
                                         to do everything necessary to give the Employer the full benefit of the rights under
                                         this Clause 8.

 

		8.4	The
                                         rights and obligations of the parties under this Clause 8 shall continue after expiry
                                         or termination of this Agreement.

 

		9	Garden
                                         Leave and Suspension

 

Garden
Leave

 

		9.1	At
                                         any time after notice to terminate the Employment is given by either party, or if the
                                         Executive resigns without giving due notice and the Employer does not accept the Executive’s
                                         resignation, the Employer may require the Executive to take a period of absence called
                                         garden leave (the “Garden Leave Period”). The Garden Leave Period
                                         shall last for such period or periods of the notice period as the Employer shall in its
                                         absolute discretion determine. The provisions of Clause 9.2 to Clause 9.8 apply to any
                                         Garden Leave Period.

 

		9.2	During
                                         the Garden Leave Period the Executive will not, without prior written consent of their
                                         line manager, be employed or otherwise engaged in the conduct of any activity, whether
                                         or not of a business nature. The Employer will have no obligation to provide work to
                                         the Executive during the Garden Leave Period. Further, the Executive will not, unless
                                         requested by the Employer:

 

		9.2.1	enter
                                         or attend the premises of the Employer or any other Group Company; or

 

		9.2.2	contact
                                         or have any communication with any customer or client of the Employer or any other Group
                                         Company in relation to the business of the Employer or any other Group Company; or

 

		9.2.3	contact
                                         or have any communication with any employee, officer, director, agent or consultant of
                                         the Employer or any other Group Company in relation to the business of the Employer or
                                         any other Group Company; or

    	 

    	

    

		9.2.4	remain
                                         or become involved in any aspect of the business of the Employer or any other Group Company
                                         except as required by such companies.

 

		9.3	During
                                         the Garden Leave Period the Executive shall be available to deal with requests for information,
                                         be available for meetings (unless the Employer has agreed in writing that the Executive
                                         may be unavailable for a period) and to advise on matters relating to work.

 

		9.4	During
                                         the Garden Leave Period the Employer may require the Executive to comply with the provisions
                                         of Clause 12, except that there will be no requirement to return any company car in the
                                         possession of the Executive. The Employer may also require the Executive to resign immediately
                                         from any directorship held in the Employer, any other Group Company or any other company
                                         where such directorship is held as a consequence or requirement of the Employment, unless
                                         the Executive is required by the Employer to perform duties to which any such directorship
                                         relates in which case the Executive may retain such directorships while those duties
                                         are ongoing. The Executive hereby irrevocably appoints the Employer to be the Executive’s
                                         attorney to execute any instrument and do anything in the Executive’s name and
                                         on their behalf to effect the Executive’s resignation if the Executive fails to
                                         do so in accordance with this Clause 9.4

 

		9.5	During
                                         the Garden Leave Period, the Executive will be entitled to receive the salary and all
                                         contractual benefits in accordance with the terms of this Agreement. For the avoidance
                                         of doubt the Executive shall not be entitled to participate in any bonus or other such
                                         incentive scheme. Any unused holiday accrued at the commencement of the Garden Leave
                                         Period and any holiday accrued during any Garden Leave Period will be deemed to be taken
                                         by the Executive during the Garden Leave Period in relation to day(s) (not being a Saturday,
                                         Sunday, public or bank holiday) during which the Executive was not required to deal with
                                         information requests, attend a meeting or give advice.

 

		9.6	The
                                         Executive agrees and acknowledges that during any Garden Leave Period the Employer may
                                         appoint another person to carry out duties in substitution of the Executive.

 

		9.7	At
                                         the end of the Garden Leave Period, the Employer may, at its sole and absolute discretion,
                                         pay the Executive basic salary alone in lieu of the balance of any period of notice given
                                         by the Employer or the Executive (less any deductions the Employer is required by law
                                         to make).

 

		9.8	All
                                         duties of the Employment (whether express or implied), including, but not limited to,
                                         the Executive’s duties of fidelity, good faith and under Clauses 2.1, 2.2 and 2.3
                                         shall continue throughout the Garden Leave Period.

 

Suspension

 

		9.9	Without
                                         prejudice to the Executive’s rights to remuneration and other benefits hereunder,
                                         the Employer shall have the right at any time to require the Executive not to attend
                                         at any place of work or otherwise to suspend the Executive from the performance of any
                                         duties under this Agreement. During the period of such suspension the Employer may assign
                                         the Executive’s duties, titles or powers to another. Further, during such period
                                         of suspension the Employer shall be under no obligation to vest in or assign to the Executive
                                         any powers or duties or to provide any work to the Executive. For the avoidance of doubt,
                                         during any period of suspension the rights of the Employer and duties of the Executive
                                         set out in clauses 9.2 – 9.8 above shall apply (save that the Employer shall not
                                         require the Executive to resign from any directorships unless a complaint is made out
                                         against him and otherwise subject to any FSA or other regulatory requirements).

    	 

    	

    

		10	Restrictions
                                         after termination of Employment

 

		10.1	The
                                         Executive is likely to obtain Confidential Information and personal knowledge of and
                                         influence over employees of the Group during the course of the Employment. To protect
                                         these interests of the Employer, the Executive agrees with the Employer that the Executive
                                         will be bound by the following:

 

		10.1.1	subject
                                         to clause 10.2 throughout the Employment and during the period of 6 months commencing
                                         with the Relevant Date the Executive will not (either on their own behalf or with any
                                         other person, whether directly or indirectly) be employed in, or carry on (or be a director
                                         of any company engaged in) any business which, is or is about to be in competition with
                                         any business of the Employer (or any other Group Company) being carried on by such company
                                         at the Relevant Date provided the Executive was concerned or involved with that business
                                         to a material extent at any time during the 12 months prior to the Relevant Date;

 

		10.1.2	throughout
                                         the Employment and during the period of 12 months commencing on the Relevant Date the
                                         Executive will not (either on their own behalf or for or with any other person, whether
                                         directly or indirectly) entice or try to entice away from the Employer or (as the case
                                         may be) any other Group Company any Restricted Employee;

 

		10.1.3	throughout
                                         the Employment and during the period of 12 months commencing on the Relevant Date the
                                         Executive will not (either on their own behalf or for or with any other person, whether
                                         directly or indirectly) employ or engage or try to employ or engage any Restricted Employee;

 

		10.1.4	throughout
                                         the Employment and during the period of 12 months commencing on the Relevant Date the
                                         Executive will not (either on their own behalf or for or with any other person, whether
                                         directly or indirectly) canvass, solicit or attempt to entice away from the Employer
                                         or (as the case may be) any other Group Company any business of any Relevant Customer
                                         or Prospective Customer in respect of the Relevant Services; and

 

		10.1.5	throughout
                                         the Employment and during the period of 12 months commencing on the Relevant Date the
                                         Executive will not interfere or endeavour to interfere with the continuance of supplies
                                         to the Employer and/or any other Group Company or the terms relating to those supplies
                                         by any Relevant Supplier.

 

		10.2	In
                                         the event that the Employer gives notice to terminate the Executive’s employment
                                         and the Executive works 6 months or more of the Executive’s notice period, the
                                         Employer will not require the Executive to comply with Clause 10.1.1 above following
                                         the termination of the Executive’s employment.

 

		10.3	Following
                                         the Termination Date, the Executive will not hold out as being in any way connected with
                                         the businesses of the Employer or of any other Group Company (except to the extent agreed
                                         by such a company).

 

		10.4	Any
                                         benefit given or deemed to be given by the Executive to any Group Company under the terms
                                         of Clause 10 is received and held on trust by the Employer for the relevant Group Company.
                                         The Executive will enter into appropriate restrictive covenants directly with other Group
                                         Companies if asked to do so by the Employer.

 

		10.5	The
                                         Executive acknowledges that the provisions of this Clause are fair, reasonable and necessary
                                         in order to protect the Confidential Information and business connections of the

    	 

    	

    

Employer,
and any other Group Company, to which the Executive has access as a result of the Employment

 

		10.6	Each
                                         of the obligations in this Clause 10 is an entirely separate and independent restriction
                                         on the Executive. If any part is found to be invalid or unenforceable the remainder will
                                         remain valid and enforceable.

 

		10.7	The
                                         Executive acknowledges and agrees to draw the provisions of this Clause 10 to the attention
                                         of any third party who may at any time before or after the termination of the Employment
                                         offer to employ or engage the Executive in any capacity and for whom or with whom the
                                         Executive intends to work during the 12 months following the Termination Date.

 

		11	Termination

 

Summary
Dismissal

 

		11.1	The
                                         Employer may terminate the Employment at any time forthwith by written notice to the
                                         Executive (and without any requirement of prior notice) if the Executive shall:-

 

		11.1.1	commit
                                         any material breach, or continue (after written warning) to commit any breach, of the
                                         obligations under this Agreement;

 

		11.1.2	be
                                         guilty of any material misconduct or material neglect in the discharge of the duties;

 

		11.1.3	have
                                         a bankruptcy order made against them or make any arrangement or composition with the
                                         Executive’s creditors or have an interim order made against them pursuant to the
                                         Insolvency Act 1986 (or any re-enactment or amendment thereof for the time being in force);

 

		11.1.4	be
                                         convicted of any criminal offence (except any road traffice offence for which a non-custodial
                                         penalty is imposed) which in the reasonable opinion of the Employer affects the Executive’s
                                         position as an employee under this Agreement;

 

		11.1.5	bring
                                         the name or reputation of the Executive or Employer, or any Group Company into disrepute;

 

		11.1.6	be
                                         or become prohibited by law from becoming or remaining a director;

 

		11.1.7	be
                                         disqualified or disbarred from membership of, or be found to have committed any serious
                                         disciplinary offence by, or be found not to be a fit and proper person by, any professional
                                         or regulatory body governing the conduct of the Executive or the business of any Group
                                         Company;

 

		11.1.8	cease
                                         to have FSMA Approval;

 

		11.2	Where
                                         the Executive has been summarily dismissed or where the Executive terminates the Employment
                                         in breach of the notice provisions in Clause 1.3.2, the calculation of any payment in
                                         lieu of outstanding holiday entitlement owed by the Employer to the Executive shall be
                                         calculated as being £1.

 

Absence
Dismissal

 

		11.3	If
                                         the Executive (owing to sickness, injury or other similar incapacity) does not perform
                                         the duties under this Agreement for a period of at least 26 weeks (or at least 26 weeks
                                         in aggregate in any period of twelve months) the Employer shall be entitled to terminate
                                         the Employment by giving to the Executive not less than 3 months’ notice at any
                                         time while the

    	 

    	

    

Executive
does not perform the duties and the Executive shall have no claim for compensation or otherwise against the Employer by reason
of such termination.

 

Reconstructions
or amalgamation

 

		11.4	If
                                         employment of the Executive under this Agreement is terminated by reason of the liquidation
                                         of the Employer for the purpose of reconstruction or amalgamation and the Executive is
                                         offered employment with any concern or undertaking resulting from the reconstruction
                                         or amalgamation on terms and conditions materially no less favourable overall than the
                                         terms of this Agreement (and any written amendment thereto), then the Executive shall
                                         have no claim against the Employer in respect of the termination of the Employment (whether
                                         or not the notice required by Clause 1.3 shall have been given).

 

Payment
in lieu of notice

 

		11.5	The
                                         Employer may, at any time in its absolute discretion elect to terminate the Employment
                                         and this Agreement by paying to the Executive, in lieu of the notice period referred
                                         to in Clause 1.3 or any part thereof, an amount equivalent to the basic salary for such
                                         period or part period. Such a payment shall be subject to such deductions for tax and
                                         national insurance as are required by law and to any other authorised deductions.

 

		11.6	For
                                         the avoidance of doubt:-

 

		(i)	If
                                         the Employer terminates the Executive’s employment other than in accordance with
                                         its rights under this Agreement any entitlement to damages for breach of contract will
                                         be assessed on normal common law principles (including the Executive’s obligation
                                         to mitigate any losses); and

 

		(ii)	The
                                         right of the Employer to make a payment in lieu of notice does not give rise to any right
                                         for the Executive to receive such a payment.

 

		11.7	The
                                         Employer will pay any sums due under Clause 11.5 in monthly instalments over the period
                                         until the date on which notice, if it had been served in accordance with Clause 1.3,
                                         would have expired (the “Relevant Period”). The Executive is obliged
                                         to seek alternative income over the Relevant Period and to disclose the gross amount
                                         of any such income to the Employer as evidenced by payslips and/or invoices in a timely
                                         manner. The Employer’s monthly instalment payments pursuant to this Clause 11.7
                                         shall then be reduced by the gross amount of such alternative income earned in respect
                                         of any part of the Relevant Period. Payments shall be subject to such deductions for
                                         tax and national insurance contributions as are required by law and to any other authorised
                                         deductions.

 

		12	Return
                                         of Property

 

		12.1	The
                                         Executive will immediately upon the termination of the Employment return to the Employer
                                         at such place as the Employer may reasonably specify

 

		12.1.1	all
                                         documents and other materials (whether originals or copies) made or compiled by or delivered
                                         to the Executive during the Employment and concerning any Group Company, including any
                                         Confidential Information and will not retain any copies of such documents or materials;
                                         and

 

		12.1.2	all
                                         other property belonging or relating to any Group Company, in good condition (allowing
                                         for fair wear and tear).

    	 

    	

    

		13	Directorships

 

		13.1	The
                                         Executive’s office in any Group Company is subject to the Articles of Association
                                         of the relevant company (as amended from time to time). If the provisions of this Agreement
                                         conflict with the provisions of the Articles of Association, the Articles of Association
                                         will prevail.

 

		13.2	The
                                         Executive must resign from any office held in any Group Company if asked at any time
                                         to do so by the Employer.

 

		13.3	By
                                         entering into this Agreement, the Executive irrevocably appoints the Employer as attorney
                                         to act in the Executive’s name and on the Executive’s behalf to execute any
                                         document or do anything in the Executive’s name necessary to effect the Executive’s
                                         resignation in accordance with Clause 13.2. If there is any doubt as to whether such
                                         a document (or other thing) has been carried out within the authority conferred by this
                                         Clause 13.3, a certificate in writing (signed by any director or the secretary of the
                                         Employer) will be sufficient to prove that the act or thing falls within that authority.

 

		13.4	The
                                         termination of any directorship or other office held by the Executive will not terminate
                                         the Executive’s employment or amount to a breach of terms of this Agreement by
                                         the Employer.

 

		13.5	During
                                         the Employment the Executive will not do anything which could cause the Executive to
                                         be disqualified from continuing to act as a director of any Group Company.

 

		13.6	The
                                         Executive must not resign office as a director of any Group Company without the agreement
                                         of the Employer save that this restriction shall not prevent the Executive from resigning
                                         such office during any period of Garden Leave if the Executive reasonably considers his
                                         position and liability as an officer of the relevant company is materially prejudiced
                                         by the acts or omissions of its board or the Board.

 

		14	Disciplinary
                                         and Grievance Procedures

 

		14.1	Any
                                         disciplinary matter affecting the Executive will be dealt with by their line manager

 

		14.2	If
                                         the Executive has any grievance relating to their employment such grievance should be
                                         made in writing to their line manager. If the Executive is dissatisfied with their line
                                         manager’s treatment of the grievance, the matter may be referred to the Chief Executive
                                         or an alternative sufficiently senior Director.

 

		15	Miscellaneous
                                         Conditions of Employment

 

		15.1	The
                                         Staff Manual (People Policies and Practice)/HR policies and practice contains general
                                         information regarding policies and procedures currently in place, within the Group, which
                                         may be altered from time to time at the sole discretion of the Employer. These do not
                                         form part of this Agreement except for the following provisions:-

 

	 	LTSB
    Heritage	 	HBOS
    Heritage
	 	 	 	 	 
	 	15.1.1	Group
    Security Policy	 	Group
    Security Policy
	 	 	 	 	 
	 	15.1.2	Personal
    Account Dealing	 	Personal
    Integrity and Conduct Policy
	 	 	 	 	 
	 	15.1.3	Sick
    Pay	 	Sick
    Pay and Procedure

    	 

    	

    

	 	15.1.4	Sickness
    absence reporting	 	Health
    Wellbeing and Attendance
	 	 	 	 	 
	 	15.1.5	Smoking
    Policy	 	Management
    Policy and Procedures

 

If
there is any conflict between this Agreement and such provisions, then this Agreement shall prevail.

 

		15.2	There
                                         are no collective agreements affecting the employment of the Executive.

 

		16	Contracts
                                         (Rights of Third Parties) Act 1999 and Data Protection Act 1998

 

		16.1	No
                                         person other than the parties to this Agreement or any Group Company shall have any right
                                         to enforce any term of this Agreement under The Contracts (Rights of Third Parties) Act
                                         1999.

 

		16.2	For
                                         the purposes of the Data Protection Act 1998 (the “Act”) the Executive consents
                                         to the holding, processing and disclosure of personal data (including sensitive data
                                         within the meaning of the Act) provided by the Executive to the Employer for all purposes
                                         relating to the performance of this Agreement including, but not limited to:

 

		16.2.1	administering
                                         and maintaining personnel records;

 

		16.2.2	paying
                                         and reviewing salary and other remuneration and benefits;

 

		16.2.3	providing
                                         and administering benefits (including if relevant, pension, life assurance, permanent
                                         health insurance and medical insurance);

 

		16.2.4	undertaking
                                         performance appraisals and reviews;

 

		16.2.5	maintaining
                                         sickness and other absence records;

 

		16.2.6	taking
                                         decisions as to the Executive’s fitness for work;

 

		16.2.7	providing
                                         references and information to future employers, and if necessary, governmental and quasi-governmental
                                         bodies for social security and other purposes, Her Majesty’s Revenue and Customs
                                         and the Contributions Agency;

 

		16.2.8	providing
                                         information to future purchasers of the Employer or of the business in which the Executive
                                         works; and

 

		16.2.9	transferring
                                         information concerning the Executive to a country or territory outside the EEA.

 

The
Executive acknowledges that during the employment the Executive will have access to and process, or authorise the processing of
personal data and sensitive personal data relating to employees, customers and other individuals held and controlled by the Employer.
The Executive agrees to comply with the terms of the Act in relation to such data and to abide by the Employer’s data protection
policy issued from time to time.

 

		17	Other
                                         Agreements

 

		17.1	This
                                         Agreement shall be in substitution for all existing contracts of service or consultancy
                                         between the Employer or any Group Company and the Executive, which (without prejudice
                                         to any accrued rights) shall be treated as cancelled with effect from the Commencement
                                         Date.

 

		17.2	This
                                         Agreement comprises the whole agreement between the Employer and the Executive relating
                                         to the Employment, to the exclusion of all other warranties, representations made in
                                         good faith, undertakings and collateral contracts.

    	 

    	

    

		18	Notices

 

Any
notice under this Agreement shall be in writing and shall either be given personally or be sent by prepaid first class post by
the Employer to the Executive at their home address notified to the Employer pursuant to Clause 2.1 or at any other last known
UK residential address, or by the Executive to the Employer at its address stated above or its other last known address. Any notice
sent by the Employer by post shall be deemed to have been received two business days after the date of posting.

