Document:

Exhibit 4.50

EUROSEAS LTD.

2014 EQUITY INCENTIVE PLAN

ARTICLE I.

 General

	1.1.	Purpose

The Euroseas Ltd. 2014 Equity Incentive Plan (the "Plan") is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Euroseas Ltd. (the "Company"), with incentives to (a) enter into and remain in the service of the Company, its Subsidiaries (as defined below) and/or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.

	1.2.	Administration

(a)            Administration.  The Plan shall be administered by the Company's Board of Directors (referred to herein as the "Board") or such committee of the Board as may be designated by the Board to administer the Plan (the Board or such committee, as applicable, being referred to herein as the "Administrator"); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), the Administrator shall be composed of two or more directors, each of whom is a "Non-Employee Director" (a "Non-Employee Director") under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the "SEC") under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time ("Rule 16b-3")), and (ii) the Administrator shall be composed solely of two or more directors who are "independent directors" under the rules of any stock exchange on which the Company's Common Stock (as defined below) is traded; provided further, however, that, (A) the requirement in the preceding clause (i) shall apply only when required to exempt an Award (as defined below) intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan, applicable law and the applicable rules and regulations of any stock exchange on which the Common Stock is listed for trading, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Key Persons to receive Awards under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9)  correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons (as defined below).

(b)            General Right of Delegation.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, to the extent applicable, or (ii) officers of the Company to whom authority to grant or amend Awards has been delegated hereunder or directors of the Company; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.

(c)            Indemnification.  No member of the Board, the Administrator or any officer or employee of the Company, its Subsidiaries or its Affiliates or any of their agents (each such Person, a "Covered Person") shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's Articles of Incorporation or Bylaws, each as amended from time to time.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company's Articles of Incorporation or Bylaws, each as amended from time to time, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.

(d)            Delegation of Authority to Senior Officers.  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to Key Persons who are employees (other than officers) of the Company, its Subsidiaries and its Affiliates (including any such prospective employee) and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries.

(e)            Awards to Non-Employee Directors.  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards.  In any such case, the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.

	1.3.	Persons Eligible for Awards

The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries and Affiliates (collectively, "Key Persons") as the Administrator shall select.

	1.4.	Types of Awards

Awards may be made under the Plan in the form of (a) stock options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) phantom stock units and (f) unrestricted stock, all as more fully set forth in the Plan.  The term "Award" means any of the foregoing that are granted under the Plan.

	1.5.	Shares Available for Awards; Adjustments for Changes in Capitalization

(a)            Maximum Number.  Subject to adjustment as provided in Section 1.5(c), the aggregate number of shares of common stock of the Company, par value $0.03 ("Common Stock"), with respect to which Awards may at any time be granted under the Plan shall be 2,500,000.  The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.

(b)            Source of Shares; Certificate Legends.  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.

(c)            Adjustments.

(i)            In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan.

(ii)            The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company, any Subsidiary or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however, that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code (as defined below).

(iii)            In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company's assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries, the Administrator shall have the power to:

(1)            provide that outstanding options, stock appreciation rights, phantom stock units and/or restricted stock units (including any related dividend equivalent right) shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor entity or a parent or subsidiary entity;

(2)            cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, phantom stock units and/or restricted stock units (including each dividend equivalent right related thereto) outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) over the aggregate Exercise Price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, (x) any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor and (y) any phantom stock unit that by its terms may be cancelled without payment therefor may be cancelled and terminated without any payment or consideration therefor to the extent so provided in the applicable Award Agreement); or

(3)            notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).

(iv)            In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):

		(A)	The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and

		(B)	The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.

	1.6.	Definitions of Certain Terms

(a)            "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company, (ii) any entity in which the Company has a significant equity interest and (iii) Eurobulk Ltd., Eurochart S.A. and any other entity controlled by Aristides J. Pittas or the Pittas family, in each case as determined by the Administrator.

(b)            Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term "for Cause" shall be defined as follows:

(i)            if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or a Subsidiary or Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" under such agreement; or

(ii)            if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:

		(A)	any failure by the grantee substantially to perform the grantee's employment or consultancy/service or Board membership duties;

		(B)	any excessive unauthorized absenteeism by the grantee;

		(C)	any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;

		(D)	any act or omission by the grantee that is or may be injurious to the Company, any Subsidiary  or any Affiliate, whether monetarily, reputationally or otherwise;

		(E)	any act by the grantee that is inconsistent with the best interests of the Company, any Subsidiary or any Affiliate;

		(F)	the grantee's gross negligence that is injurious to the Company, any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;

		(G)	the grantee's material violation of any of the policies of the Company, a Subsidiary or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;

		(H)	the grantee's material breach of his or her employment or service contract with the Company, any Subsidiary or any Affiliate;

		(I)	the grantee's unauthorized (1) removal from the premises of the Company, any Subsidiary or an Affiliate of any document (in any medium or form) relating to the Company, any Subsidiary or an Affiliate or the customers or clients of the Company, any Subsidiary or an Affiliate or (2) disclosure to any Person of any of the Company's, any Subsidiary's or any Affiliate's, confidential or proprietary information;

		(J)	the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and

		(K)	the grantee's commission of any act involving dishonesty or fraud.

Any rights the Company, any Subsidiary or any Affiliates may have under the Plan in respect of the events giving rise to a termination or dismissal "for Cause" shall be in addition to any other rights the Company, any Subsidiary or its Affiliates may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee's employment, consultancy/service relationship or Board membership is (or is deemed to have been) terminated "for Cause" shall be made by the Administrator.  If, subsequent to a grantee's voluntary termination of employment or consultancy/service relationship or voluntarily resignation from the Board or involuntary termination of employment or consultancy/service relationship without Cause or removal from the Board other than "for Cause", it is discovered that the grantee's employment or consultancy/service relationship or Board membership could have been terminated "for Cause", the Administrator may deem such grantee's employment or consultancy/service relationship or Board membership to have been terminated "for Cause" upon such discovery and determination by the Administrator.

(c)            "Code" shall mean the Internal Revenue Code of 1986, as amended.

(d)            Unless otherwise set forth in the applicable Award Agreement, "Disability" shall mean the grantee's being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee's, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee's employer.  The existence of a Disability shall be determined by the Administrator.

(e)            "Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.

(f)            "Exercise Price" shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.

(g)            The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the Nasdaq Global Select Market (or the Over-the-Counter Bulletin Board or such other market on which the Common Stock is trading, if not trading on the Nasdaq Global Select Market), as reported for such day in The Wall Street Journal (or, if not reported in The Wall Street Journal, such other reliable source as the Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator.  The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.

(h)            "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.

(i)            "Repricing" shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.

(j)            "Subsidiary" shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.

ARTICLE II.

 Awards Under The Plan

	2.1.	Agreements Evidencing Awards

Each Award granted under the Plan shall be evidenced by a written certificate ("Award Agreement"), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

	2.2.	Grant of Stock Options and Stock Appreciation Rights

(a)            Stock Option Grants.  The Administrator may grant stock options ("options") to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  No option will be treated as an "incentive stock option" for purposes of the Code.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 of the Code, as applicable.

(b)            Option Exercise Price.  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock. Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.

(c)            Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.  Furthermore, it shall be the intent of the Administrator, in granting stock appreciation rights to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such stock appreciation rights so as to comply with the requirements of Section 409A and/or 457 of the Code, to the extent applicable.

(d)            Nature of Stock Appreciation Rights.  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.

	2.3.	Exercise of Options and Stock Appreciation Rights

Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:

(a)            Timing and Extent of Exercise.  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.

(b)            Notice of Exercise.  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company's designated exchange agent (the "Exchange Agent"), on such form and in such manner as the Administrator shall prescribe.

(c)            Payment of Exercise Price.  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.

(d)            Delivery of Certificates Upon Exercise.  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form.  If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee's stockbroker.

(e)            No Stockholder Rights.  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares or an account in the name of the grantee evidences ownership of stock in uncertificated form.  Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.

	2.4.	Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service

(a)            General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship or dismissal from the Board, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship or dismissal from the Board but in no event after the original expiration date of the Award; it being understood that then outstanding options and stock appreciation rights shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.

(b)            Dismissal "for Cause".  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board "for Cause", all options and stock appreciation rights not theretofore exercised shall immediately terminate upon the grantee's termination of employment or consultancy/service relationship or dismissal from the Board.

(c)            Retirement.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board as the result of his or her retirement (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such retirement, remain exercisable for a period of three years after such retirement; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.  For this purpose, unless otherwise set forth in the applicable Award Agreement, "retirement" shall mean a grantee's resignation of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board, with the Company's, its Subsidiary's or Affiliate's prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company, a Subsidiary or Affiliate (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the Company, a Subsidiary or Affiliate (using any method of calculation the Administrator deems appropriate).

(d)            Disability.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or a dismissal from the Board by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination or dismissal, remain exercisable for a period of one year after such termination or dismissal; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

		(e)	Death.