 

		19	Interpretation

 

General

 

		19.1	In
                                         this Agreement:

 

		19.1.1	where
                                         the context permits, references to the singular shall include references to the plural
                                         and vice versa;

 

		19.1.2	the
                                         Employer’s Staff Manual shall mean the current manual of the Employer entitled
                                         “People Policies and Practice”/HR Policies and Practice, as may be amended
                                         or replaced by the Employer from time to time at its sole and absolute discretion. Upon
                                         any amendment or replacement, the references to the sections of the now current Employer’s
                                         Staff Manual/HR Policies and Practice in Clause 15.1 shall be construed so as to be references
                                         to the provisions of the amended or replaced Employer’s Staff Manual dealing with
                                         the same subject matter;

 

		19.1.3	references
                                         to a Clause mean a Clause in this Agreement;

 

		19.1.4	Clause
                                         headings are inserted for convenience only and shall not affect the construction of this
                                         Agreement.

 

Definitions

 

		19.2	In
                                         this Agreement unless the context otherwise requires:

 

“Board”
means board of directors of the Employer or any duly authorised committee of the same;

 

“Commencement
Date” has the meaning given in Clause 1.3;

 

“Confidential
Information” has the meaning given in Clause 7.1;

 

“Dismissal
for Cause” shall include termination of the Executive’s employment:-

 

		(a)	on
                                         any grounds listed in Clause 11.1; or

 

		(b)	for
                                         any reason relating to the Executive’s performance or conduct where the Board in good
                                         faith considers that the Executive has failed or is failing to perform and/or conduct
                                         himself to the standard expected by the Board; or in any other circumstances where the
                                         Board in good faith considers that it is in the best interests of Lloyds Banking Group
                                         plc that the Executive’s employment be terminated;

 

“Employment”
has the meaning given in Clause 1.1;

 

“FSA”
means the Financial Services Authority and/or any successor regulatory body or bodies relevant to the Employer’s business
from time to time;

    	 

    	

    

“FSMA
2000” means the Financial Services and Markets Act 2000, as amended and in force from time to time, and/or any legislation
which re-enacts or consolidates or modifies such legislation from time to time or otherwise replaces such legislation in respect
of the FSA;

 

“FSMA
Approval” has the meaning given in Clause 1.2.

 

“Garden
Leave Period” has the meaning given in Clause 9.1;

 

“Group
Company” means any of Lloyds Banking Group plc and its subsidiaries (as such terms are defined in the Companies Act
2006), and “Group” means all of them;

 

“Intellectual
Property Rights” means all intellectual property rights, and interests in or to intellectual property rights, which
may subsist in any part of the world, including where such rights are or may be obtained or enhanced by registration, any registrations,
applications for registrations and rights to apply for registration of such intellectual property rights;

 

“Prospective
Customer” means any person, firm or company which has been engaged in negotiations, with which the Executive
has been personally involved, with the Employer or any other Group Company with a view to purchasing products or services from
the Employer or any other Group Company during the period of 6 months prior to the Relevant Date;

 

“Relevant
Customer” means any person, firm or company which at any time during the 12 months prior to the Relevant Date was a
customer of the Employer or any other Group Company, with whom or which the Executive dealt other than in a de minimis way or
for whom or which the Executive was responsible in a supervisory or managerial capacity on behalf of the Employer or any other
Group Company at any time during the said period;

 

“Relevant
Date” means (i) in the case of Clause 10.1.1 the earlier of the date the Executive gives notice to terminate his employment,
the Termination Date or the date on which the Executive commences any Garden Leave Period; and (ii) in the case of Clauses 10.1.2
to 10.1.5 the Termination Date, or if earlier, the date on which the Executive commences any Garden Leave Period;

 

“Relevant
Services” products and services competitive with those supplied by the Employer or any other Group Company at any time
during the 12 months prior to the Relevant Date in the supply of which the Executive was involved or concerned other than in a
de minimis way at any time during the said period;

 

“Relevant
Supplier” means any person, firm or company which at any time during the 12 months prior to the Relevant Date was a
supplier of any goods or services (other than utilities and goods or services supplied for administrative purposes) to the Employer
or any Group Company and with whom or which the Executive had personal dealings during the Employment other than in a de minimis
way;

 

“Restricted
Employee” means any person who is at the Relevant Date or was at any time during the period of 12 months prior to the
Relevant Date employed or engaged as a consultant in the Group in an executive or senior managerial capacity or who reported directly
to the Executive and with whom the Executive has had dealings other than in a de minimis way during the course of the Employment;

 

“Santander”
means Banco Santander, S.A.;

 

“Santander
shares” means shares of Capital Stock in Santander, par value Euro 0.50 each;

    	 

    	

    

“Termination
Date” means the date on which the Employment terminates; and

 

“Work(s)”
means any idea, method, discovery, invention, technical or commercial information, know-how, computer program, semiconductor chip
layout, database, drawing, literary work, product, packaging, design, marketing concept, trade or service mark, logo, domain name
and all similar works (whether registrable or not and whether copyright works or not) made, created, or developed by the Executive,
either alone or with others, during the term of the Employment (whether in or outside the course of the Executive’s duties),
which relates to, or is capable of being used in, the business of the Employer or any Group Company.

 

		20	Governing
                                         Law and Jurisdiction

 

This
Agreement is governed by and will be interpreted in accordance with the law of England and Wales. Each of the parties submits
to the exclusive jurisdiction of the English courts as regards any claim or matter arising under this Agreement.

 

EXECUTED
by the Executive and a representative of the Employer duly and fully authorized by the Board of the Employer to enter into this
Agreement on the first date mentioned above.

 

	EXECUTED
    as a DEED by the 

    Executive

    Juan Colombas

    in the presence of:	}	 
	 	 	 
	Witness’s
    signature	 	 
	 	 	 
	Name	 	 
	Address	 	 
	 	 	 
	 	 	 
	Occupation	 	 
	 	 	 
	 	 	 

	

        SIGNED on behalf of the Employer:

in the presence
    of:	}Exhibit 4.1

 

EXECUTION COPY

 

 

 

 

 

 

SAFE BULKERS, INC.

 

- and -

 

SAFETY MANAGEMENT OVERSEAS S.A.

 

MANAGEMENT AGREEMENT

 

 

 

 

 

    	 

    	

    

TABLE OF CONTENTS

 

	 	 	 	 	Page
	 	 	 	 	
	ARTICLE I	 	INTERPRETATION	 	1
	ARTICLE II	 	APPOINTMENT	 	5
	ARTICLE III	 	THE PARENT’S GENERAL OBLIGATIONS	 	6
	ARTICLE IV	 	THE MANAGER’S GENERAL OBLIGATIONS	 	7
	ARTICLE V	 	ADMINISTRATIVE SERVICES	 	9
	ARTICLE VI	 	COMMERCIAL SERVICES	 	11
	ARTICLE VII	 	INSURANCE	 	11
	ARTICLE VIII	 	AVAILABILITY OF OFFICERS	 	12
	ARTICLE IX	 	MANAGEMENT FEES AND EXPENSES	 	13
	ARTICLE X	 	BUDGETS, CORPORATE PLANNING AND EXPENSES	 	15
	ARTICLE XI	 	LIABILITY AND INDEMNITY	 	17
	ARTICLE XII	 	RIGHTS OF THE MANAGER, RESTRICTIONS ON THE MANAGER’S AUTHORITY, AND NON-COMPETE PROVISIONS	 	18
	ARTICLE XIII	 	TERMINATION OF THIS AGREEMENT	 	20
	ARTICLE XIV	 	CHANGE IN CONTROL OF THE MANAGER AND RIGHT OF FIRST OFFER	 	22
	ARTICLE XV	 	NOTICES	 	23
	ARTICLE XVI	 	APPLICABLE LAW	 	24
	ARTICLE XVII	 	ARBITRATION	 	24
	ARTICLE XVIII	 	MISCELLANEOUS	 	25
	 	 	 	 	 
	APPENDIX I	 	Form of Hajioannou Restrictive Covenant Agreement	 	 
	APPENDIX II	 	Form of Other Restrictive Covenant Agreement	 	 
	APPENDIX III	 	Form of Shipmanagement Agreement	 	 
	APPENDIX IV	 	Form of Supervision Agreement	 	 

    	-i-

    	

    

THIS MANAGEMENT AGREEMENT (this “Agreement”)
is made on the 29 day of May, 2008, BY AND BETWEEN:

 

(1)     SAFE BULKERS, INC., a company organized
and existing under the laws of the Republic of the Marshall Islands (the “Parent”);
and

 

(2)     SAFETY MANAGEMENT OVERSEAS S.A., a
company organized and existing under the laws of the Republic of Panama (the “Manager”).

 

WHEREAS:

 

(A)     The Parent directly or indirectly wholly
owns or will wholly own (i) the corporations identified on Schedule A hereto, as such Schedule A may be amended from time to time
(the “Shipowning Subsidiaries”), each of which owns or will own one
or more Drybulk Vessels (as defined below) (the “Vessels”) and (ii)
the corporations identified on Schedule B hereto, as such Schedule B may be amended from time to time (together with the Shipowning
Subsidiaries, the “Subsidiaries”).

 

(B)     The Manager has the benefit of expertise
in the technical and commercial management of Drybulk Vessels and administration of shipowning companies generally.

 

(C)     The Parent and the Manager desire to
adopt this Agreement, pursuant to which the Manager shall represent the Group (as defined below) in its dealings with third parties
and provide either directly or through a Submanager (as defined below) technical, commercial, administrative and certain other
services to the Group as specified herein in connection with the management and administration of the business of the Group.

 

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

 

Article
I

 

INTERPRETATION

 

Section
1.1 In this Agreement, unless the context otherwise requires:

 

“Affirmative
Response” shall have the meaning set forth in Section 14.4(b).

 

“Affiliates”
means, with respect to any Person as at any particular date, any other Persons that directly or indirectly, through one or more
intermediaries, are Controlled by, Control or are under common Control with the Person in question, and “Affiliate”
means any one of them.

 

“Agreement”
shall have the meaning set forth in the preamble.

    	 

    		2

    

“Approved
Budget” shall have the meaning set forth in Section 10.3.

 

“Board
of Directors” means the board of directors of the Parent as the same may be constituted from time to time.

 

“Business
Days” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; Cyprus;
and New York, New York.

 

“Change
in Control of the Parent” means the occurrence of any of the following events: (a) if any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either
of the foregoing), including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act (other than one or more Hajioannou Entities) (collectively, an “Acquiring
Person”), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 40% or more of the total voting power of the outstanding voting securities of the Parent, and such percentage
represents a higher percentage of such voting power than the Hajioannou Entities, collectively; or (b) the approval by the shareholders
of the Parent of a proposed merger, consolidation, recapitalization or similar transaction, as a result of which any Acquiring
Person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
40% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction,
and such percentage represents a higher percentage of such voting power than the Hajioannou Entities, collectively; or (c) a change
in directors after which a majority of the members of the Board of Directors are not Continuing Directors. For purposes of this
definition, such person or group shall be deemed to beneficially own any outstanding voting securities of a corporation held by
any other corporation (the “parent corporation”) so long as such person or group beneficially owns, directly or indirectly,
in the aggregate a majority of the total voting power of the outstanding voting securities of such parent corporation.

 

“Control”
or “Controlled” means, with respect to any Person, the right to elect
or appoint, directly or indirectly, a majority of the directors of such Person or a majority of the Persons who have the right,
including any contractual right, to manage and direct the business, affairs and operations of such Person, or the possession of
the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities,
by contract, or otherwise.

 

“Consent
of the Parent” means the prior written consent of a majority of the Independent Directors of the Parent.

 

“Continuing
Directors” means, as of any date of determination, any member of the Board of Directors who (i) was a member of
the Board of Directors immediately after the Effective Date, or (ii) was nominated for election or elected to the Board of Directors
with the approval of a majority of the directors then still in office who were either directors immediately after the Effective
Date or whose nomination or election was previously so approved.

    	 

    		3

    

“Crew”
shall have the meaning set forth in clause 1 of each Shipmanagement Agreement.

 

“Draft
Budget” shall have the meaning set forth in Section 10.1.

 

“Drybulk
Vessel” means any ocean-going vessel (including any Newbuild) that is intended to be used primarily to transport
non-liquid cargoes of commodities shipped in an unpackaged state.

 

“Drybulk
Vessel Business” means any business involved in the ownership or operation of Drybulk Vessels.

 

“Effective
Date” means the date upon which the initial public offering of the Parent is consummated.

 

“Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

“Executive
Officers” means the Chief Executive Officer, the President, the Chief Operating Officer and the Chief Financial
Officer of the Parent, and/or such other officers that may be agreed by the parties hereto after the date of this Agreement from
time to time.

 

“First
Offer Notice” shall have the meaning set forth in Section 14.4(a).

 

“First
Offer Period” shall have the meaning set forth in Section 14.4(b).

 

“Force
Majeure” shall have the meaning set forth in Section 11.1.

 

“Group”
means, at any time, the Parent and the Subsidiaries at such time taking into account the Schedule A and Schedule B in effect at
such time and “member of the Group” shall be construed accordingly.

 

“Hajioannou
Entities” means Polys Hajioannou, Nicolaos Hadjioannou, Vorini Holdings Inc. and Machairiotissa Holdings Inc.
and any entity controlled by, or under common control with, any such individual or entity or any trust established for the benefit
thereof.

 

“Hajioannou
Restrictive Covenant Agreement” means the Restrictive Covenant Agreement substantially in the form attached hereto
as Appendix I among Polys Hajioannou, Vorini Holdings Inc., Machairiotissa Holdings Inc., SafeFixing Corporation and the Parent.

 

“Independent
Directors” means those members of the Board of Directors that qualify as independent directors within the meaning
of Rule 10A-3 promulgated under the Exchange Act and the rules adopted thereunder and the listing criteria of the New York Stock
Exchange.

    	 

    		4

    

“Initial
Term” shall have the meaning set forth in Section 13.1.

 

“Management
Fee” shall have the meaning set forth in Section 9.1.

 

“Management
Services” shall have, in relation to a Vessel, the meaning set forth in clause 1 of the Shipmanagement Agreement
applicable to such Vessel.

 

“Manager”
shall have the meaning set forth in the preamble.

 

“Manager
Competitive Activities” shall have the meaning set forth in Section 12.4(a).

 

“Manager
Related Parties” shall have the meaning set forth in Section 11.2.

 

“Manager
Restricted Period” shall have the meaning set forth in Section 12.4(a).

 

“Negative
Response” shall have the meaning set forth in Section 14.4(b).

 

“Newbuild”
means a new vessel to be or which has just been constructed, or is under construction, which a member of the Group has agreed to
acquire pursuant to a shipbuilding contract, memorandum of agreement or otherwise.

 

“Other
Restrictive Covenant Agreements” means the Restrictive Covenant Agreements substantially in the form attached
as Appendix II to be entered into by the Parent and each of Polys Hajioannou and Nicolaos Hadjioannou.

 

“Parent”
shall have the meaning set forth in the preamble.

 

“Person”
means an individual, corporation, limited liability company, partnership, joint venture, trust or trustee, unincorporated organization,
association, governmental authority or other entity.

 

“Proposed
Change in Control of the Manager” means (a) the approval by the board of directors of the Manager or the shareholders
of the Manager of a proposed sale of all or substantially all of the assets or property of the Manager necessary for the performance
of its services under this Agreement, (b) the approval by the shareholders of the Manager of a proposed sale of the Manager’s
shares that would result in the Hajioannou Entities owning less than 80% of the outstanding voting securities of the Manager or
(c) the approval by the shareholders of the Manager of a proposed merger, consolidation, recapitalization or similar transaction,
as a result of which the Hajioannou Entities would beneficially own less than 80% of the outstanding voting securities of the resulting
entity following such transaction.

 

“Questioned
Items” shall have the meaning set forth in Section 10.2.

 

“Services”
shall have the meaning set forth in Section 2.3.

    	 

    		5

    

“Shipmanagement
Agreement” shall have the meaning set forth in Section 3.2.

 

“Shipowning
Subsidiaries” shall have the meaning set forth in the recitals.

 

“STCW
95” means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers,
1978, as amended in 1995 or any subsequent amendment thereto.

 

“Submanager”
shall have the meaning set forth in Section 2.4.

 

“Subsequent
Term” shall have the meaning set forth in Section 13.1.

 

“Subsidiaries”
shall have the meaning set forth in the recitals.

 

“Supervision
Agreement” shall have the meaning set forth in Section 3.3.

 

“Term”
shall have the meaning set forth in Section 13.1.

 

“Vessels”
shall have the meaning set forth in the recitals.

 

Section
1.2 The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning
hereof.

 

Section
1.3 All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and
their respective successors and assigns.

 

Section
1.4 In the event of any conflict between this Agreement, any Shipmanagement Agreement or any Supervision
Agreement, the provisions of this Agreement shall prevail.

 

Section
1.5 Unless otherwise specified, all references to money refer to the legal currency of the United States of
America.

 

Section
1.6 Unless the context otherwise requires, words in the singular include the plural and vice versa.

 

Article
II

APPOINTMENT

 

Section
2.1 The Manager is hereby appointed by the Parent as the administrative manager of the Group and hereby accepts any
such appointment on the terms and conditions of this Agreement.

 

Section
2.2 The Manager shall be appointed by (a) each Shipowning Subsidiary pursuant to the provisions of Section 3.3
hereof as the technical and commercial manager of each such Shipowning Subsidiary’s Vessel on the terms

    	 

    		6

    

 and conditions of the relevant Shipmanagement
Agreement and this Agreement and (b) each member of the Group acquiring a Newbuild, as the supervisor of the construction thereof
on the terms and conditions of the relevant Supervision Agreement and this Agreement.

 

Section
2.3 The Manager undertakes to use its best endeavors to provide:

 

(a)
the services specified in Articles V, VI, VII and VIII of this Agreement;

 

(b)
the services specified in each Supervision Agreement; and

 

(c)
the Management Services in respect of each Vessel specified in each Shipmanagement Agreement (the services to be
provided under Sections 2.3(a), 2.3(b) and 2.3(c) collectively the “Services”).

 

Section
2.4 The Manager may upon notice to the Parent appoint any Person (a “Submanager”)
at any time throughout the duration of this Agreement to discharge any of the Manager’s duties under this Agreement, provided
that if such Person is not an Affiliate of the Manager, the Manager shall obtain the Consent of the Parent prior to such
appointment (such Consent of the Parent not to be unreasonably withheld or delayed).

 

Section
2.5 The Manager’s power to delegate performance of any provision of this Agreement hereunder is without
prejudice to the Manager’s liability to the Parent to perform this Agreement with the intention that the Manager shall
remain responsible to the Parent for the due and timely performance of all duties and responsibilities of the Manager
hereunder PROVIDED HOWEVER that to the extent that any Submanager has performed any such duty, the Manager shall not be under
any obligation to perform again the same duty.

 

Article
III

THE PARENT’S GENERAL OBLIGATIONS

 

Section
3.1 The Parent shall notify the Manager as soon as possible of any purchase of any vessel (whether the same is a
second-hand vessel or a Newbuild), the delivery of any Newbuild from the relevant builder or intermediate seller to the
relevant member of the Group to take ownership of such Newbuild, the sale of any Vessel, the purchase or creation of any
direct or indirect subsidiary of the Parent or the sale or divestiture of any Subsidiary and shall promptly amend Schedule A
and Schedule B hereto, as applicable, to be reflective of any such development. Such amended Schedule A or Schedule B shall
be effective on any such day as mutually agreed by the Parent and the Manager, which date shall be no later than five
Business Days after delivery of such amended Schedule A and/or Schedule B to the Manager by the Parent.

 

Section
3.2 For each Vessel the Parent shall cause the Shipowning Subsidiary that owns such Vessel to enter with the
Manager into a contract substantially in

    	 

    		7

    

the form attached hereto as Appendix III (each
a “Shipmanagement Agreement” and, collectively, the “Shipmanagement
Agreements”), with such alterations and additions as are agreed by the Manager and such Shipowning Subsidiary
to be appropriate; provided that any alterations or additions which materially vary from such form shall require the approval
of the Board of Directors.

 

Section
3.3 For each Newbuild the Parent shall, or shall procure that the relevant member of the Group that owns or has
agreed to acquire such Newbuild shall, enter with the Manager into a contract substantially in the form attached hereto as
Appendix IV (each a “Supervision Agreement” and, collectively,
the “Supervision Agreements”), with such alterations and
additions as are agreed by the Manager and such member of the Group to be appropriate, having regard to the terms and
conditions of the particular shipbuilding contract, memorandum of agreement or other agreement relating to the acquisition of
the relevant Newbuild; provided that any alterations or additions which materially vary from such form shall require
the approval of the Board of Directors.

 

Section
3.4 The Parent shall pay, or shall cause another member of the Group to pay, all sums due to the Manager
punctually in accordance with the terms of this Agreement, any Shipmanagement Agreement and/or any Supervision Agreement.

 

Section
3.5 The Parent shall procure that each other member of the Group (a) performs its obligations under any
Shipmanagement Agreement or any Supervision Agreement to which it is a party and (b) does not take any action or omits to
take any action the effect of which is to cause the Parent or the Manager or any Submanager to be in breach of this
Agreement, any Shipmanagement Agreement and/or any Supervision Agreement.

 

Article
IV

THE MANAGER’S GENERAL OBLIGATIONS

 

Section
4.1 In the exercise of its duties hereunder, the Manager shall act fully in accordance with the reasonable
policies, guidelines and instructions from time to time communicated to it in writing by any member of the Group, exercising
skill and diligence to carry out its duties under this Agreement according to sound technical and commercial shipmanagement
standards.

 

Section
4.2 The Manager shall act and do all and/or any of the following acts or things described in this Agreement and
the relevant Shipmanagement Agreement or, as the case may be, Supervision Agreement applicable to each Vessel in the name
and/or on behalf of the Parent and/or, as the context may require, the relevant Subsidiary.

 

Section
4.3 The Manager acknowledges that the services it will provide pursuant to the Shipmanagement Agreements and the
Supervision Agreements are not limited to the services described in such agreements and include those set forth in this
Agreement.

    	 

    		8

    

Section
4.4 The Manager shall ensure that all material property of any member of the Group is clearly identified as such,
held separately from the property of the Manager and, where applicable, held in safe custody.

 

Section
4.5 The Manager shall ensure that adequate manpower is employed by it to perform its obligations under this
Agreement, PROVIDED HOWEVER, that the Manager, in the performance of its responsibilities under this Agreement, shall be
entitled to have regard to its overall responsibilities in relation to the management of its clients and in particular,
without prejudice to the generality of the foregoing, the Manager shall be entitled to allocate available resources and
services in such manner as in the prevailing circumstances the Manager considers to be fair and reasonable.

 

Section
4.6 Notwithstanding anything to the contrary contained in this Agreement, any Shipmanagement Agreement or any
Supervision Agreement, the Manager agrees that any and all decisions of a material nature relating to the Parent, any
Subsidiary, or any Vessel shall be reserved to the Parent, such decisions including, but not being limited to:

 

(a) the
purchase and/or sale of shares in any entity or other assets of a material nature;

 

(b) the
purchase or formation of subsidiaries;

 

(c) the
entry into guarantees or loans or other forms of financing and any and all financial undertakings and commitments connected
therewith;

 

(d)
the entry into and/or termination or amendment of any contractual relationships between any member of the Group
and a third party or another member of the Group; and

 

(e) the
presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition for an amount exceeding
$100,000 or its equivalent.

 

Section
4.7 During the Term, the Manager shall promote the business of the Group in accordance with the directions of the
authorized representative of the respective member of the Group and shall at all times use its best efforts to conform to and
comply with the lawful and reasonable directions, regulations or recommendations made by such authorized representative, and
in the absence of any specific directions or recommendations as aforesaid and, subject to the terms and conditions of this
Agreement, shall provide general administrative and advisory services in connection with the management of the business of
the Group.

 

Section
4.8 The Manager, in the performance of its responsibilities under this Agreement, any Supervision Agreement or any
Shipmanagement Agreement, shall ensure that any purchases of products or services from any of its affiliates or any other
related entity shall be on terms no less favorable to the Manager than the market prices for products or services that the
Manager could obtain on an arm’s-length basis from unrelated third parties.

    	 

    		9

    

Section
4.9 During the term hereof, the Manager agrees that, except as provided in Section 12.4(b), it will provide the
services in this Agreement to the Group on an exclusive basis and, without receiving the Consent of the Parent, it will not
provide any Services or other services contemplated herein to any entity other than the Parent and each Subsidiary.

 

Section
4.10 If a Vessel and a Drybulk Vessel directly or indirectly owned or operated by any of the Hajioannou Entities
(other than through the Parent or to the extent that such Hajioannou Entity is no longer subject to a Restrictive Covenant
Agreement) are both available and meet the criteria for a charter being fixed by the Manager, the Vessel shall receive such
charter.

 

Section
4.11 The Manager shall at all times maintain and keep true and correct accounts as regards the Services and shall
make the same available for inspection and auditing by the Parent at such times as may be mutually agreed by the Manager, on
the one hand, and the Parent, on the other hand.

 

Article
V

ADMINISTRATIVE SERVICES

 

Section
5.1 The Manager shall provide certain general administrative services to the Group, including, but not limited to,
the following:

 

(a) keeping
all books and records of things done and transactions performed on behalf of any member of the Group as it may require from
time to time, including, but not limited to, liaising with accountants, lawyers and other professional advisors;

 

(b) except
as otherwise contemplated herein, representing any member of the Group generally in its dealings and relations with third
parties;

 

(c)
maintaining the general ledgers of the Group, reconciliation of the Group’s bank accounts, preparation of
periodic financial statements, including, but not limited to, those required for governmental and regulatory or
self-regulatory agency filings and reports to shareholders, arranging for the audit of any such financial statements and the
provision of related data processing services;

 

(d)
providing assistance in the preparation of periodic and other reports, proxy statements, registration statements
and other documents and reports required by applicable law or the rules of any securities exchange or inter-dealer quotation
system on which the securities of the Parent or any member of the Group may be listed or quoted;

 

(e)
preparing and providing all tax returns required by any law or regulatory authority and developing, maintaining
and monitoring internal audit controls, disclosure controls and information technology for the Group;

    	 

    		10

    

(f) appointing
lawyers, at the Parent’s cost, for providing all legal services to ensure that each member of the Group is in
compliance with all applicable laws, including all relevant securities laws, and owns or possesses all licenses, patents,
copyrights and trademarks which are necessary and used in the operation of its business;

 

(g)
appointing lawyers, at the Parent’s cost, for providing for the presentation, negotiation, settlement,
prosecution or defense of any claim, demand or petition on behalf of any member of the Group arising in connection with the
business of any member of the Group for an amount not exceeding $100,000 or its equivalent, including the pursuit by any
member of the Group of any rights of indemnification or reimbursement;

 

(h)
providing advice to the Group with respect to financing, including entering into negotiations with banks or other
financial institutions for the purpose of arranging financing for the Parent and its Subsidiaries and the monitoring and
administration of compliance with any applicable financing terms and conditions in effect with investors, banks or other
financial institutions;

 

(i) assisting
with arranging board meetings, director accommodation and travel for board meetings and preparing meeting materials and
detailed papers and agendas for scheduled meetings of the Board of Directors or the board of directors of any other member of
the Group (and any and all committees thereof) that, where applicable, contain such information as is reasonably available to
the Manager to enable the Board of Directors or such other board of directors (and any such committees) to base their
opinion;

 

(j) preparing
or causing to be prepared reports to be considered by the Board of Directors (or any applicable committee thereof) in
accordance with the Parent’s internal policies and procedures on any acquisition, investment or sale of any part of the
business;

 

(k) administering
payroll services, benefits and director’s or consultant’s fees, as applicable, for any employee, officer,
consultant or director of any member of the Group;

 

(l)
at the request of the Parent, negotiating and arranging for cash management services, financing and hedging
arrangements relating to interest rates, currency exchange rates and commodity prices;

 

(m)
handling general and administrative expenses of the Parent, which are related to its operation as public company
and, upon being provided by the Parent with funds in accordance with the terms of Article X of this Agreement, arranging for
the payment of the same;

 

(n) appointing
lawyers, at the Parent’s cost, for handling all administrative and clerical matters in respect of (i) the calling and
arrangement of all annual and/or special meetings of shareholders of the Parent, (ii) the preparation of all materials
(including notices of meetings and information circulars) in respect thereof and (iii) the submission of all such materials
to the Parent in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that
the Parent has full opportunity to review, approve, execute and return them to the Manager for filing or mailing or other
disposition as the Parent may require or direct;

    	 

    		11

    

(o) providing,
at the request and under the direction of the Parent, such communications to the transfer agent for the Parent as may be
necessary or desirable; and

 

(p)
providing any such other administrative services as the Parent, the authorized Executive Officers or any other
representative of the Parent may request and the Manager may agree to provide from time to time.

 

Article
VI

COMMERCIAL SERVICES

 

Section
6.1 The Manager shall provide the following commercial services to the Group:

 

(a) performing
class records review and physical inspections in connection with any vessel to be purchased by a member of the Group;

 

(b)
at the request and under the direction of the Parent, providing administrative services in connection with the
purchase of a second-hand vessel or the acquisition or sale of a Newbuild, in either case by any member of the Group,
including, if specifically instructed by the Parent in writing, signing any agreed form of memorandum of agreement,
shipbuilding contract or other similar contract for and on behalf of the relevant member of the Group; and

 

(c)
at the request of the Parent, providing certain services in connection with a member of the Group taking physical
delivery of a vessel or registering a vessel or deleting a Vessel from the applicable port of registry on behalf of the
relevant member of the Group.

 

Article
VII

INSURANCE

 

Section
7.1 In addition to any duties of the Manager to insure the Vessels as provided in clause 3.4 of each Shipmanagement
Agreement, the Manager shall:

 

(a) arrange
either directly or, through insurance brokers appointed by the Manager, to effect Director’s & Officers
Liability insurance for the Board of Directors and Executive Officers with such insurance companies, at such rates and
otherwise on such other terms as the Parent shall have instructed and/or agreed upon;

 

(b)
on request, provide the Parent with a copy of any insurance claims and any reports prepared by the relevant
insurers; and

    	 

    		12

    

(c) subject
to having been provided with funds by the Parent in accordance with Article X ensure that all premiums on the Parent’s
D&O insurance are paid in a timely fashion.

 

Article
VIII

AVAILABILITY OF OFFICERS

 

Section
8.1 The Manager shall provide the Group with the services of those Executive Officers from time to time agreed with
the Parent, with the remuneration for such Executive Officers to be reflected in the Management Fee and paid by the Manager.
Initially such Executive Officers shall consist of the Chief Executive Officer, the Chief Operating Officer, the President
and the Chief Financial Officer.

 

Section
8.2 The Executive Officers are entitled to direct the Manager to remove and replace any individual made available to
any member of the Group by the Manager serving as an officer or any senior manager serving as head of a business unit, in either
case, of that member of the Group other than any Executive Officer, from such position. The Board of Directors, in its sole discretion,
shall be entitled to direct the Manager to remove any individual made available to the Parent by the Manager serving as an Executive
Officer from such position and to appoint such other individual to serve as successor as the Board of Directors shall approve.
Furthermore, the Manager agrees that it will not remove any individual made available to any member of the Group by the Manager
serving as an officer or senior manager of that member of the Group from his or her position without the consent of the Executive
Officers and, in the case of any Executive Officer, the Board of Directors. If any officer or senior manager who is made available
to the Parent by the Manager resigns, is terminated or otherwise vacates his or her office, the Manager shall, as soon as practicable
after acceptance of any resignation or after termination, use reasonable best efforts to identify suitable candidates for replacement
of such officer.

 

Section
8.3 The Parent may employ directly, at its sole cost, any other officers, senior managers or employees as it may
deem necessary, and such individuals will not be subject to this Agreement.

 

Section
8.4 The Manager will report to the Parent and the Board of Directors through any one or more of the Executive
Officers.

    	 

    		13

    

Article
IX

MANAGEMENT FEES AND EXPENSES

 

Section
9.1 In consideration of the Manager providing the Services to the Group, during the Initial Term, the Parent shall
pay the Manager the following fees (together, the “Management
Fees” and, on a per Vessel basis, the “Management
Fee”):

 

(a)
Subject to paragraph (b) below, a fee of $575 per day per Vessel, payable monthly in arrears (pro rated to reflect
the number of days that the Parent (or any Subsidiary) owns or charters-in each Vessel during the applicable month);

 

(b)
a fee of $250 per day per Vessel chartered-out to a third party on a bareboat charter basis payable monthly in
arrears (pro rated to reflect the number of days that the Parent (or any Subsidiary) owns each such Vessel during the
applicable month);

 

(c)
a fee equal to 1% calculated on the aggregate of the gross freight, demurrage, charter hire and ballast bonus
obtained for the employment of each Vessel during the Term, payable to the Manager monthly in arrears, but only to the extent
such freight, demurrage, charter hire or ballast bonus, as the case may be, is recognized as revenue;

 

(d)
a commission equal to 1% calculated on the price set forth in the memorandum of agreement or other sale and
purchase contract of (i) the Newbuilds set forth on Schedule C hereto (the “Commission
Newbuilds”), payable upon delivery of the Newbuilds to the relevant member of the Group; and (ii) any other
vessel (including the Vessels), other than with respect to the purchase of the Newbuilds set forth on Schedule D hereto (the
“Itochu Newbuilds”), bought or sold by the Parent or any
Subsidiary, payable upon final delivery of such vessel to the relevant member of the Group or the relevant purchaser, as
applicable; and

 

(e)
a fee of $375,000 per Newbuild for the services rendered by the Manager under the Supervision Agreement in respect
of such Newbuild, payable in accordance with the terms of such Supervision Agreement.

 

Section
9.2 The Manager shall have the right to demand the Management Fee payable in relation to each Vessel from either the
Parent or the relevant member of the Group owning such Vessel under the terms of the relevant Shipmanagement Agreement or Supervision
Agreement, as applicable.

 

Section
9.3 In the event that a Shipmanagement Agreement is terminated, other than by reason of default by the Manager,
the Management Fee payable to the Manager under Section 9.1(a) or, as the case may be, Section 9.1(b) for the Vessel subject
to such Shipmanagement Agreement shall be payable in respect of such Vessel for a further period of three calendar months
from the termination date. In addition:

 

(a) The
relevant member of the Group shall continue to pay Crew Support Costs (as such term is defined in the relevant Shipmanagement
Agreement) for the relevant Vessel during the said further period of three calendar months; and

    	 

    		14

    

(b) the
relevant member of the Group shall pay any Severance Costs (as such term is defined in the relevant Shipmanagement Agreement)
for the relevant Vessel which may materialize.

 

All amounts payable to the Manager under this
Section 9.3 shall be paid promptly by the Parent to the Manager following receipt by the Parent of a final accounting of funds
due from the Parent or any other member of the Group in accordance with Section 13.6.

 

Section
9.4 (a) The Management Fee for each Vessel will be fixed throughout the Initial Term and shall not be subject
to adjustment for euro/U.S. dollar exchange rate fluctuations or inflation during such period.

 

(b) For
each Subsequent Term (as defined below), the Management Fee for each Vessel will be set at a mutually agreed-upon rate
between the Parent and the Manager no later than 30 days prior to the commencement of the relevant Subsequent Term.

 

(c)
If the Parent and the Manager are unable to agree on the Management Fee for any Subsequent Term pursuant to
Section 9.4(b) hereof, the Management Fee for such Subsequent Term will be determined by arbitration pursuant to the terms of
Article XVII hereof.

 

Section
9.5 The Manager shall, at no additional cost to any member of the Group, provide the Group with office
accommodation, office staff (including secretarial, accounting and administrative assistance), facilities and stationery, and
shall, subject to Section 9.6 and Section 10.8, pay for all printing, postage, domestic telephone and all other usual office
expenses incurred by it as the Manager (it being understood that the services of the Executive Officers shall be provided
pursuant to Section 8.1.).

 

Section
9.6 The Parent hereby acknowledges that no capital expenditures, financial costs, operating expenses for each
Vessel or general and administrative expenses of the Group are covered by the Management Fees and any such costs, expenditure
and expenses shall be paid fully by the Parent or, as the case may be, the applicable member of the Group, whether directly
to third parties or by payment to such third parties through the Manager and, without prejudice to Section 10.8, to the
extent incurred by the Manager, shall be reimbursed to it by the Parent and/or any member of the Group from which the
Manager, in its discretion, seeks reimbursement. Such capital expenditures, financial costs, operating expenses for each
Vessel and general and administrative expenses of the Group include, without limiting the generality of the foregoing, items
such as:

 

(a) fees,
interest, principal and any other costs due to the Group’s financiers and their respective advisors;

 

(b)
all voyage expenses and vessel operating expenses directly relating to the operation and management of the Vessels
(including Crew costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society
fees, maintenance and repair costs, vetting expenses, etc.);

    	 

    		15

    

(c) any
commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors,
investment bankers, insurance advisors or any other third parties whatsoever appointed by the Manager whether in its own name
or on behalf and/or in the name of any member of the Group;

 

(d) any
commissions, fees, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors,
investment bankers, insurance advisors or any other third parties whatsoever sub-contracted to the Manager in the normal and
reasonable course of meeting the Manager’s duties and obligations under this Agreement including, without limiting the
generality of the foregoing, the duties provided in Articles V, VI and VII of this Agreement;

 

(e)
deductibles, insurance premiums (including D&O insurance) and/or P&I calls; and

 

(f)
postage, communication, traveling, victualling and other out of pocket expenses of the Manager and/or its
personnel, incurred in providing the Services, save for any such expenses incurred by the Manager under a Supervision
Agreement.

 

Article
X

BUDGETS, CORPORATE PLANNING AND EXPENSES

 

Section
10.1 On or before October 20 of each calendar year, the Manager shall prepare and submit to the Executive Officers
and Board of Directors a detailed draft budget for the next calendar year in a format acceptable to the Executive Officers
and Board of Directors and generally used by the Manager which shall include a statement of estimated revenue, estimated
general and administrative expenses of the Group and a proposed budget for capital expenditures, repairs or alterations,
including proposed expenditures in respect of dry-docking, together with an analysis as to when and why such replacements,
improvements, renovations or expenditures may be required (collectively, the “Draft
Budget”).

 

Section
10.2 For a period of 15 days after receipt of the Draft Budget, the Executive Officers or Board of Directors from
time to time, may request further details and submit written comments on the Draft Budget. If the Executive Officers or Board
of Directors do not agree with any item of the Draft Budget, they will, within the same 15-day period, give the Manager
notice of any inquiries to the Draft Budget, which notice will include the list of items under consideration (the
“Questioned Items”) and a proposal for the resolution of each
such Questioned Item. The Executive Officers, the Board of Directors and the Manager will endeavor to resolve any such
differences between them with respect to the Questioned Items, and any such differences that are not resolved within 15 days
after notice of such difference being given to the Manager will be settled by arbitration pursuant to the terms of Article
XVII hereof. If the Executive Officers or Board of Directors do not present any Questioned Items within such 15-day period,
they

    	 

    		16

    

will be deemed to have accepted the Draft
Budget and such Draft Budget shall be deemed to be the Approved Budget (as defined in Section 10.3 below).