(i)            Termination of Employment/Service as a Result of Grantee's Death.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or leaves the Board as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

(ii)            Restrictions on Exercise Following Death.  Any such exercise of an Award following a grantee's death shall be made only by the grantee's executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee's will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee's personal representative or the recipient of a specific disposition under the grantee's will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.

(f)            Administrator Discretion.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.

2.5.            Transferability of Options and Stock Appreciation Rights

Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee's spouse, children or grandchildren ("Immediate Family Members"), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

	2.6.	Grant of Restricted Stock

(a)            Restricted Stock Grants.  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine.

(b)            Issuance of Stock Certificate.  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator's sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and , unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.

(c)            Custody of Stock Certificate.  Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company (or such other custodian as may be designated by the Administrator) until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.

(d)            Nontransferability.  Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon, except as otherwise specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.

(e)            Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board for any reason other than death or Disability shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board as the result of his or her death or Disability, all shares of restricted stock that have not yet vested as of the date of such termination or dismissal shall immediately vest as of such date; it being understood that then outstanding restricted stock Awards shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).

	2.7.	Grant of Restricted Stock Units

(a)            Restricted Stock Unit Grants.  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee's restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that it qualifies as a "short-term deferral" pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.

(b)            Dividend Equivalents.  The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, and/or, if payment of the vested Award is deferred, during the period of such deferral following such vesting event, on the shares of Common Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, (B) at the time at which the Award's vesting event occurs, conditioned upon the occurrence of the vesting event, (C) once the Award has vested, at the same time as the underlying dividends are paid, regardless of the fact that payment of the vested restricted stock unit has been deferred, and/or (D) at the time at which the corresponding vested restricted stock units are paid, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.

(c)            No Stockholder Rights.  No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award or an account in the name of the grantee evidences ownership of stock in uncertificated form (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13.  Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.

(d)            Nontransferability.  No restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of, except as otherwise specifically provided in this Plan or the applicable Award Agreement.

(e)            Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board for any reason other than death or Disability shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates or dismissal from the Board as the result of his or her death or Disability, all restricted stock units that have not yet vested as of the date of such termination or dismissal shall immediately vest as of such date; it being understood that then outstanding restricted stock units shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(e).

2.8.            Grant of Unrestricted Stock

The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.  Shares may be thus granted or sold in respect of past services or other valid consideration.

	2.9.	Grant of Phantom Stock Units

(a)            Phantom Stock Unit Grants.  The Administrator may grant phantom stock units to such Key Persons, in such amounts, and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  Each phantom stock unit shall represent a notional share of Common Stock.  No grantee of a phantom stock unit shall have any rights of stockholder of the Company with respect to such Award unless and until the Award is cancelled in exchange for shares of Common Stock, which issuance of shares shall be subject to Sections 3.2, 3.4 and 3.13.  Holders of phantom stock units shall not (i) be entitled to any voting rights with respect to any phantom stock units and (ii) be entitled, by reason of holding any phantom stock unit, to any distributions payable to shareholders of Common Stock; provided, however, that the Administrator may provide that the phantom stock unit shall be entitled to receive dividend equivalent rights, on such terms and conditions as the Administrator shall determine.  The Administrator may determine that the phantom stock unit may be cancelled on such terms and conditions as set forth in the applicable Award Agreement, including (1) for no payment, (2) in exchange for a cash payment or (3) in exchange for shares of Common Stock.

(b)            Other Provisions.  Phantom stock units may be made independently of or in connection with any other Award under the Plan.  A grantee of a phantom stock unit Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a phantom stock unit Award Agreement in such form as the Administrator shall determine.

(c)            Nontransferability.  Phantom stock units may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as otherwise specifically provided in this Plan or the applicable Award Agreement.

(d)            Grants to U.S. Taxpayers.  No grant of a phantom stock unit Award to an individual who is then subject to the requirements of Sections 409A and/or 457A of the Code shall be made under the Plan unless the Award, by its terms, is exempt from Sections 409A and/or 457A of the Code or otherwise complies with such sections of the Code.

ARTICLE III.

 Miscellaneous

	3.1.	Amendment of the Plan; Modification of Awards

(a)            Amendment of the Plan.  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee's death, the Person having the rights to the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.

(b)            Stockholder Approval Requirement.  If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan.

(c)            Modification of Awards.  The Administrator may cancel any Award under the Plan.  The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Section 2.4, 2.6(e) or 2.7(c) with respect to the termination of the Award upon termination of employment or consultancy/service relationship or dismissal from the Board; provided, however, that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee's death, the Person having the rights to the Award).  In making any modification to an Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administrator may consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code in respect of Awards granted under the Plan to individuals subject to such provisions of the Code.