 

Section
10.3 By November 20 of the relevant calendar year the Manager will prepare and deliver to the Parent a revised budget
that has been approved by the Board of Directors, in consultation with the Executive Officers (the “Approved
Budget”).

 

Section
10.4 The Manager may, from time to time, in any calendar year propose amendments to the Approved Budget upon 15
days notice to the Parent, in which event the Executive Officers (or, in the case of a change of 7.5% or more, the Board of
Directors) will have the right to approve the amendments in accordance with the process set out in Section 10.2 with the
relevant time periods being amended accordingly and provided that any Questioned Items are resolved within 45 days of
receipt of the notice by the Parent.

 

Section
10.5 Once the Approved Budget has been delivered, the Manager shall prepare and present to the Parent its estimate
of the working capital requirements of the Vessels and the Group and the Manager shall each month update this estimate. Based
on such estimate, the Manager shall each month make a request to the Parent and/or, as the case may be, the relevant members
of the Group, in writing for the funds required to provide the Services to the Group and to operate each Vessel for the
ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs,
additional insurance premiums, bunkers or provisions. Such funds shall be received by the Manager within ten calendar days
after the receipt by the Parent or, as the case may be, the relevant member of the Group of the Manager’s written
request and shall be held to the credit of the Parent or, in the Manager’s discretion, the relevant member of the Group
in a separate bank account. At the end of each quarter or, if the Manager from time to time so requires, at the end of each
month, the Manager shall preliminarily reconcile the amounts advanced to it by the Parent or, as the case may be, the
relevant member of the Group with the amounts actually expended by it for the operation of each of the Vessels, and (a) the
Manager shall remit to the Parent, or credit to the Parent amounts to be advanced to it hereunder for future months, any
unused portion of the amounts previously advanced by the Parent or, as the case may be, any member of the Group, or (b) the
Parent shall pay to the Manager any amounts properly expended by the Manager in excess of the amounts previously advanced by
the Parent or, as the case may be, any member of the Group. The Parent and the Manager shall reconcile any amounts due to the
Parent by the Manager or due to the Manager by the Parent for each fiscal year of the Parent as promptly as practicable
following the close of each such fiscal year. Without prejudice to Section 10.8, any expenses incurred by the Manager under
the terms of this Agreement on behalf of any member of the Group may be debited against the account of the respective member
of the Group, but shall in any event remain payable by the Parent and the relevant member of the Group to the Manager on
demand.

 

Section
10.6 The Manager shall produce a monthly comparison between budgeted and actual expenditures to the Executive
Officers. The Manager shall also maintain the records of all costs and expenses incurred, including any invoices,

    	 

    		17

    

receipts and supplementary materials as are necessary or proper
for the settlement of accounts.

 

Section
10.7 Insofar as any moneys are collected by the Manager under the terms of this Agreement, any Shipmanagement
Agreement and/or any Supervision Agreement (other than moneys payable by a member of the Group to the Manager), such moneys
and any interest thereon shall be held to the credit of the relevant member of the Group in a separate bank account in the
name thereof, but operated by the Manager and the Parent jointly. Interest on any such bank account shall be for the benefit
of the relevant member of the Group.

 

Section
10.8 Notwithstanding anything contained herein to the contrary, the Manager shall in no circumstances be required
to use or commit its own funds to finance the provision of the Services, other than (i) as contemplated by Section 8.1 hereof
or (ii) with respect to the employees employed by the Manager in the ordinary course of business.

 

Article
XI

LIABILITY AND INDEMNITY

 

Section
11.1 Save for the obligation of the Parent to pay any moneys due to the Manager hereunder, neither any member of
the Group nor the Manager shall be under any liability to the other for any failure to perform any of their obligations
hereunder by reason of Force Majeure. “Force Majeure” shall mean
any cause whatsoever of any nature or kind beyond the reasonable control of the relevant member of the Group or the Manager,
including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any
court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor
disturbances, embargoes or other causes of a similar nature.

 

Section
11.2 The Manager, including its officers, directors, employees, shareholders, agents, sub-contractors and any
Submanager (the “Manager Related Parties”), shall be under no
liability whatsoever to any member of the Group or to any third party (including the Crew) for any loss, damage, delay or
expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in
connection with detention of or delay to a Vessel), and howsoever arising in the course of the performance of this Agreement,
any Shipmanagement Agreement or any Supervision Agreement, unless and to the extent that the same is proved to have resulted
solely from the gross negligence or willful misconduct of the Manager, its officers, employees, agents, sub-contractors or
any Submanager.

 

Section
11.3 The Parent shall indemnify and hold harmless the Manager Related Parties against all actions, proceedings,
claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by
them arising out of or in connection with the performance of this Agreement,

    	 

    		18

    

any Shipmanagement Agreement or any Supervision
Agreement and against and in respect of any loss, damage, delay or expense of whatsoever nature (including legal costs and expenses
on a full indemnity basis), whether direct or indirect, incurred or suffered by any Manager Related Party arising out of or in
connection with the performance of this Agreement, any Shipmanagement Agreement and any Supervision Agreement, unless incurred
or suffered due to the gross negligence or willful misconduct of any Manager Related Party.

 

Section
11.4 It is hereby expressly agreed that no employee or agent of the Manager (including any sub-contractor from time
to time employed by the Manager) shall in any circumstances whatsoever be under any liability whatsoever to any member of the
Group or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from
any act, neglect or default on his part while acting in the course of or in connection with his employment and, without
prejudice to the generality of the foregoing provisions in this Article XI, every exemption, limitation, condition and
liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to
the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such
employee or agent of the Manager acting as aforesaid, and for the purpose of all the foregoing provisions of this Article XI,
the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all Persons who are or
might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such Persons shall to
this extent be or be deemed to be parties to this Agreement. Nothing in this Section 11.4 shall be construed so as to further
limit any liability the Manager may have to the Group under Section 11.2 hereof.

 

Section
11.5 The provisions of this Article XI shall survive any termination of this Agreement.

 

Article
XII

RIGHTS OF THE MANAGER, RESTRICTIONS ON THE MANAGER’S

AUTHORITY, AND NON-COMPETE PROVISIONS

 

Section
12.1 Except as may be provided in this Agreement or in any separate written agreement between the Parent or any
other member of the Group and the Manager, the Manager shall be an independent contractor and not the agent of the Parent or
any other member of the Group and shall have no right or authority to incur any obligation on behalf of any member of the
Group or to bind any member of the Group in any way whatsoever. Nothing in this Agreement shall be deemed to make the Manager
or any of its subsidiaries or employees an employee, joint venturer or partner of any member of the Group.

 

Section
12.2 The Parent acknowledges that the Manager shall have no responsibility hereunder, direct or indirect, with
regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of
any

    	 

    		19

    

member of the Group, which is solely the responsibility
of each respective member of the Group. Each member of the Group shall set its corporate policies independently through its respective
board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers
of each respective member of the Group from the performance of their duties or to limit the exercise of their powers.

 

Section
12.3 Notwithstanding the other provisions of this Agreement:

 

(a) the
Manager may act with respect to a member of the Group upon any advice, resolutions, requests, instructions, recommendations,
direction or information obtained from such member of the Group or any banker, accountant, broker, lawyer or other Person
acting as agent of or adviser to such member of the Group and the Manager shall incur no liability to such member of the
Group for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution,
recommendation, direction or information made or given by such member of the Group or its agents, in the absence of gross
negligence or willful misconduct by the Manager or its servants, and shall not be responsible for any misconduct, mistake,
oversight, error of judgment, neglect, default, omission, forgetfulness or want of prudence on the part of any such banker,
accountant, broker, lawyer, agent or adviser or other Person as aforesaid;

 

(b) the
Manager shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of
any member of the Group or its agents if the performance thereof is or would be illegal or unlawful; and

 

(c) the
Manager shall incur no liability to any member of the Group for doing or failing to do any act or thing which it shall be
required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or
resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or
similar action of any Person or body exercising or purporting to exercise the legitimate authority of any government or of
any central or local governmental institution in each case where the above entity has jurisdiction.

 

Section
12.4 (a) During the period commencing on the Effective Date and ending one year following termination of the
Management Agreement (the “Manager Restricted Period”), the
Manager shall be prohibited from, directly or indirectly, providing management services to, or with respect to, any Drybulk
Vessels (such activities, the “Manager Competitive Activities”),
other than as set forth in Section 12.4(b).

 

(b) Subject
to Section 4.10, the Manager may engage in Manager Competitive Activities pursuant to its involvement with the Parent and
with respect to the following: (i) Drybulk Vessels that are owned or operated (which includes chartering-in activities) by
the Hajioannou Entities and (ii) Drybulk Vessel Businesses that are acquired, invested in or controlled by the Hajioannou
Entities, in the case of each of clauses (i) and (ii), subject to compliance with, or waivers of, the Hajioannou Restrictive
Covenant Agreement and the Other Restrictive Covenant Agreements, as applicable.

    	 

    		20

    

Article
XIII

TERMINATION OF THIS AGREEMENT

 

Section
13.1 This Agreement shall be effective as of the Effective Date and, subject to Sections 13.2, 13.3, 13.4 and
13.5, shall continue until the date falling two years after the Effective Date (the “Initial
Term”). Thereafter the term of this Agreement shall be extended on a year-to-year basis up to eight times
(each a “Subsequent Term”) unless the Parent, at least 12 months
prior to the end of the then current term, gives written notice to the Manager that it wishes to terminate this Agreement at
the end of the then current term. In no event will the term of this Agreement (the “Term”)
extend beyond the date falling 10 years after the Effective Date.

 

Section
13.2 The Parent shall be entitled to terminate this Agreement upon notice in writing to the Manager if:

 

(a) the
Manager defaults in the performance of any material obligation under this Agreement, subject to a cure right of 20 Business
Days following written notice by the Parent, provided that any default of the Manager to perform any of its
obligations under a relevant Shipmanagement Agreement or any Supervision Agreement shall not, in itself, entitle the Parent
to terminate this Agreement pursuant to this Section 13.2(a) and shall only allow the relevant member of the Group to
terminate the relevant Shipmanagement Agreement or Supervision Agreement; provided, further, that if a Submanager was
performing services under a Shipmanagement Agreement that was terminated pursuant to this Section 13.2(a) due to the default
of that Submanager, the Parent shall be entitled to direct the Manager to remove such Submanager with respect to any other
Shipmanagement Agreement under which such Submanager is then performing services;

 

(b) any
moneys due and payable to the Parent or third parties by the Manager under this Agreement is not paid or accounted for within
10 Business Days following written notice by the Parent; or

 

(c)
at any time after the Initial Term upon 12 months’ written notice by the Parent.

 

Section
13.3 The Manager shall be entitled to terminate this Agreement by notice in writing to the Parent if

 

(a) any
moneys payable by the Parent under this Agreement is not paid when due or if due on demand within 10 Business Days following
demand by the Manager;

 

(b) the
Parent defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20
Business Days following written notice by the Manager;

 

(c)
there is a Change in Control of the Parent; or

    	 

    		21

    

(d)
the Management Fee for any Subsequent Term is determined by arbitration pursuant to the terms of Article XVII
hereof and the arbitrators accept the Parent’s proposal, with such termination being effective at the end of that
Subsequent Term.

 

Section
13.4 Either party shall be entitled to terminate this Agreement immediately if:

 

(a) the
other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of either
such party is sold, seized or appropriated;

 

(b) (i)
the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief
under any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party
seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 40 Business Days of its
filing; (iii) the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an
order is made for the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial
part of its assets; (v) or if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any
part of the other party’s undertaking, property or assets; or (vi) if an order is made or a resolution is passed for
the other party’s winding up;

 

(c) a
distress, execution, sequestration or other process is levied or enforced upon or sued out against a material amount of the
other party’s property which is not discharged within 20 Business Days;

 

(d)
the other party ceases or threatens to cease wholly or substantially to carry on its business otherwise than for
the purpose of a reconstruction or amalgamation without insolvency previously approved by the terminating party;

 

(e)
the other party is prevented from performing its obligations in any material respect hereunder by reasons of Force
Majeure for a period of two or more consecutive months; or

 

(f)
All Supervision Agreements and all Shipmanagement Agreements are terminated in accordance with the respective
terms thereof.

 

Section
13.5 Upon the effective date of termination pursuant to this Article XIII, the Manager shall promptly terminate its
service hereunder, ensuring that such termination occurs in a manner that minimizes any interruption to the business of the
members of the Group.

 

Section
13.6 Upon termination, the Manager shall, as promptly as possible, submit a final accounting of funds received and
disbursed under this Agreement, any Supervision Agreement and/or any Shipmanagement Agreement and of any remaining Management
Fees and/or any other funds due from the Parent or any other member of the Group, calculated pro rata to the date of
termination (except for those amounts payable in respect of the three months following the termination date under Section
9.3, which shall be payable by the Parent in accordance with that Section), and any non-disbursed funds of

    	 

    		22

    

any member of the Group in the Manager’s
possession or control will be paid by the Manager as directed by such member of the Group promptly upon the Manager’s receipt
of all sums then due it under this Agreement, any Supervision Agreement and/or any Management Agreement, if any.

 

Section
13.7 Upon termination of this Agreement, the Manager shall release to the Parent the originals where possible, or
otherwise certified copies, of all such accounts and all documents specifically relating to each Vessel or the provision of
the Services.

 

Section
13.8 The provisions of this Article XIII shall survive any termination of this Agreement.

 

Article
XIV

CHANGE IN CONTROL OF THE MANAGER AND RIGHT OF FIRST OFFER

 

Section
14.1 During the Manager Restricted Period, the Manager is prohibited from transferring, assigning, selling or
disposing of substantially all or all of its assets or property that is necessary for the performance of its services under
this Agreement, any Supervision Agreement or any Shipmanagement Agreement to any other party without the Consent of the
Parent except in the event that at the same time as or within three months after such disposition takes place the Manager is
set to replace the same with equivalent assets or property.

 

Section
14.2 During the Manager Restricted Period, in the event of a Proposed Change in Control of the Manager, the Parent
shall have a right of first offer to purchase the Manager pursuant to the procedures set forth in Section 14.4.

 

Section
14.3 The Parent and the Manager acknowledge that all potential transfers pursuant to this Article XIV are subject
to obtaining any and all written consents of governmental authorities and other non-affiliated third parties.

 

Section
14.4 Set forth below are the procedures for the Parent’s right of first offer to purchase the Manager under
Section 14.2:

 

(a) Prior
to engaging in any negotiations or otherwise offering to consummate a Proposed Change in Control of the Manager with any
third party, the Manager shall provide written notice of its intent to engage in a Proposed Change in Control of the Manager
(a “First Offer Notice”) and shall specify in such First Offer
Notice the material terms and conditions (including the consideration to be paid, which shall be in cash) on which it would
be willing to consummate a Proposed Change in Control of the Manager with the Parent, including any liabilities to be assumed
by the Parent.

 

(b) The
Parent shall notify the Manager within 30 days after receiving a First Offer Notice (the “First
Offer Period”) that either (i) the Parent does not wish to participate in a Proposed Change in Control of
the Manager (a “Negative Response”) or (ii) the Parent

    	 

    		23

    

does wish to participate in a Proposed Change
in Control of the Manager, subject to the negotiation of the terms and conditions of the Proposed Change in Control of the Manager
in accordance with the provisions of this Article XIV (an “Affirmative Response”).

 

(c) In
the event of an Affirmative Response, the Parent and the Manager shall negotiate in good faith during the First Offer Period
the terms and conditions of an agreement for the consummation of a Proposed Change in Control of the Manager with the Parent
and such terms and conditions are to be based on the terms and conditions set forth in the First Offer Notice.

 

(d)
In the event of a Negative Response or in the event the Parent and the Manager are unable to agree on the terms
and conditions of an agreement for the consummation of a Proposed Change in Control of the Manager during the First Offer
Period, then the Manager may consummate a Proposed Change in Control of the Manager within 120 days after the earlier of the
date the Manager receives a Negative Response and the end of the First Offer Period with a third party on terms and
conditions as to price that are not more favorable, and on such other terms and conditions that are not materially more
favorable, to the proposed purchaser than the terms and conditions specified in the First Offer Notice.

 

(e)
If the Manager does not consummate a Proposed Change in Control of the Manager to a third party within 120 days
after the earlier of the date the Manager receives a Negative Response from the Parent and the end of the First Offer Period
in accordance with Section 14.4(d) then the Manager shall not thereafter consummate a Proposed Change in Control of the
Manager without first offering to consummate a Proposed Change in Control of the Manager with the Parent in the manner
provided above.

 

Article
XV

NOTICES

 

Section
15.1 All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder,
shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day
to an individual at the following address:

 

Safe Bulkers, Inc.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Telefax: +30 210 895 6900

Attention: President

    	 

    		24

    

Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

 

Telefax: +30 210 895 6900

Attention: Managing Director

 

Article
XVI

APPLICABLE LAW

 

Section
16.1 This Agreement shall be governed by, and construed in accordance with, the laws of England.

 

Section
16.2 Except for Sections 3.5 and Article XI which can be relied upon by a Submanager, no other term of this
Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.

 

Article
XVII

ARBITRATION

 

Section
17.1 Any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary
to give effect to the provisions of this Article XVII. The arbitration shall be conducted in accordance with the London
Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

Section
17.2 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint
its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own
arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless
the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other
party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party
referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its
arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding
on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to
vary these provisions to provide for the appointment of a sole arbitrator.

 

Section
17.3 In the case of (i) any failure of the parties to agree on the Management Fee for any Subsequent Term within
30 days prior to the commencement of

    	 

    		25

    

that Subsequent Term or (ii) any failure of
the parties to agree upon the resolution of any Questioned Items in a Draft Budget prior to the 20th of November of a calendar
year, the terms of this Section 17.3 shall be applicable. Notwithstanding any contrary provisions of this Article XVII (but otherwise
subject to such provisions), the following “Baseball Arbitration”
provisions shall apply to the matters referred to in clauses (i) and (ii) above:

 

(a)
Each party shall designate one arbitrator within 5 business days following the relevant date specified in clause
(i) or (ii) above; and the two arbitrators so designated shall designate a third within 10 Business Days thereafter; provided, however,
that the parties may agree to a single arbitrator. If either party fails to designate an arbitrator within such 5 Business
Day period, the other arbitrator can render an award hereunder.

 

(b)
Each party shall propose an amount for each item in dispute that is subject to this Section 17.3, which shall be
provided in writing to the arbitrators, together with any supporting documentation. Such proposed amounts may differ from the
amounts proposed by the parties in their negotiations prior to triggering the implementation of this Section 17.3. The
arbitrators may, but shall not be required to, accept oral testimony in addition to supporting documentation.

 

(c)
Within 20 Business Days following the selection of the arbitrators hereunder, they shall, by majority vote, accept
the proposal of one party or the other for each item that is the subject of arbitration pursuant to this Section 17.3.

 

(d)
Awards under this Section 17.3 shall not include costs, but may include interest if the payment date for any
amount shall have passed. The fees and expenses of the arbitrators under this Section 17.3 shall be borne by the losing party
(and may be apportioned by the arbitrators if more than one item is the subject of an arbitration).

 

(e)
Awards under this Section 17.3 shall be final and binding on the parties.

 

Article
XVIII

MISCELLANEOUS

 

Section
18.1 This Agreement (which includes the Annex) constitutes the sole understanding and agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements or understandings, written or oral, with respect
thereto. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against
whom enforcement of such amendment, waiver or discharge is sought.

 

Section
18.2 During the term hereof, the Manager will not provide services hereunder through, or otherwise cause any
member of the Group to have, an office or fixed place of business in the United States.

    	 

    		26

    

Section
18.3 This Agreement may be executed in one or more written counterparts, each of which shall be deemed an
original, but all of which together shall constitute one instrument.

    	 

    	

    

IN WITNESS WHEREOF the undersigned have executed
this Agreement as of the date first above written.

 

	 	SAFE BULKERS, INC.	 
	 	 	 	 	 
	 	 	by	/s/ Polys Hajioannou	 
	 	 	 	Name:	 	 
	 	 	 	Title:	 	 
	 	 	 	 
	 	SAFETY MANAGEMENT OVERSEAS S.A.	 
	 	 	 	 	 
	 	 	by	/s/ George Papadopoulos	 
	 	 	 	Name: 	 	 
	 	 	 	Title: 	 	 

 

[Signature
Page to Management Agreement]

    	 

    	

    
SCHEDULE A

SHIPOWNING SUBSIDIARIES

 

Efragel Shipping Corporation

Marindou Shipping Corporation

Avstes Shipping Corporation

Kerasies Shipping Corporation

Marathassa Shipping Corporation

Pemer Shipping Ltd

Petra Shipping Ltd

Pelea Shipping Ltd

Staloudi Shipping Corporation

Marinouki Shipping Corporation

Soffive Shipping Corporation

Maxdeka Shipping Corporation

Maxenteka Shipping Corporation

Eniaprohi Shipping Corporation

Eniadefhi Shipping Corporation

Maxdodeka Shipping Corporation

Maxdekatria Shipping Corporation

Eptaprohi Shipping Corporation

Maxpente Shipping Corporation

    	 

    	

    

SCHEDULE B

NON-SHIPOWNING SUBSIDIARIES

    	 

    	

    

SCHEDULE C

COMMISSION NEWBUILDS

 

Maxdeka Shipping Corporation (Hull No. 2054)

Maxenteka Shipping Corporation (Hull No. 2055)

Maxdodeka Shipping Corporation (Hull No. 1039)

Maxdekatria Shipping Corporation (Hull No. 1050)

Eptaprohi Shipping Corporation (Hull No. 1074)

Maxpente Shipping Corporation (Hull No. 1075)

    	 

    	

    

SCHEDULE D

ITOCHU NEWBUILDS

 

Eniaprohi Shipping Corporation (Eleni)

Eniadefhi Shipping Corporation (Martine)

    	 

    	

    

APPENDIX I

FORM OF HAJIOANNOU RESTRICTIVE COVENANT AGREEMENT

[TO BE ATTACHED]

    	 

    	

    
 

 

SAFE BULKERS, INC.,

 

POLYS HAJIOANNOU,

 

VORINI HOLDINGS INC.,

 

SAFEFIXING CORPORATION

 

- and -

 

MACHAIRIOTISSA HOLDINGS INC.

 

 

 

RESTRICTIVE COVENANT AGREEMENT

 

 

 

 

    	 

    	

    

THIS RESTRICTIVE COVENANT
AGREEMENT (this “Agreement”) is made on May 29, 2008,

 

BY AND BETWEEN:

 

(1)SAFE BULKERS, INC., a Marshall Islands
corporation (the “Company”);

 

(2)POLYS HAKOANNOU, in his individual
capacity (“P. Hajioannou”);

 

(3)VORINI HOLDINGS INC., a Marshall Islands
corporation (“Vorini Holdings”);

 

(4)SAFEFIXING CORPORATION, a Liberian
corporation (“SafeFixing”); and

 

(5)MACHAIRIOTISSA HOLDINGS INC., a Marshall
Islands corporation (“Machairiotissa Holdings” and, together with P.
Hajioannou, Vorini Holdings and, together with any entity controlled by or under common control with Machairiotissa Holdings, P.
Hajioannou and/or Vorini Holdings, the “Hajioannou Entities”).

 

WHEREAS:

 

(A)Pursuant to the Management Agreement
by and between the Company and Safety Management Overseas S.A., a Panamanian corporation (the “Manager”),
dated May 29, 2008 (the “Management Agreement”), the Manager has agreed
to provide certain management services to the Company on an exclusive basis, restrict certain competitive activities and grant
a right of first offer to the Company to purchase its assets and properties upon the occurrence of certain events, all as described
therein; and

 

(B)the Company wishes to (i) limit the
activities of each of the Hajioannou Entities, on the terms and conditions set out in this Agreement to prohibit certain activities
that may compete with the business of the Company, (ii) be granted a right of first offer to purchase the Hajioannou Entities’
relevant interest in the Manager in the event of a potential change of control of the Manager and (iii) be granted a right of first
offer to purchase the Hajioannou Entities’ relevant interest in SafeFixing, in the event of a potential change of control
of SafeFixing.

 

NOW, THEREFORE, in consideration of the terms
and conditions set forth below and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged),
the parties hereto agree as follows:

    	2

    	

    

Article
I

INTERPRETATION

 

Section
1.1In this Agreement, unless the context otherwise requires:

 

(a)“Affirmative
Response” shall have the meaning set forth in Section 4.3(b).

 

(b)“Agreement”
shall have the meaning set forth in the preamble.

 

(c)“Break
Up Cost” means the aggregate amount of any and all costs including any taxes, registration fees, administrative
expenses, severance costs, and other similar costs and expenses that would be required to transfer Drybulk Vessels or any other
portion of a Non-Drybulk Acquisition that owns or operates Drybulk Vessels to the Company separately from the other assets of the
NonDrybulk Acquisition.

 

(d)“Board
of Directors” means the board of directors of the Company as the same may be constituted from time to time.

 

(e)“Business
Day” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; Cyprus;
and New York, New York.

 

(f)“Company”
shall have the meaning set forth in the preamble.

 

(g)“Company
Group” means, at any time, the Company and its subsidiaries at such time and “member of the Company Group”
shall be construed accordingly.

 

(h)“Competitive
Activities” shall have the meaning set forth in Section 3.1.

 

(i)“Drybulk
Vessel” means any ocean-going vessel (including any Newbuild) that is intended to be used primarily to transport
non-liquid cargoes of commodities shipped in an unpackaged state.

 

(j)“Drybulk
Vessel Business” means any business involved in the ownership or operation of Drybulk Vessels.

 

(k)“Effective
Date” means the Effective Date (as defined in the Management Agreement).

 

(l)“First
Offer Notice” shall have the meaning set forth in Section 4.3(a).

 

(m)“First
Offer Period” means (i) 30 days in the case of a Permitted Acquisition First Offer Right, (ii) 30 days in the
case of a Manager First Offer

    	3

    	

    

Right and (iii) 15 days in the case of a SafeFixing
First Offer Right.

 

(n)“Hajioannou
Entities” shall have the meaning set forth in the preamble.

 

(o)“Independent
Directors” means those members of the Board of Directors that qualify as independent directors within the meaning
of Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and the listing criteria of the New York
Stock Exchange.

 

(p)“Machairiottisa
Holdings” shall have the meaning set forth in the preamble.

 

(q)“Management
Agreement” shall have the meaning set forth in the recitals.

 

(r)“Manager”
shall have the meaning set forth in the recitals.

 

(s)“Manager
First Offer Right” shall have the meaning set forth in Section 4.1.

 

(t)“Negative
Response” shall have the meaning set forth in Section 4.3(b).

 

(u)“Newbuild”
means a new vessel to be or which has just been constructed, or is under construction, which a member of the Company Group has
agreed to acquire pursuant to a shipbuilding contract, memorandum of agreement or otherwise.

 

(v)“Non-Drybulk
Acquisition” means an acquisition or investment that includes (i) both Drybulk Vessels and vessels other than
Drybulk Vessels and/or (ii) any business that owns or operates Drybulk Vessels and vessels other than Drybulk Vessels.

 

(w)“P.
Hajioannou” shall have the meaning set forth in the preamble.

 

(x)“Permitted
Acquisition” means an acquisition by any of the Hajioannou Entities of a Drybulk Vessel or an acquisition of or
investment in a Drybulk Vessel Business that (i) has been first offered to the Company and refused by the majority of the Independent
Directors and (ii) has been acquired or invested in by the relevant Hajioannou Entity on terms and conditions as to price that
are not more favorable, and on such other terms and conditions that are not materially more favorable, to such Hajioannou Entity
than those offered to the Company.

 

(y)“Permitted
Acquisition First Offer Right” shall have the meaning set forth in Section 3.2(a).

    	4

    	

    

(z)“Proposed
Change in Control of the Manager” means (i) the approval by the board of directors of the Manager or the shareholders
of the Manager of a proposed sale of all or substantially all of the assets or property of the Manager necessary for the performance
of its services under the Management Agreement, (ii) the approval by the shareholders of the Manager of a proposed sale of the
Manager’s shares that would result in one or more of the Hajioannou Entities owning less than 80% of the voting power of
the outstanding voting securities of the Manager or (iii) the approval by the shareholders of the Manager of a proposed merger,
consolidation or similar transaction, as a result of which one or more of the Hajioannou Entities would beneficially own less than
80% of the voting power of the outstanding voting securities of the resulting entity following such transaction.

 

(aa)“Proposed
Change in Control of SafeFixing” shall mean (i) the approval by the board of directors of SafeFixing or the shareholders
of SafeFixing of a proposed sale of all or substantially all of the assets or property of SafeFixing, (ii) the approval by the
shareholders of SafeFixing of a proposed sale of SafeFixing’s shares that would result in one or more of the Hajioannou Entities
and Nicolaos Hadjioannou, collectively, owning less than 50.1% of the voting power of the outstanding voting securities of SafeFixing
or (iii) the approval by the shareholders of SafeFixing of a proposed merger, consolidation or similar transaction, as a result
of which one or more of the Hajioannou Entities and Nicolaos Hadjioannou, collectively, would beneficially own less than 50.1%
of the voting power of the outstanding voting securities of the resulting entity following such transaction.

 

(bb)“Restricted
Period” shall have the meaning set forth in Section 3.1.

 

(cc)“SafeFixing”
shall have the meaning set forth in the recitals.

 

(dd)“SafeFixing
First Offer Right” shall have the meaning set forth in Section 4.2.

 

(ee)“SafeFixing
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(ff)“Specified
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(gg)“Sale
Transaction” shall have the meaning set forth in Section 4.3.

 

(hh)“Vorini
Holdings” shall have the meaning set forth in the preamble.

 

Section
1.2The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

 

Section
1.3All the terms of this Agreement, whether or not so expressed, shall be binding upon the parties hereto and their
respective successors and assigns.

    	5

    	

    

Section
1.4Unless the context otherwise requires, words in the singular include the plural and vice versa.

 

Article
II

ACKNOWLEDGEMENT AND REPRESENTATION

 

Section
2.1Each of the Hajioannou Entities acknowledges he or it has received and reviewed the Management Agreement.

 

Section
2.2Each of P. Hajioannou and Machairiotissa Holdings hereby represents and warrants that as of the date of this Agreement,
Machairiotissa Holdings (a) owns at least 80% of the capital stock of the Manager and (b) holds at least 80% of the voting power
of the outstanding capital stock of the Manager considered for this purpose as a single class.

 

Section
2.3Each of the Hajioannou Entities hereby represents and warrants that as of the date of this Agreement, the Hajioannou
Entities and Nicolaos Hadjioannou, collectively, (a) own at least 50.1% of the capital stock of SafeFixing and (b) hold at least
50.1% of the voting power of the outstanding capital stock of SafeFixing considered for this purpose as a single class.

 

Section
2.4Each of the Hajioannou Entities acknowledges and agrees that, pursuant to the terms of the Management Agreement,
during the term of the Management Agreement, if a Drybulk Vessel owned by the Company and a Drybulk Vessel owned or operated, directly
or indirectly, by any of the Hajioannou Entities (other than through the Company), including through SafeFixing, are both available
and meet the criteria for a charter being fixed by the Manager, the Company’s Drybulk Vessel shall receive such charter.

 

Article
III

NON-COMPETITION

 

Section
3.1During the period commencing on the Effective Date and ending one year following termination of the Management Agreement
(such period the “Restricted Period”), each of the Hajioannou Entities
shall not, subject to Section 3.2 hereof, directly or indirectly, engage in (a) the ownership or operation of any Drybulk Vessel
or (b) the acquisition of or investment in any Drybulk Vessel Business, other than pursuant to (i) their involvement with the Company
and its subsidiaries and (ii) their involvement with the Manager, in compliance with the terms of the Management Agreement, as
the same may be waived or amended from time to time (together, the “Competitive Activities”).

 

Section
3.2Notwithstanding the foregoing, the Hajioannou Entities may engage in Competitive Activities (including through SafeFixing)
in the following circumstances:

    	6

    	

    

(a)with
respect to any Permitted Acquisition; provided that, (i) in the event of any subsequent proposed sale or transfer
of legal or beneficial ownership (in whole or in part) of the Permitted Acquisition by any of the Hajioannou Entities (other than
to another Hajioannou Entity), the relevant Hajioannou Entity or Entities shall grant to the Company a right of first offer on
such proposed sale or transfer of ownership (the “Permitted Acquisition First Offer
Right”), in accordance with the procedures set forth in Section 4.3 and (ii) any commercial management of Drybulk
Vessels that are controlled by the Hajioannou Entities (including through SafeFixing) in connection with the Permitted Acquisition
is performed by the Manager;

 

(b)with
respect to any Drybulk Vessels or Drybulk Vessel Business included in a Non-Drybulk Acquisition; provided that (i) less
than 50% of the fair market value of the Non-Drybulk Acquisition is attributable to the Drybulk Vessels and any related portion
of such business that is solely dedicated to the ownership and operation of such Drybulk Vessels, (ii) the relevant Hajioannou
Entity or Entities promptly offer to sell the Drybulk Vessels and such related portion of the business to the Company for their
fair market value plus any Break Up Costs and the majority of the Independent Directors refuse such offer and (iii) any commercial
management of Drybulk Vessels that are controlled by the Hajioannou Entities in connection with such Non-Drybulk Acquisition is
performed by the Manager. For purposes of this Section 3.2(b), fair market values shall be determined in good faith by the Board
of Directors;

 

(c)solely
through SafeFixing, where such engagement consists of chartering in Drybulk Vessels from third-party owners for subsequent chartering
out to customers (such chartered-in Drybulk Vessels, the “SafeFixing Vessels”);
provided that (i) with respect to the SafeFixing Vessels that are chartered in by SafeFixing as of the Effective Date (the
“Specified Vessels”), in the event any Specified Vessel is not subject
to an existing charter-out arrangement or the existing charter-out arrangement with respect to such Specified Vessel is terminated
or otherwise expires, the Company shall have the option (exercisable within 10 Business Days of written notice by SafeFixing of
such termination or expiry) to charter in such Specified Vessel from SafeFixing on the same terms and conditions as apply to SafeFixing
under the charter-in arrangement with respect to such Specified Vessel, (ii) with respect to SafeFixing Vessels other than Specified
Vessels, the Company shall have the option (exercisable within 10 Business Days following written notice by SafeFixing of entry
into the charter-in arrangement between SafeFixing and the third party owner) to charter in such SafeFixing Vessel from SafeFixing
on the same terms and conditions as apply to SafeFixing under such charter-in arrangement and (iii) any commercial management of
SafeFixing Vessels is performed by the Manager. For purposes of this Section 3.2(c), a Specified Vessel will no longer be deemed
a Specified Vessel following the expiration or other termination of the charter-in agreement between SafeFixing and the third party
owner of such vessel, as in effect as of the Effective Date; and

 

(d)passive
ownership of up to 9.99% of the outstanding voting securities of any publicly traded company that is a Drybulk Vessel Business
in whole or in part.

    	7

    	

    

Section
3.3For the avoidance of doubt, nothing in this Agreement shall be construed to restrict the ability of any Hajioannou
Entity or SafeFixing to acquire, invest in, operate, manage or charter any vessel other than Drybulk Vessels or any shipping-related
business other than a Drybulk Vessel Business.

 

Article
IV

CONTROL OF MANAGER; CONTROL OF SAFEFIXING; RIGHT OF FIRST OFFER

 

Section
4.1During the Restricted Period, in the event of a Proposed Change in Control of the Manager, the Company shall have
a 30-day right of first offer to purchase the relevant Hajioannou Entities’ direct or indirect interests in the Manager involved
in the Proposed Change in Control of the Manager (“Manager First Offer Right”).
Set forth in Section 4.3 are the procedures applicable to the Manager First Offer Right.

 

Section
4.2During the Restricted Period, in the event of a Proposed Change in Control of SafeFixing, the Company shall have
a 15 day right of first offer to purchase the relevant Hajioannou Entities’ or Nicolaos Hadjioannou’s direct or indirect
interests in SafeFixing involved in the Proposed Change in Control of SafeFixing (the “SafeFixing
First Offer Right”). Set forth in Section 4.3 are the procedures applicable to the SafeFixing First Offer Right.

 

Section
4.3Set forth below are the procedures applicable to the Permitted Acquisition First Offer Right, the Manager First Offer
Right and the SafeFixing First Offer Right. For purposes of this Section 4.3, the term “Sale
Transaction” shall mean (i) the sale or transfer of ownership of the Permitted Acquisition by the relevant Hajioannou
Entities, as described in Section 3.2(a), in the case of a Permitted Acquisition First Offer Right, (ii) a Proposed Change in Control
of the Manager, as described in Section 4.1, in the case of a Manager First Offer Right and (iii) a Proposed Change in Control
of SafeFixing, as described in Section 4.2, in the case of a SafeFixing First Offer Right.

 

(a)Prior
to engaging in any negotiations or otherwise offering to consummate a Sale Transaction with any third party, the relevant Hajioannou
Entity or Entities shall provide written notice of their intent to engage in a Sale Transaction (a “First
Offer Notice”) and shall specify in such First Offer Notice the material terms and conditions (including the consideration
to be paid, which shall be in cash) on which they would be willing to consummate a Sale Transaction with the Company, including
any liabilities to be assumed by the Company.

 

(b)The
Company shall notify the relevant Hajioannou Entity or Entities within the First Offer Period that either (i) the Company does
not wish to participate in a Sale Transaction (a “Negative Response”)
or (ii) the Company does wish to participate in a Sale Transaction, subject to the negotiation of the terms and conditions of the
Sale Transaction in accordance with the provisions of this Section 4.3 (an “Affirmative
Response”).

    	8

    	

    

(c)In
the event of an Affirmative Response, the Company and the relevant Hajioannou Entity or Entities shall negotiate in good faith
during the First Offer Period the terms and conditions of an agreement for the consummation of a Sale Transaction with the Company
and such terms and conditions are to be based on the terms and conditions set forth in the First Offer Notice.

 

(d)In
the event of a Negative Response or in the event the Company and the relevant Hajioannou Entity or Entities are unable to agree
on the terms and conditions of an agreement for the consummation of a Sale Transaction during the First Offer Period, then the
relevant Hajioannou Entity or Entities may consummate a Sale Transaction within 120 days after the earlier of the date the relevant
Hajioannou Entity or Entities receive a Negative Response and the end of the First Offer Period with a third party on terms and
conditions as to price that are not more favorable, and on such other terms and conditions that are not materially more favorable,
to the proposed purchaser than the terms and conditions specified in the First Offer Notice.