	3.2.	Consent Requirement

(a)            No Plan Action Without Required Consent.  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.

(b)            Consent Defined.  The term "Consent" as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or any other Person.

	3.3.	Nonassignability

Except as provided in Section 2.4(e), 2.5, 2.6(d), 2.7(e) or 2.9(c), (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee's legal representative or the grantee's permissible successors or assigns (as authorized and determined by the Administrator).  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.

	3.4.	Taxes

(a)            Withholding.  A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company, its Subsidiaries and Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld.  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.

(b)            Liability for Taxes.  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Section 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code.  The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.

	3.5.	Change in Control

(a)            Change in Control Defined.  Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:

(i)            any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires "beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; provided, however, that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock ordinarily entitled to elect directors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such acquisition or (D) Aristides J. Pittas or the Pittas family or any entity which Aristides J. Pittas or the Pittas family directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act);

(ii)            the sale of all or substantially all the Company's assets in one or more related transactions to any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity; provided, however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to Aristides J. Pittas or the Pittas family or an entity which Aristides J. Pittas or the Pittas family directly or indirectly "controls" (as defined in Rule 12b-2 under the 1934 Act) or (C) to an entity (the "Acquiring Entity") which has acquired all or substantially all the Company's assets if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such sale in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;

(iii)            any merger, consolidation, reorganization or similar event of the Company or any Subsidiary; provided, however, that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event;

(iv)            the approval by the Company's stockholders of a plan of complete liquidation or dissolution of the Company; or

(v)            during any period of 12 consecutive calendar months, individuals:

(A)            who were directors of the Company on the first day of such period, or

(B)            whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,

shall cease to constitute a majority of the Board.

A Change of Control shall not be deemed to have occurred for purpose of the Plan as a result of an Exempted Transaction (as such term is defined in that certain First Amendment to Shareholders Rights Agreement, dated as of March 25, 2010, to the Shareholders Rights Agreement, dated as of May 18, 2009, between Euroseas Ltd., a Marshall Islands corporation and American Stock Transfer and Trust Company, LLC, as rights agent, as amended from time to time).

Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.

(b)            Effect of a Change in Control.  Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:

(i)            notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any forfeiture provisions thereon imposed pursuant to the Plan and the applicable Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;

(ii)            to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate;

(iii)            a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board for any reason, other than a termination or dismissal "for Cause", concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship or dismissal from the Board, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee's termination of employment or consultancy/service relationship or dismissal from the Board.

(c)            Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.

	3.6.	Operation and Conduct of Business

Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company, any Subsidiary or any Affiliate from taking any action with respect to the operation and conduct of its business that it deems appropriate or in its best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company, any Subsidiary or any Affiliate, any merger or consolidation of the Company, any Subsidiary or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company, any Subsidiary or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company, any Subsidiary or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.

	3.7.	No Rights to Awards

No Key Person or other Person shall have any claim to be granted any Award under the Plan.

	3.8.	Right of Discharge Reserved

Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company, any Subsidiary or any Affiliate, his or her consultancy/service relationship with the Company, any Subsidiary or any Affiliate, or his or her position as a director of the Company, any Subsidiary or any Affiliate, or affect any right that the Company, any Subsidiary or any Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.

	3.9.	Non-Uniform Determinations

The Administrator's determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.

	3.10.	Other Payments or Awards

Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

	3.11.	Headings

Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such section, subsection, paragraph or subdivision.

	3.12.	Effective Date and Term of Plan

(a)            Adoption; Stockholder Approval.  The Plan was approved by the Board on July 31, 2014 and shall become effective on October 1, 2014.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's stockholders.

(b)            Termination of Plan.  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board.

	3.13.	Restriction on Issuance of Stock Pursuant to Awards

The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder's then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person's undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.

	3.14.	Requirement of Notification of Election Under Section 83(b) of the Code

If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.

	3.15.	Severability

If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

3.16.            Sections 409A and 457A

To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.

	3.17.	Forfeiture; Clawback

The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee's breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any Subsidiary or Affiliate, (b) a grantee's breach of any employment or consulting agreement with the Company or any Subsidiary or Affiliate, (c) a grantee's termination for Cause or (d) a financial restatement that reduces the amount of compensation under the Plan previously awarded to a grantee that would have been earned had results been properly reported.

	3.18.	No Trust or Fund Created

Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company, any Subsidiary or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company, any Subsidiary or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company, any Subsidiary or any Affiliate.