 

(e)If
a Sale Transaction is not consummated with a third party within 120 days after the earlier of the date of the Negative Response
and the end of the First Offer Period in accordance with clause (d) then the relevant Hajioannou Entity or Entities shall not thereafter
engage in a Sale Transaction without first offering the Company a Permitted Acquisition First Offer Right, Manager First Offer
Right or SafeFixing First Offer Right, as applicable, in the manner provided above.

 

Section
4.4The Hajioannou Entities and the Company acknowledge that all potential transfers pursuant to Section 3.2(a) and this
Article IV are subject to obtaining any and all written consents of governmental authorities and offer nonaffiliated third parties.

 

Article
V

NOTICES

 

Section
5.1All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder,
shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day
to a party at its respective address set forth below:

 

Safe Bulkers, Inc.

c/o. Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Chief Executive Officer

Telefax: 30-210-895-6900

    	9

    	

    

Polys Hajioannou

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Polys Hajioannou

 

Vorini Holdings Inc.

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: George Papadopoulos

 

Machairiotissa Holdings Inc.

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Antonios Prigkis

 

Article
VI

APPLICABLE LAW AND JURISDICTION

 

Section
6.1This Agreement shall be governed by, and construed in accordance with, the laws of England.

 

Article
VII

ARBITRATION

 

Section
7.1Any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance
with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect
to the provisions of this Article XVII. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association
(LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

Section
7.2The reference shall be to three arbitrators. If the Company on the one hand or the Hajioannou Entities on the other
(with the Hajioannou Entities being treated as one party for the purposes of this Article VII) wishes to refer a dispute to arbitration,
that party shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party
to appoint its own arbitrator within 14

    	10

    	

    

calendar days of that notice and stating that
it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has
done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so
within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice
to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole
arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties
agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

 

Article
VIII

MISCELLANEOUS

 

Section
8.1This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto, with the exception
of the Management Agreement. This Agreement may not be amended, waived or discharged except by an instrument in writing executed
by the party against whom enforcement of such amendment, waiver or discharge is sought.

 

Section
8.2It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly,
if any particular provision of this Agreement is adjudicated to be invalid or unenforceable, such provision will be deemed amended
to delete therefrom the portion thus adjudicated as invalid or unenforceable, such deletion to apply only with respect to the operation
of such provision in the particular jurisdiction in which such adjudications is made.

 

Section
8.3This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.

 

[Remainder of page intentionally blank.]

    	11

    	

    

IN WITNESS whereof the undersigned have executed
this Agreement as of the date first above written.

 

	 	SAFE BULKERS, INC.
	 	 	 
	 	By:	 	 
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	POLYS HAJIOANNOU
	 	 	 
	 	 	 
	 	VORINI HOLDINGS INC.
	 	 	 
	 	By:		 
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	SAFEFIXING CORPORATION
	 	 	 
	 	By:		 
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	MACHAIRIOTISSA HOLDINGS INC.
	 	 	 
	 	By:		 
	 	Name: 	 
	 	Title:	 

 

[Signature
Page for Restrictive Covenant Agreement]

    	 

    	

    

APPENDIX II

FORM OF OTHER RESTRICTIVE COVENANT AGREEMENT

[TO BE ATTACHED]

    	 

    	

    
 

 

SAFE BULKERS, INC.,

 

- and -

 

POLYS HAJIOANNOU

 

 

 

RESTRICTIVE. COVENANT AGREEMENT

 

 

 

 

    	 

    	

    

THIS RESTRICTIVE COVENANT AGREEMENT
(this “Agreement”) is made on May 29, 2008,

 

BY AND BETWEEN:

 

(1) SAFE BULKERS, INC., a Marshall Islands
corporation (the “Company”); and

 

(2) POLYS HAJIOANNOU, in his individual
capacity (“P. Hajioannou”).

 

WHEREAS:

 

(A) Pursuant to the Restrictive Covenant
Agreement by and between the Company and P. Hajioannou, Vorini Holdings, Inc., a Marshall Islands corporation (“Vorini
Holdings”), SafeFixing Corporation, a Liberian corporation (“SafeFixing”)
and Machairiotissa Holdings Inc., a Marshall Islands corporation (“Machairiotissa Holdings”
and, together with P. Hajioannou, Vorini Holdings and, together with any entity controlled by or under common control with Machairiotissa
Holdings, P. Hajioannou and/or Vorini Holdings, the “Hajioannou Entities”),
dated May 29, 2008 (the “Hajioannou Entities Restrictive Covenant Agreement”),
the Hajioannou Entities: (i) are prohibited from conducting certain activities that may compete with the business of the Company,
(ii) granted a right of first offer to purchase the Hajioannou Entities’ relevant interest in Safety Management Overseas
S.A., a Panamanian corporation (the “Manager”), in the event of a potential
change of control of the Manager and (iii) granted a right of first offer to purchase the Hajioannou Entities’ relevant interest
in SafeFixing, in the event of a potential change of control of SafeFixing; and

 

(B) the Company wishes to limit the
activities of P. Hajioannou in his capacity as a director or employee of the Company, and any entity controlled by P.
Hajioannou (“P. Hajioannou Entity”), on the terms and conditions
set out in this Agreement to prohibit certain activities that may compete with the business of the Company.

 

NOW, THEREFORE, in consideration of the terms
and conditions set forth below and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged),
the parties hereto agree as follows:

 

Article
I

INTERPRETATION

 

Section
1.1 In this Agreement, unless the context otherwise requires:

 

(a) “Affirmative
Response” shall have the meaning set forth in Section 4.1(b).

    	2

    	

    

(b) “Agreement”
shall have the meaning set forth in the preamble.

 

(c) “Break
Up Cost” means the aggregate amount of any and all costs including any taxes, registration fees, administrative
expenses, severance costs, and other similar costs and expenses that would be required to transfer Drybulk Vessels or any other
portion of a Non-Drybulk Acquisition that owns or operates Drybulk Vessels to the Company separately from the other assets of the
Non-Drybulk Acquisition.

 

(d) “Board
of Directors” means the board of directors of the Company as the same may be constituted from time to time.

 

(e) “Business
Day” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; Cyprus;
and New York, New York.

 

(f) “Company”
shall have the meaning set forth in the preamble.

 

(g) “Company
Group” means, at any time, the Company and its subsidiaries at such time and “member of the Company Group”
shall be construed accordingly.

 

(h) “Competitive
Activities” shall have the meaning set forth in Section 3.1.

 

(i) “Drybulk
Vessel” means any ocean-going vessel (including any Newbuild) that is intended to be used primarily to transport
non-liquid cargoes of commodities shipped in an unpackaged state.

 

(j) “Drybulk
Vessel Business” means any business involved in the ownership or operation of Drybulk Vessels.

 

(k) “Effective
Date” means the date upon which the initial public offering of the Company is consummated.

 

(l) “First
Offer Notice” shall have the meaning set forth in Section 4.1(a).

 

(m) “First
Offer Period” means 30 days in the case of a Permitted Acquisition First Offer Right.

 

(n) “Hajioannou
Entities” shall have the meaning set forth in the recitals.

 

(o) “Hajioannou
Entities Restrictive Covenant Agreement” shall have the meaning set forth in the recitals.

    	3

    	

    

(p) “Independent
Directors” means those members of the Board of Directors that qualify as independent directors within the meaning
of Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and the listing criteria of the New York
Stock Exchange.

 

(q) “Machairiotissa
Holdings” shall have the meaning set forth in the recitals.

 

(r) “Management
Agreement” means the Management Agreement between the Company and the Manager, dated on or about the date of this
Agreement.

 

(s) “Manager”
shall have the meaning set forth in the recitals.

 

(t) “Negative
Response” shall have the meaning set forth in Section 4.1(b).

 

(u) “Newbuild”
means a new vessel to be or which has just been constructed, or is under construction, which a member of the Company Group has
agreed to acquire pursuant to a shipbuilding contract, memorandum of agreement or otherwise.

 

(v) “Non-Drybulk
Acquisition” means an acquisition or investment that includes (i) both Drybulk Vessels and vessels other than
Drybulk Vessels and/or (ii) any business that owns or operates Drybulk Vessels and vessels other than Drybulk Vessels.

 

(w) “Permitted
Acquisition” means an acquisition by P. Hajioannou of a Drybulk Vessel or an acquisition of or investment in a
Drybulk Vessel Business that (i) has been first offered to the Company and refused by the majority of the Independent Directors
and (ii) has been acquired or invested in by P. Hajioannou on terms and conditions as to price that are not more favorable, and
on such other terms and conditions that are not materially more favorable, to P. Hajioannou than those offered to the Company.

 

(x) “Permitted
Acquisition First Offer Right” shall have the meaning set forth in Section 3.2(a).

 

(y) “P.
Hajioannou” shall have the meaning set forth in the preamble.

 

(z) “P.
Hajioannou Entity” shall have the meaning set forth in the recitals, and “P.
Hajioannou Entities” shall have a corresponding meaning.

 

(aa) “Restricted
Period” shall mean the period commencing on the Effective Date and ending one year following the later of (i)
the termination of P. Hajioannou’s service with the Company as a director and (ii) the termination of P. Hajioannou’s
service with the Company as an employee.

    	4

    	

    

(bb) “SafeFixing”
shall have the meaning set forth in the recitals.

 

(cc) “SafeFixing
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(dd) “Specified
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(ee) “Sale
Transaction” shall have the meaning set forth in Section 4.1.

 

(ff) “Vorini
Holdings” shall have the meaning set forth in the recitals.

 

Section
1.2 The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

 

Section
1.3 All the terms of this Agreement, whether or not so expressed, shall be binding upon the parties hereto and their
respective successors and assigns.

 

Section
1.4 Unless the context otherwise requires, words in the singular include the plural and vice versa.

 

Article
II

ACKNOWLEDGEMENT

 

Section
2.1 P. Hajioannou acknowledges he has received and reviewed the Management Agreement.

 

Section
2.2 P. Hajioannou acknowledges and agrees that, pursuant to the terms of the Management Agreement, during the term of
the Management Agreement, if a Drybulk Vessel owned by the Company and a Drybulk Vessel owned or operated, directly or indirectly,
by P. Hajioannou or any P. Hajioannou Entity (other than through the Company), including through SafeFixing, are both available
and meet the criteria for a charter being fixed by the Manager, the Company’s Drybulk Vessel shall receive such charter.

 

Article
III

NON-COMPETITION

 

Section
3.1 During the Restricted Period, P. Hajioannou shall and procures that the P. Hajioannou Entities shall, subject to
Section 3.2 hereof, not directly or indirectly, engage in (a) the ownership or operation of any Drybulk Vessel or (b) the acquisition
of or investment in any Drybulk Vessel Business, other than pursuant to his

    	5

    	

    

involvement with (i) any member of the Company
Group, or (ii) the Manager, in compliance with the restrictions on competitive activities set out in the Management Agreement,
as the same may be waived or amended from time to time (together, (a) and (b) are defined as the “Competitive
Activities”).

 

Section
3.2 Notwithstanding the foregoing, P. Hajioannou may engage in Competitive Activities (including through SafeFixing and
any other P. Hajioannou Entity) in the following circumstances:

 

(a) with
respect to any Permitted Acquisition; provided that, (i) in the event of any subsequent proposed sale or transfer of legal
or beneficial ownership (in whole or in part) of the Permitted Acquisition by P. Hajioannou directly or indirectly through a P.
Hajioannou Entity (other than to another Hajioannou Entity or Nicolaos Hadjioannou), P. Hajioannou shall grant to the Company a
right of first offer on such proposed sale or transfer of ownership (the “Permitted
Acquisition First Offer Right”), in accordance with the procedures set forth in Section 4.1 and (ii) any commercial
management of Drybulk Vessels that are controlled by P. Hajioannou (including through SafeFixing or any other P. Hajioannou Entity)
in connection with the Permitted Acquisition is performed by the Manager;

 

(b) with
respect to any Drybulk Vessels or Drybulk Vessel Business included in a Non-Drybulk Acquisition; provided that (i) less than 50%
of the fair market value of the Non-Drybulk Acquisition is attributable to the Drybulk Vessels and any related portion of such
business that is solely dedicated to the ownership and operation of such Drybulk Vessels, (ii) P. Hajioannou promptly offers to
sell the Drybulk Vessels and such related portion of the business to the Company for their fair market value plus any Break Up
Costs and the majority of the Independent Directors refuse such offer and (iii) any commercial management of Drybulk Vessels that
are controlled by P. Hajioannou in connection with such Non-Drybulk Acquisition is performed by the Manager. For purposes of this
Section 3.2(b), fair market values shall be determined in good faith by the Board of Directors;

 

(c) solely
through SafeFixing, where such engagement consists of chartering in Drybulk Vessels from third-party owners for subsequent chartering
out to customers (such chartered-in Drybulk Vessels, the “SafeFixing Vessels”);
provided that (i) with respect to the SafeFixing Vessels that are chartered in by SafeFixing as of the Effective Date (the
“Specified Vessels”), in the event any Specified Vessel is not subject
to an existing charter-out arrangement or the existing charter-out arrangement with respect to such Specified Vessel is terminated
or otherwise expires, the Company shall have the option (exercisable within 10 Business Days of written notice by SafeFixing of
such termination or expiry) to charter in such Specified Vessel from SafeFixing on the same terms and conditions as apply to SafeFixing
under the charter-in arrangement with respect to such Specified Vessel, (ii) with respect to SafeFixing Vessels other than Specified
Vessels, the Company shall have the 

    	6

    	

    

option (exercisable within 10 Business
Days following written notice by SafeFixing of entry into the charter-in arrangement between SafeFixing and the third party owner)
to charter in such SafeFixing Vessel from SafeFixing on the same terms and conditions as apply to SafeFixing under such charter-in
arrangement and (iii) any commercial management of SafeFixing Vessels is performed by the Manager. For purposes of this Section
3.2(c), a Specified Vessel will no longer be deemed a Specified Vessel following the expiration or other termination of the charter-in
agreement between SafeFixing and the third party owner of such vessel, as in effect as of the Effective Date; and

 

(d) passive
ownership of up to 9.99% of the outstanding voting securities of any publicly traded company that is a Drybulk Vessel Business
in whole or in part.

 

Section
3.3 For the avoidance of doubt, nothing in this Agreement shall be construed to restrict the ability of P. Hajioannou
or SafeFixing or any other P. Hajioannou Entity to acquire, invest in, operate, manage or charter any vessel other than Drybulk
Vessels or any shipping-related business other than a Drybulk Vessel Business.

 

Article
IV

RIGHT OF FIRST OFFER

 

Section
4.1 Set forth below are the procedures applicable to the Permitted Acquisition First Offer Right. For purposes of this
Section 4.1, the term “Sale Transaction” shall mean the sale or transfer
of ownership of the Permitted Acquisition by P. Hajioannou (directly, or indirectly through a P. Hajioannou Entity), as described
in Section 3.2(a), in the case of a Permitted Acquisition First Offer Right.

 

(a) Prior
to engaging in any negotiations or otherwise offering to consummate a Sale Transaction with any third party, P. Hajioannou
shall provide written notice of his intent to engage in a Sale Transaction (a “First
Offer Notice”) and shall specify in such First Offer Notice the material terms and conditions (including the
consideration to be paid, which shall be in cash) on which he would be willing to consummate a Sale Transaction with the
Company, including any liabilities to be assumed by the Company.

 

(b) The
Company shall notify P. Hajioannou within the First Offer Period that either (i) the Company does not wish to participate in a
Sale Transaction (a “Negative Response”) or (ii) the Company does wish
to participate in a Sale Transaction, subject to the negotiation of the terms and conditions of the Sale Transaction in accordance
with the provisions of this Section 4.1 (an “Affirmative Response”).

 

(c) In
the event of an Affirmative Response, the Company and P. Hajioannou shall negotiate in good faith during the First Offer Period
the terms and conditions of an agreement for the consummation of a Sale Transaction with

    	7

    	

    

the Company and such terms and conditions
are to be based on the terms and conditions set forth in the First Offer Notice.

 

(d) In
the event of a Negative Response or in the event the Company and P. Hajioannou are unable to agree on the terms and conditions
of an agreement for the consummation of a Sale Transaction during the First Offer Period, then P. Hajioannou may consummate a Sale
Transaction within 120 days after the earlier of the date P. Hajioannou receives a Negative Response and the end of the First Offer
Period with a third party on terms and conditions as to price that are not more favorable, and on such other terms and conditions
that are not materially more favorable, to the proposed purchaser than the terms and conditions specified in the First Offer Notice.

 

(e) If
a Sale Transaction is not consummated with a third party within 120 days after the earlier of the date of the Negative Response
and the end of the First Offer Period in accordance with clause (d) then P. Hajioannou shall not thereafter engage in a Sale Transaction
without first offering the Company a Permitted Acquisition First Offer Right in the manner provided above.

 

SECTION 4.2. P. Hajioannou and the Company
acknowledge that all potential transfers pursuant to Section 3.2(a) and this Article IV are subject to obtaining any and all written
consents of governmental authorities and offer non-affiliated third parties.

 

Article
V

NOTICES

 

Section
5.1 All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder,
shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day
to a party at its respective address set forth below:

 

Safe Bulkers, Inc.

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Chief Executive Officer

Telefax: 30-210-895-6900

 

Polys Hajioannou

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

    	8

    	

    

16605 Voula 

Athens, Greece

Attention: Polys Hajioannou

 

Article
VI

APPLICABLE LAW AND JURISDICTION

 

Section
6.1 This Agreement shall be governed by, and construed in accordance with, the laws of England.

 

Article
VII

ARBITRATION

 

Section
7.1 Any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance
with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect
to the provisions of this Article XVII. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association
(LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

Section
7.2 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator
within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party
appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint
its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration
may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall
advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed
by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment
of a sole arbitrator.

 

Article
VIII

MISCELLANEOUS

 

Section
8.1 This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto, with the exception
of the Hajioannou Entities Restrictive Covenant Agreement and the Management Agreement. This Agreement may not be amended, waived
or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge
is sought.

    	9

    	

    

Section
8.2 It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly,
if any particular provision of this Agreement is adjudicated to be invalid or unenforceable, such provision will be deemed amended
to delete therefrom the portion thus adjudicated as invalid or unenforceable, such deletion to apply only with respect to the operation
of such provision in the particular jurisdiction in which such adjudications is made.

 

Section
8.3 This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.

 

[Remainder of page intentionally left blank.]

    	10

    	

    

IN WITNESS whereof the undersigned have executed
this Agreement as of the date first above written.

 

	 	SAFE BULKERS, INC.	 
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	POLYS HAJIOANNOU	 
	 	 	 

 

[Signature
Page to the Polys Hajioannou Restrictive Covenant Agreement]

    	 

    	

    

 

SAFE BULKERS, INC.,

 

- and -

 

NICOLAOS HADJIOANNOU

 

 

 

RESTRICTIVE COVENANT AGREEMENT

 

 

 

    	 

    	

    

THIS RESTRICTIVE COVENANT AGREEMENT
(this “Agreement”) is made on May 29, 2008,

 

BY AND BETWEEN:

 

(1)SAFE BULKERS, INC., a Marshall Islands
corporation (the “Company”); and

 

(2)NICOLAOS HADJIOANNOU, in his individual
capacity (“N. Hadjioannou”).

 

WHEREAS:

 

(A) Pursuant to the Restrictive Covenant Agreement
by and between the Company and Polys Hajioannou (“P. Hajioannou”),
Vorini Holdings, Inc., a Marshall Islands corporation (“Vorini
Holdings”), SafeFixing Corporation, a Liberian corporation (“SafeFixing”)
and Machairiotissa Holdings Inc., a Marshall Islands corporation (“Machairiotissa
Holdings” and, together with P. Hajioannou, Vorini Holdings and, together with any entity controlled by or under
common control with Machairiotissa Holdings, P. Hajioannou and/or Vorini Holdings, the “Hajioannou
Entities”), dated May 29, 2008 (the “Hajioannou
Entities Restrictive Covenant Agreement”), the Hajioannou Entities: (i) are prohibited from conducting certain
activities that may compete with the business of the Company, (ii) granted a right of first offer to purchase the Hajioannou Entities’
relevant interest in Safety Management Overseas S.A., a Panamanian corporation (the “Manager”)
in the event of a potential change of control of the Manager and (iii) granted a right of first offer to purchase the Hajioannou
Entities’ relevant interest in SafeFixing, in the event of a potential change of control of SafeFixing; and

 

(B)the Company wishes to (i) limit the activities
of N. Hadjioannou in his capacity as a director or employee of the Company, and any entity controlled by N. Hajioannou (“N.
Hajioannou Entity”), on the terms and conditions set out in this Agreement to prohibit certain activities that
may compete with the business of the Company and (ii) be granted a right of first offer to purchase N. Hadjioannou’s interest
in SafeFixing, in the event of a potential change of control of SafeFixing.

 

NOW, THEREFORE, in consideration of the terms
and conditions set forth below and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged),
the parties hereto agree as follows:

 

Article
I

INTERPRETATION

 

Section
1.1In this Agreement, unless the context otherwise requires:

 

(a) “Affirmative
Response” shall have the meaning set forth in Section 4.2(b).

    	2

    	

    

(b)“Agreement”
shall have the meaning set forth in the preamble.

 

(c)“Break
Up Cost” means the aggregate amount of any and all costs including any taxes, registration fees, administrative
expenses, severance costs, and other similar costs and expenses that would be required to transfer Drybulk Vessels or any other
portion of a Non-Drybulk Acquisition that owns or operates Drybulk Vessels to the Company separately from the other assets of the
Non-Drybulk Acquisition.

 

(d)“Board
of Directors” means the board of directors of the Company as the same may be constituted from time to time.

 

(e)“Business
Day” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; Cyprus;
and New York, New York.

 

(f)“Company”
shall have the meaning set forth in the preamble.

 

(g)“Company
Group” means, at any time, the Company and its subsidiaries at such time and “member of the Company Group”
shall be construed accordingly.

 

(h)“Competitive
Activities” shall have the meaning set forth in Section 3.1.

 

(i)“Drybulk
Vessel” means any ocean-going vessel (including any Newbuild) that is intended to be used primarily to transport
non-liquid cargoes of commodities shipped in an unpackaged state.

 

(j)“Drybulk
Vessel Business” means any business involved in the ownership or operation of Drybulk Vessels.

 

(k)“Effective
Date” means the date upon which the initial public offering of the Company is consummated.

 

(l)“First
Offer Notice” shall have the meaning set forth in Section 4.2(a).

 

(m)“First
Offer Period” means (i) 30 days in the case of a Permitted Acquisition First Offer Right and (ii) 15 days in the
case of a SafeFixing First Offer Right.

 

(n)“Hajioannou
Entities” shall have the meaning set forth in the recitals.

 

(o)“Independent
Directors” means those members of the Board of Directors that qualify as independent directors within the meaning
of Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and the listing criteria of the New York
Stock Exchange.

 

(p)“Machairiotissa
Holdings” shall have the meaning set forth in the recitals.

    	3

    	

    

(q)“Manager”
shall have the meaning set forth in the recitals.

 

(r)“N.
Hadjioannou” shall have the meaning set forth in the preamble.

 

(s)“N.
Hadjioannou Entity” shall have the meaning set forth on the recitals, and “N.
Hadjioannou Entities” shall have a corresponding meaning.

 

(t)“Negative
Response” shall have the meaning set forth in Section 4.2(b).

 

(u)“Newbuild”
means a new vessel to be or which has just been constructed, or is under construction, which a member of the Company Group has
agreed to acquire pursuant to a shipbuilding contract, memorandum of agreement or otherwise.

 

(v)“Non-Drybulk
Acquisition” means an acquisition or investment that includes (i) both Drybulk Vessels and vessels other than
Drybulk Vessels and/or (ii) any business that owns or operates Drybulk Vessels and vessels other than Drybulk Vessels.

 

(w)“P.
Hajioannou” shall have the meaning set forth in the recitals.

 

(x)“Permitted
Acquisition” means an acquisition by N. Hadjioannou of a Drybulk Vessel or an acquisition of or investment in
a Drybulk Vessel Business that (i) has been first offered to the Company and refused by the majority of the Independent Directors
and (ii) has been acquired or invested in by N. Hadjioannou on terms and conditions as to price that are not more favorable, and
on such other terms and conditions that are not materially more favorable, to N. Hadjioannou than those offered to the Company.

 

(y)“Permitted
Acquisition First Offer Right” shall have the meaning set forth in Section 3.2(a).

 

(z)“Proposed
Change in Control of SafeFixing” shall mean (i) the approval by the board of directors of SafeFixing or the shareholders
of SafeFixing of a proposed sale of all or substantially all of the assets or property of SafeFixing, (ii) the approval by the
shareholders of SafeFixing of a proposed sale of SafeFixing’s shares that would result in one or more of the Hajioannou Entities
and N. Hadjioannou, collectively, owning less than 50.1% of the voting power of the outstanding voting securities of SafeFixing
or (iii) the approval by the shareholders of SafeFixing of a proposed merger, consolidation or similar transaction, as a result
of which one or more of the Hajioannou Entities and N. Hadjioannou, collectively, would beneficially own less than 50.1% of the
voting power of the outstanding voting securities of the resulting entity following such transaction.

 

(aa)“Restricted
Period” shall mean the period commencing on the Effective Date and ending one year following the later of (i)
the termination of N. Hadjioannou’s service with the Company as a director and (ii) the termination of N. Hadjioannou’s
service with the Company as an employee.

    	4

    	

    

(bb)“SafeFixing”
shall have the meaning set forth in the recitals.

 

(cc)“SafeFixing
First Offer Right” shall have the meaning set forth in Section 4.1.

 

(dd)“SafeFixing
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(ee)“Specified
Vessels” shall have the meaning set forth in Section 3.2(c).

 

(ff)“Sale
Transaction” shall have the meaning set forth in Section 4.2.

 

(gg)“Vorini
Holdings” shall have the meaning set forth in the recitals.

 

Section
1.2The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

 

Section
1.3All the terms of this Agreement, whether or not so expressed, shall be binding upon the parties hereto and their
respective successors and assigns.

 

Section
1.4Unless the context otherwise requires, words in the singular include the plural and vice versa.

 

Article
II

REPRESENTATION

 

Section
2.1N. Hadjioannou hereby represents and warrants that as of the date of this Agreement, the Hajioannou Entities and
N. Hadjioannou, collectively, (a) own at least 50.1% of the capital stock of SafeFixing and (b) hold at least 50.1% of the voting
power of the outstanding capital stock of SafeFixing considered for this purpose as a single class.

 

Article
III

NON-COMPETITION

 

Section
3.1During the Restricted Period, N. Hadjioannou shall and procures that the N. Hadjioannou Entities shall, subject to
Section 3.2 hereof, not directly or indirectly, engage in (a) the ownership or operation of any Drybulk Vessel or (b) the acquisition
of or investment in any Drybulk Vessel Business, other than pursuant to his involvement with any member of the Company Group (the
“Competitive Activities”).

    	5

    	

    

Section
3.2Notwithstanding the foregoing, N. Hadjioannou may engage in Competitive Activities (including through SafeFixing
and any other N. Hadjioannou Entity) in the following circumstances:

 

(a)with
respect to any Permitted Acquisition; provided that, (i) in the event of any subsequent proposed sale or transfer of legal
or beneficial ownership (in whole or in part) of the Permitted Acquisition by N. Hadjioannou directly or indirectly through a N.
Hadjioannou Entity (other than to a Hajioannou Entity), N. Hadjioannou shall grant to the Company a right of first offer on such
proposed sale or transfer of ownership (the “Permitted Acquisition
First Offer Right”), in accordance with the procedures set forth in Section 4.2 and (ii) any commercial management
of Drybulk Vessels that are controlled by N. Hadjioannou (including through SafeFixing or any other N. Hadjioannou Entity) in connection
with the Permitted Acquisition is performed by the Manager;

 

(b)with
respect to any Drybulk Vessels or Drybulk Vessel Business included in a Non-Drybulk Acquisition; provided that (i) less
than 50% of the fair market value of the Non-Drybulk Acquisition is attributable to the Drybulk Vessels and any related portion
of such business that is solely dedicated to the ownership and operation of such Drybulk Vessels, (ii) N. Hadjioannou promptly
offers to sell the Drybulk Vessels and such related portion of the business to the Company for their fair market value plus any
Break Up Costs and the majority of the Independent Directors refuse such offer and (iii) any commercial management of Drybulk Vessels
that are controlled by N. Hadjioannou in connection with such Non-Drybulk Acquisition is performed by the Manager. For purposes
of this Section 3.2(b), fair market values shall be determined in good faith by the Board of Directors;

 

(c)solely
through SafeFixing, where such engagement consists of chartering in Drybulk Vessels from third-party owners for subsequent chartering
out to customers (such chartered-in Drybulk Vessels, the “SafeFixing
Vessels”); provided that (i) with respect to the SafeFixing Vessels that are chartered in by SafeFixing
as of the Effective Date (the “Specified Vessels”),
in the event any Specified Vessel is not subject to an existing charter-out arrangement or the existing charter-out arrangement
with respect to such Specified Vessel is terminated or otherwise expires, the Company shall have the option (exercisable within
10 Business Days of written notice, by SafeFixing of such termination or expiry) to charter in such Specified Vessel from SafeFixing
on the same terms and conditions as apply to SafeFixing under the charter-in arrangement with respect to such Specified Vessel,
(ii) with respect to SafeFixing Vessels other than Specified Vessels, the Company shall have the option (exercisable within 10
Business Days following written notice by SafeFixing of entry into the charter-in arrangement between SafeFixing and the third
party owner) to charter in such SafeFixing Vessel from SafeFixing on the same terms and conditions as apply to SafeFixing under
such charter-in arrangement and (iii) any commercial management of SafeFixing Vessels is performed by the Manager. For purposes
of this Section 3.2(c), a Specified Vessel will no longer be deemed a Specified Vessel following the expiration or other termination
of the charter-in agreement between SafeFixing and the third party owner of such vessel, as in effect as of the Effective Date;
and

    	6

    	

    

(d)passive
ownership of, collectively with the Hajioannou Entity up to 9.99% of the outstanding voting securities of any publicly traded company
that is a Drybulk Vessel Business in whole or in part.

 

Section
3.3For the avoidance of doubt, nothing in this Agreement shall be construed to restrict the ability of N. Hadjioannou
or SafeFixing or any other N. Hadjioannou Entity to acquire, invest in, operate, manage or charter any vessel other than Drybulk
Vessels or any shipping-related business other than a Drybulk Vessel Business.

 

Article
IV

CONTROL OF SAFEFIXING; RIGHT OF FIRST OFFER

 

Section
4.1During the Restricted Period, in the event of a Proposed Change in Control of SafeFixing, the Company shall have
a 15 day right of first offer to purchase N. Hadjioannou’s direct or indirect interests in SafeFixing involved in the Proposed
Change in Control of SafeFixing (the “SafeFixing First Offer
Right”); provided, however, that if, after the Restricted Period, the Hajioannou Entities sell their interests
in SafeFixing to the Company pursuant to Article IV of the Hajioannou Entities Restrictive Covenant Agreement, N. Hadjioannou shall
sell his direct or indirect interests in SafeFixing to the Company on the same terms and conditions as the other Hajioannou Entities.
Set forth in Section 4.2 are the procedures applicable to the SafeFixing First Offer Right.

 

Section
4.2Set forth below are the procedures applicable to the Permitted Acquisition First Offer Right and the SafeFixing First
Offer Right. For purposes of this Section 4.2, the term “Sale
Transaction” shall mean (i) the sale or transfer of ownership of the Permitted Acquisition by N. Hadjioannou (directly
or indirectly through N. Hadjioannou Entity), as described in Section 3.2(a), in the case of a Permitted Acquisition First Offer
Right and (ii) a Proposed Change in Control of SafeFixing, as described in Section 4.1, in the case of a SafeFixing First Offer
Right.

 

(a)Prior
to engaging in any negotiations or otherwise offering to consummate a Sale Transaction with any third party, N. Hadjioannou shall
provide written notice of his intent to engage in a Sale Transaction (a “First
Offer Notice”) and shall specify in such First Offer Notice the material terms and conditions (including the consideration
to be paid, which shall be in cash) on which he would be willing to consummate a Sale Transaction with the Company, including any
liabilities to be assumed by the Company.

 

(b)The
Company shall notify N. Hadjioannou within the First Offer Period that either (i) the Company does not wish to participate in a
Sale Transaction (a “Negative Response”) or
(ii) the Company does wish to participate in a Sale Transaction, subject to the negotiation of the terms and conditions of the
Sale Transaction in accordance with the provisions of this Section 4.2 (an “Affirmative
Response”).

    	7

    	

    

(c)In
the event of an Affirmative Response, the Company and N. Hadjioannou shall negotiate in good faith during the First Offer Period
the terms and conditions of an agreement for the consummation of a Sale Transaction with the Company and such terms and conditions
are to be based on the terms and conditions set forth in the First Offer Notice.

 

(d)In
the event of a Negative Response or in the event the Company and N. Hadjioannou are unable to agree on the terms and conditions
of an agreement for the consummation of a Sale Transaction during the First Offer Period, then N. Hadjioannou may consummate a
Sale Transaction within 120 days after the earlier of the date N. Hadjioannou receives a Negative Response and the end of the First
Offer Period with a third party on terms and conditions as to price that are not more favorable, and on such other terms and conditions
that are not materially more favorable, to the proposed purchaser than the terms and conditions specified in the First Offer Notice.

 

(e)If
a Sale Transaction is not consummated with a third party within 120 days after the earlier of the date of the Negative Response
and the end of the First Offer Period in accordance with clause (d) then N. Hadjioannou shall not thereafter engage in a Sale Transaction
without first offering the Company a Permitted Acquisition First Offer Right or SafeFixing First Offer Right, as applicable, in
the manner provided above.

 

Section
4.3N. Hadjioannou and the Company acknowledge that all potential transfers pursuant to Section 3.2(a) and this Article
W are subject to obtaining any and all written consents of governmental authorities and offer non-affiliated third parties.

 

Article
V

NOTICES

 

Section
5.1All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder,
shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day
to a party at its respective address set forth below:

 

Safe Bulkers, Inc.

do Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Chief Executive Officer

Telefax: 30-210-895-6900

    	8

    	

    

Nicolaos Hadjioannou

c/o Safety Management Overseas S.A.

32 Avenue K. Karamanli

P.O. Box 70837

16605 Voula

Athens, Greece

Attention: Nicolaos Hadjioannou

 

Article
VI

APPLICABLE LAW AND JURISDICTION

 

Section
6.1This Agreement shall be governed by, and construed in accordance with, the laws of England.

 

Article
VII

ARBITRATION

 

Section
7.1Any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance
with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect
to the provisions of this Article XVII. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association
(LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

Section
7.2The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator
within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party
appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint
its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration
may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall
advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed
by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment
of a sole arbitrator.

 

Article
VIII

MISCELLANEOUS

 

Section
8.1This Agreement constitutes the sole understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements or understandings, written or oral, with respect thereto. This Agreement may
not be amended, waived or discharged except by an instrument in

    	9

    	

    

writing executed by the party against whom enforcement
of such amendment, waiver or discharge is sought.

 

Section
8.2It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly,
if any particular provision of this Agreement is adjudicated to be invalid or unenforceable, such provision will be deemed amended
to delete therefrom the portion thus adjudicated as invalid or unenforceable, such deletion to apply only with respect to the operation
of such provision in the particular jurisdiction in which such adjudications is made.

 

Section
8.3This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.

 

[Remainder of page intentionally left blank.]

    	10

    	

    

IN WITNESS whereof the undersigned have executed
this Agreement as of the date first above written.

 

	 	SAFE BULKERS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	NICOLAOS HADJIOANNOU	 
	 	 	 

 

[Signature
Page to the Nicolaos Hadjioannou Restrictive Covenant Agreement]

    	 

    	

    
APPENDIX III

FORM OF SHIPMANAGEMENT AGREEMENT

[TO BE ATTACHED]

    	A-A-1

    	

    

    APPENDIX IV

 

FORM OF SUPERVISION AGREEMENT

 

THIS AGREEMENT is made the ______day of                     ,
20[ • ] BETWEEN:

 

	(1)	[name of relevant member of the Group], a company incorporated under the laws of [•], whose registered office is [ADDRESS] (the “Owner”); and
	 	 
	(2)	SAFETY MANAGEMENT OVERSEAS S.A., a company incorporated under the laws of Panama, whose registered office is at [ADDRESS] and whose branch office is at 32 Avenue Karamanli, P.O. Box 70837, 16605 Voula, Athens, Greece (the “Construction Supervisor”).

 

WHEREAS:

 

By a shipbuilding contract dated                       
(the “Shipbuilding Contract”) and made between [•] (the “Builder”)
and the Owner, the Builder agreed to construct, to the order of the Owner, and sell to the Owner, a [•] bulk carrier, known
during construction as Hull No.[•] (the “Vessel”);

 

IT IS NOW AGREED as follows:

 

Article
I

 

DEFINITIONS

 

Section
1.1 Except as otherwise defined herein, all terms defined in the Shipbuilding Contract shall have the same respective
meanings when used herein.

 

Section
1.2 In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:

 

“Business
Day” means:

 

(i) in relation to a payment which is
to be made hereunder or under any other document, a day, other than a Saturday or Sunday or a public holiday, on which major retail
banks in New York, and (in respect of any payments which are to be made to the Builder) [•], are open for non-automated customer
services; and

 

(ii) in any other case, a day, other
than a Saturday or Sunday or a public holiday, on which major retail banks in Athens, Greece are open for non-automated customer
services.

    	A-II-1

    	

    

“Group
Management Agreement” means the agreement dated [     ] 2008 made between the Parent and the Construction Supervisor.

 

“Owner’s
Supplies” means all of the items to be furnished to the Vessel by the Owner in accordance with Article [•]
of the Shipbuilding Contract.

 

“Parent”
means Safe Bulkers Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes
its successors in title.

 

“Spares”
means the items to be designated as spares by the parties hereto at the time of the delivery of the Vessel.

 

“Supervision
Period” means the period from the execution of this Agreement to and including the earlier of (i) the date of
delivery of the Vessel pursuant to the Shipbuilding Contract and (ii) the date this Agreement is terminated.

 

Article
II

 

APPOINTMENT

 

Section
2.1 The Owner hereby appoints the Construction Supervisor, and the Construction Supervisor hereby agrees to act as the
Owner’s supervisor towards the Builder and as the “Owner’s Representative”
under the Shipbuilding Contract for the duration of the Supervision Period and to perform the duties and rights which rest with
the Owner regarding the construction and delivery of the Vessel in accordance with all of the provisions of the Shipbuilding Contract.
The Owner shall be responsible for, inter alia, determining the general policy of supervision of construction of the Vessel
and the scope of activities of the Construction Supervisor and, in the performance of its duties under this Agreement, the Construction
Supervisor shall at all times act strictly in accordance with any instructions or directions given to it by the Owner regarding
such general policy or, in the absence of such instructions or directions, in accordance with the standards of a prudent supervisor
providing services of the type to be provided under this Agreement, having due regard to the Owner’s interest. Any instructions
so given shall be consistent with the nature and scope of the supervision services required to be performed by the Construction
Supervisor under this Agreement and shall not require the Construction Supervisor to do or omit to do anything which may be contrary
to any applicable law of any jurisdiction or which is inconsistent or contrary to any of the rights and duties of the Owner under
the Shipbuilding Contract. Upon appointment the Owner shall furnish the Construction Supervisor with a full and complete copy of
the Shipbuilding Contract (which for the avoidance of doubt shall include the Specifications and the Plans).

 

Section
2.2 Specific Powers and Duties of the Construction Supervisor. Without prejudice to the generality of the appointment
made under Section 2.1, and (where applicable) by way of addition to the rights, powers and duties so conferred, the Construction
Supervisor shall, subject to this Section 2.2 and to Articles III

    	A-II-2

    	

    

and IV, have and be entrusted with the following rights,
powers and duties in relation to the Shipbuilding Contract and the Vessel:

 

(a) to
review, comment on, agree and approve the lists of plans and the drawings referred to; to attend the testing of the Vessel’s
machinery, outfitting and equipment and to request any tests or inspections which the Construction Supervisor may consider appropriate
or desirable and to review and comment on the results of all tests and inspections to the extent this is possible under the terms
of the Shipbuilding Contract; to carry out such inspections and give such advice or suggestions to the Builder as the Construction
Supervisor may consider appropriate and as the terms of the Shipbuilding Contract allow him to do; and to give notice to the Builder
in the event that the Construction Supervisor discovers any construction, material or workmanship which the Construction Supervisor
believes does not or will not conform to the requirements of the Shipbuilding Contract and the specifications again provided the
terms of the Shipbuilding Contract allows for such notice to be given;

 

(b) to
appoint a representative of the Construction Supervisor for the purposes specified in Article [•] of the Shipbuilding Contract;

 

(c) if
any alteration or addition to the Shipbuilding Contract becomes obligatory or desirable, to consult with the Builder and make recommendations
to the Owner as to whether or not acceptance should be given to any proposal notified to the Owner by the Builder;

 

(d) to
request and agree to any minor alterations, additions or modifications to the Vessel or the specifications and any substitute materials
pursuant to Article [•] which the Construction Supervisor may consider appropriate or desirable, provided that if the cost
of such variations or substitute materials would have the effect of altering the Contract Price (as defined in the Shipbuilding
Contract) by more than [five per cent (5%)] from the Contract Price on the date hereof or the amount of any of the installments
of the Contract Price due under the Shipbuilding Contract prior to the delivery of the Vessel, the Construction Supervisor shall
notify the same to the Owner in writing and obtain the Owner’s instructions before taking any action in relation thereto;
to receive from and transmit to the Builder information relating to the requirements of the classification society and to give
instructions and agree with the Builder regarding alterations, additions or changes in connection with such requirements; and to
approve the substitution of materials as requested by the Builder;

 

(e) to
attend and witness the trials of the Vessel to the extent this is permitted under the terms of the Shipbuilding Contract;

 

(f) to
determine whether the Vessel has been designed, constructed, equipped and completed in accordance with, and complies with, the
Shipbuilding Contract and the Specifications and Plans (each as defined in the Shipbuilding Contract); to give the Builder a notice
of acceptance or (as the case may be)

    	A-II-3

    	

    

rejection of the Vessel, to require or request
any further test and inspection of the Vessel to the extent this is possible under the terms of the Shipbuilding Contract, and
to give and receive any further or other notice relative to such matters and generally to advise the Owner in respect of all such
matters;

 

(g) to
sign on behalf of the Owner any protocols as to sea trials, consumable stores, delivery and acceptance or otherwise, having first
ascertained with the Owner the appropriateness of so doing;

 

(h) to
accept on behalf of the Owner the documents specified in Article [•], Paragraph [•] of the Shipbuilding Contract to be
delivered by the Builder at delivery of the Vessel under the Shipbuilding Contract and to confirm receipt thereof to the Owner;

 

(i) to
give and receive on behalf of the Owner any notice contemplated by the Shipbuilding Contract, provided that the Construction Supervisor
shall not have authority to give on behalf of the Owner any notice which the Owner may be entitled to give to cancel, repudiate
or rescind the Shipbuilding Contract without the prior written consent of the Owner; and

 

(j) to
purchase, after being placed in funds by the Owner, all Owner’s Supplies as agent of the Owner and supply and deliver the
same together with all necessary specifications, plans, drawings, instruction books, manuals, test reports and certificates to
the Builder as provided in the Shipbuilding Contract, and provide to the Owner a list of all such Owner’s Supplies as soon
as possible.

 

Section
2.3 The Construction Supervisor shall discharge its responsibilities under this Clause 2 as the Owner’s agent.

 

Section
2.4 In the event that the Construction Supervisor uses its own funds to purchase Owner’s Supplies, the cost of
supplying and delivering Owner’s Supplies pursuant the relevant terms of the Shipbuilding Contract shall be reimbursed by
the Owner to the Construction Supervisor on the date the Construction Supervisor submits to the Owner supporting invoices in respect
of such cost.

 

Article
III

 

CONSTRUCTION SUPERVISOR’S
DUTIES

REGARDING CONSTRUCTION

 

Section
3.1 The Construction Supervisor undertakes with the Owner with respect to the Shipbuilding Contract:

 

(a) to
notify the Owner in writing promptly on becoming aware of any likely change to any of the dates on which any installment under
the Shipbuilding Contract is expected to be due;

    	A-II-4

    	

    

(b) to
(i) notify the Owner in writing of the expected date on which the launching or, as the case may be, sea trials of the Vessel is
or are to take place and (ii) promptly on the same day as the launching or, as the case may be, sea trials of the Vessel takes
or take place to confirm that the launching or, as the case may be, sea trials of the Vessel has or have taken place and, where
relevant, that the amount specified in such confirmation is due and payable;

 

(c) to
(i) advise the Owner in writing, four (4) Business Days prior to the date on which the delivery installment under the Shipbuilding
Contract is anticipated to become due, of the times and amounts of payments to be made to the Builder under the Shipbuilding Contract
and any amount due to the Construction Supervisor for Owner’s Supplies not already settled and (ii) promptly confirm the
same on the day on which such installment becomes due under the terms of the Shipbuilding Contract;

 

(d) not
to accept the Vessel or delivery of the Vessel on the Owner’s behalf without the Owner’s prior written approval and
unless the Construction Supervisor shall have previously certified to the Owner in writing, in the form of the certificate set
out in Schedule 1 to this Agreement, that:

 

(i) the
Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with
the Shipbuilding Contract and the Specifications and Plans;

 

(ii) there
is, to the best of the Construction Supervisor’s knowledge and belief having made due enquiry with the Builder, no lien or
encumbrance on the Vessel other than the lien in favor of the Builder in respect of the delivery installment of the Contract Price
due in accordance with the relevant terms of the Shipbuilding Contract;

 

(iii) the
Vessel is recommended for classification by the relevant classification society referred to in the Shipbuilding Contract (and the
Construction Supervisor shall attach to its certificate the provisional certificate of such classification society recommending
such classification of the Vessel or a duplicate or photocopy of such provisional certificate or otherwise provide evidence of
such classification to the Owner);

 

(e) on
receipt thereof from the Builder promptly to deliver the documents specified in Article [•], Paragraph [•] of the Shipbuilding
Contract to the Owner or as the Owner may direct; and

 

(f) solely
with the prior written approval of the Owner, to request from or agree with the Builder any material alterations, additions or
modifications to the Vessel:

    	A-II-5

    	

    

Article
IV

 

CONSTRUCTION SUPERVISOR’S
GENERAL OBLIGATIONS

 

Section
4.1 The Construction Supervisor undertakes to the Owner, with respect to the exercise and performance of its rights,
powers and duties as the Owner’s representative under this Agreement, as follows:

 

(a) it
will ensure the due and punctual observance and performance of all conditions, duties and obligations imposed on the Owner by the
Shipbuilding Contract (other than to pay the Contract Price) and will not without the prior written consent of the Owner:

 

(i) exercise
any rights of the Owner to cancel, repudiate or rescind the Shipbuilding Contract;

 

(ii) waive,
modify or suspend any provision of the Shipbuilding Contract if as a result of such waiver, modification or suspension the Owner
will or may suffer any adverse consequences; and

 

(b) it
will, at its own expense, keep all necessary and proper books, accounts, records and correspondence files relating to its duties
and activities . under this Agreement and shall send quarterly reports to the Owner concerning the progress of the design and construction
of the Vessel and keep the Owner promptly informed of any deviations from the building program.

 

Article
V

LIABILITY AND INDEMNITY

 

Section
5.1 Save for the obligation of the Owner to pay any moneys due to the Construction Supervisor hereunder, neither the
Owner nor the Construction Supervisor shall be under any liability to the other for any failure to perform any of their obligations
hereunder by reason of Force Majeure. “Force Majeure” shall mean any
cause whatsoever of any nature or kind beyond the reasonable control of the Owner or the Construction Supervisor, including, without
limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency
or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes
of a similar nature.

 

Section
5.2 The Construction Supervisor, including its officers, directors, employees, shareholders, agents, and any sub-contractors
(the “Construction Supervisor Related Parties”), shall be under no
liability whatsoever to the Owner or to any third party (including the Builder) for any loss, damage, delay or expense of whatsoever
nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with the delayed
or non-conforming delivery of the Vessel), and howsoever arising in the course of the performance of this Agreement,

    	A-II-6

    	

    

unless and to the extent that the same is proved to
have resulted solely from the gross negligence or willful misconduct of the Construction Supervisor, its officers, employees, agents
or any of its sub-contractors.

 

Section
5.3 The Owner shall indemnify and hold harmless the Construction Supervisor Related Parties against all actions, proceedings,
claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them
arising out of or in connection with the performance of this Agreement and against and in respect of any loss, damage, delay or
expense of whatsoever nature (including legal costs and expenses on a full indemnity basis), whether direct or indirect, incurred
or suffered by any Construction Supervisor Related Party in the performance of this Agreement, unless incurred or suffered due
to the gross negligence or willful misconduct of any Construction Supervisor Related Party.

 

Section
5.4 It is hereby expressly agreed that no employee or agent of the Construction Supervisor (including any sub-contractor
from time to time employed by the Construction Supervisor) shall in any circumstances whatsoever be under any liability whatsoever
to the Owner or any third party for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from
any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice
to the generality of the foregoing provisions in this Article V, every exemption, limitation, condition and liberty herein contained
and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Construction Supervisor
or to which the Construction Supervisor is entitled hereunder shall also be available and shall extend to protect every such employee
or agent of the Construction Supervisor acting as aforesaid, and for the purpose of all the foregoing provisions of this Article
V, the Construction Supervisor is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons
who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall
to this extent be or be deemed to be parties to this Agreement.

 

Section
5.5 The provisions of this Article V shall survive any termination of this Agreement.

 

Article
VI

 

FEES

 

Section
6.1 In consideration of the performance of the duties assigned to the Construction Supervisor in this Agreement, the
Owner shall pay to the Construction Supervisor the sum of US$375,000 for its total supervision costs in connection with the supervision
of the construction of the Vessel, plus any expenses incurred under the Shipbuilding Contract against presentation of supporting
invoices from the Construction Supervisor which the Construction Supervisor shall supply to the Owner at the same time as payment
is requested. The fee payable hereunder to the Construction Supervisor shall include all costs which are incurred by the Construction

    	A-II-7

    	

    

Supervisor in connection with the ordinary exercise
and performance by the Construction Supervisor of the rights, powers and duties entrusted to it pursuant to this Agreement. The
supervision fee will be paid in two installments as follows:

 

(a) US$187,500
on execution of this Agreement; and

 

(b) US$187,500
upon the Construction Supervisor advising the Owner of the completion of the sea trial run of the Vessel.

 

For the avoidance of doubt, the Construction Supervisor can demand payment
of the fee and other amounts payable hereunder from the Parent pursuant to the relevant provisions of the Group Management Agreement.

 

Article
VII

 

COMMENCEMENT - TERMINATION

 

Section
7.1 This Agreement shall come into effect on the date hereof and shall continue until the delivery of the Vessel in accordance
with the Shipbuilding Contract unless terminated earlier pursuant to the terms of Section 7.2, Section 7.3, Section 7.4 or Section
7.5 hereof.

 

Section
7.2 The Owner shall be entitled to terminate this Agreement by notice in writing to the Construction Supervisor if the
Construction Supervisor defaults in the performance of any material obligation under this Agreement, subject to a cure right of
20 Business Days following written notice by the Owner.

 

Section
7.3 This Agreement shall terminate automatically if:

 

(a) the Shipbuilding
Contract is cancelled, rescinded or terminated; or

 

(b) the Group
Management Agreement is terminated.

 

Section
7.4 The Construction Supervisor shall be entitled to terminate this Agreement by notice in writing to the Owner if:

 

(a) any
moneys payable by the Owner under this Agreement is not paid when due or if due on demand within 10 Business Days following demand
by the Construction Supervisor; or

 

(b) the
Owner defaults in the performance of any other material obligations under this Agreement, subject to a cure right of 20 Business
Days following written notice by the Construction Supervisor; or

 

Section
7.5 Either party shall be entitled to terminate this Agreement immediately if:

    	A-II-8

    	

    

(a) the
other party ceases to conduct business, or all or substantially all of the equity-interests, properties or assets of either such
party is sold, seized or appropriated; or

 

(b) (i)
the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under
any law for the protection of debtors or adopts a plan of liquidation; (ii) a petition is filed against the other party seeking
to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 40 Business Days of its filing; (iii)
the other party shall admit in writing its insolvency or its inability to pay its debts as they mature; (iv) an order is made for
the appointment of a liquidator, manager, receiver or trustee of the other party of all or a substantial part of its assets; (v)
or if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of the other party’s
undertaking, property or assets; or (vi) if an order is made or a resolution is passed for the other party’s winding up;
or

 

(c) a
distress, execution, sequestration or other process is levied or enforced upon or sued out against the other party’s property
which is not discharged within 20 Business Days; or

 

(d) the
other party ceases or threatens to cease wholly or substantially to carry on its business otherwise than for the purpose of a reconstruction
or amalgamation without insolvency previously approved by the terminating party; or

 

(e) the
other party is prevented from performing its obligations hereunder by reasons of Force Majeure for a period of two or more consecutive
months.

 

Section
7.6 In the event of termination due to the Construction Supervisor’s default, then it shall not be entitled to
receive any payment in respect of the fees and other amounts described in Article VI becoming due and payable after the date of
such termination.

 

Article
VIII

 

EMPLOYEES

 

Section
8.1 None of the employees and/or sub-contractors of the Construction Supervisor shall constitute, for the purposes of
this Agreement, sub-agents of the Owner. The Construction Supervisor, in its capacity as employer and contractor (and not in its
capacity as agent for the Owner), shall (a) be responsible for the salaries, expenses and costs in respect of each of its employees
and sub-contractors (not in its capacity as agent for the Owner) and (b) save for the provisions of Article V hereof, indemnify
its employees and sub-contractors for any liabilities and losses incurred by such employees and sub-contractors.

    	A-II-9

    	

    

Article
IX

 

GOVERNING LAW - ARBITRATION

 

Section
9.1 This Agreement shall be governed by and be construed in accordance with the laws of England.

 

Section
9.2 Any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance
with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect
to the provisions of this Article XVII. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association
(LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

Section
9.3 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator
within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party
appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint
its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration
may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall
advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed
by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment
of a sole arbitrator.

 

Article
X

 

COUNTERPARTS

 

Section
10.1 This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and
the same instrument.

 

Article
XI

 

NOTICES

 

Section
11.1 Every notice or other communication under this Agreement shall:

 

(a) be
in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means
of telecommunication (other than telex) in permanent written form;

    	A-II-10

    	

    

(b) be deemed
to have been received, in the case of a letter, when delivered personally or three (3) days after it has been put into the post
and, in the case of a facsimile transmission or other means of telecommunication (other than telex) in permanent written form,
at the time of dispatch (provided that if the date of dispatch is a Saturday or Sunday or a public holiday in the country of the
addressee or if the time of dispatch is after the close of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next day which is not a Saturday or Sunday or public holiday); and

 

(c) be sent:

 

	 	(i)	to
                                         the Construction Supervisor at:
	 	 	 
	 	 	Safety Management Overseas S.A.

                                        32 Avenue K. Karamanli

                                        16673 Voula

                                        Athens, Greece

                                        Facsimile No.: +30 210 895 6900

                                        Attention: Managing Director
	 	 	 
	 	(ii)	to the Owner at:
	 	 	 
	 	 	C/o Safe Bulkers, Inc.

                                        32 Avenue K. Karamanli

                                        P.O. Box 70837

                                        16605 Voula

                                        Athens, Greece

                                        Facsimile No.: +30 210 895 6900

                                        Attention: President

 

or to such other address and/or numbers for a party as is notified by
such party to the other party under this Agreement.

 

Section
11.2 Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in
the English language.

 

Section
11.3 This Agreement shall not create benefits on behalf of any other person not a party to this Agreement, and this Agreement
shall be effective only as between the parties hereto, their successors and permitted assigns.

    	A-II-11

    	

    

IN WITNESS of which this Agreement has been duly
executed the day and year first before written.

 

For the Owner

 

For the Construction Supervisor

    	A-II-12

    	

    

SCHEDULE 1

 

FORM OF CONSTRUCTION CERTIFICATE

 

[On the letterhead of the Construction Supervisor]

 

[Vessel Owner] (the “Owner”)

[Address]

Facsimile: [      ]

Attention: [      ]

 

Date: ____________

 

Dear Sirs,

 

[Name of Builder] (the “Builder”), [Name of Vessel]
(the “Vessel”)

 

We refer to the construction supervision agreement
dated [                   ] between
the Owner and us (the “Supervision Agreement”).

 

Words and expressions defined in the Supervision
Agreement (whether expressly or by incorporation by reference to another document) shall have the same meaning where used in this
certificate.

 

We hereby certify, pursuant to Section 3.1(d) of
the Supervision Agreement, as follows:

 

(i)
the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance
with the Shipbuilding Contract and the Specifications and Plans; and

 

(ii)
the Vessel is recommended for classification by [Name of the classification society] (the “Classification
Society”).

    	S-1-1

    	

    

With respect to paragraph (ii) above, please find
attached to this certificate the provisional certificate of the Classification Society recommending such classification of the
Vessel / a duplicate or photocopy of the provisional certificate of the Classification Society recommending such classification
of the Vessel / the following evidence of the Classification Society’s recommendation of such classification of the Vessel
[     ].

 

	 	Yours faithfully,
	 	 
	 	 
	 	for and on behalf of
	 	SAFETY MANAGEMENT OVERSEAS S.A.

    	S-1-2

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