	3.19.	No Fractional Shares

No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

3.20.            Governing Law

The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.Exhibit 4.51

 

Dated 12 January 2015

________________________

HSBC BANK PLC

as Lender

-and-

ULTRA TWO SHIPPING LTD

as Borrower

_______________________________________________

FINANCIAL AGREEMENT

_______________________________________________

Relating to a term loan facility not exceeding

 US$19,950,000

 

  

INDEX

	
1

	
PURPOSE

	
2

	
2

	
DEFINITIONS

	
2

	
3

	
THE FACILITY- AVAILABILITY

	
22

	
4

	
HEDGING STRATEGY

	
23

	
5

	
NOTICE OF DRAWDOWN

	
25

	
6

	
INTEREST PERIODS

	
26

	
7

	
INTEREST

	
27

	
8

	
DEFAULT INTEREST

	
27

	
9

	
SUBSTITUTE BASIS

	
28

	
10

	
PREPAYMENT

	
29

	
11

	
REPAYMENT

	
32

	
12

	
APPLICATION

	
33

	
13

	
EVIDENCE OF DEBT

	
34

	
14

	
PAYMENTS

	
34

	
15

	
TAX GROSS UP AND INDEMNITIES

	
35

	
16

	
CHANGE OF CIRCUMSTANCES

	
40

	
17

	
REPRESENTATIONS AND WARRANTIES

	
41

	
18

	
SECURITIES

	
47

	
19

	
CONDITIONS PRECEDENT AND SUBSEQUENT

	
47

	
20

	
GENERAL UNDERTAKINGS

	
50

	
21

	
INSURANCE UNDERTAKINGS

	
56

	
22

	
OPERATIONAL UNDERTAKINGS

	
58

	
23

	
SECURITY MARGIN

	
63

	
24

	
EVENTS OF DEFAULT

	
63

	
25

	
SET-OFF

	
67

	
26

	
FEES

	
68

	
27

	
EARNINGS AND RETENTION ACCOUNTS

	
68

	
28

	
EXPENSES

	
70

	
29

	
INDEMNITY

	
70

	
30

	
ENVIRONMENTAL INDEMNITY

	
70

	
31

	
CONFIDENTIALITY

	
70

	
32

	
LENDER'S BUSINESS

	
72

	
33

	
STAMP DUTIES- TAXES ETC

	
72

	
34

	
DETERMINATIONS

	
72

	
35

	
NO WAIVER

	
73

	
36

	
PARTIAL INVALIDITY

	
73

	
37

	
TRANSFER AND ASSIGNMENT

	
73

	
38

	
NON-IMMUNITY

	
74

	
39

	
NOTICES

	
74

	
40

	
SUPPLEMENTAL

	
75

	
41

	
LAW AND JURISDICTION

	
76

	
42

	
THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS

	
77

	
EXECUTION PAGE

	
78

	
SCHEDULE1

	
79

	
SCHEDULE 2

	
81

THIS AGREEMENT is made the 12 January 2015.

BETWEEN

1)            HSBC BANK PLC, as lender; and

2)            ULTRA TWO SHIPPING LTD as borrower;

IT IS AGREED AS FOLLOWS:

	1	PURPOSE

	1.01	This Agreement sets out the terms and conditions on which the Lender has agreed to make available to the Borrower, as borrower, a term loan facility, up to the maximum amount of Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) in one (1) advance, for the purpose of assisting the Borrower in partly financing the Construction Cost of the Ship.

	1.02	The Borrower has the option to hedge its exposure under this Agreement to interest rate fluctuations by entering into interest rate swap transactions with the Lender at the times and in the manner hereinafter set forth.

	2	DEFINITIONS

	2.01	In this Agreement the following terms shall have the following meanings:

"Accounts" means collectively the Earnings Account and the Retention Account and, in the singular, means either of them;

"Accounts' Charges" means collectively the Earnings Account Charge and the Retention Account Charge, and in the singular means either of them;

"Accounting Information" means the combined audited by the Auditors annual and the unaudited semi annual financial statements of the Group, each as provided or (as the context may require) to be provided to the Lender in accordance with Clause 20.01 of this Agreement;

"Accounting Period" means (a) each financial year of the Guarantor and (b) each half of each financial year of the Guarantor for which Accounting Information is required to be delivered pursuant to this Agreement;

"Additional Instalment Amount" means an amount equal to the fraction having as numerator the Approved Charter Additional Facility Amount and denominator the number of the Repayment Instalments that fall due within the period of the Approved Charter.

2

"Applicable Accounting Principles" means those accounting principles, standards and practices on which preparation of the Accounting Information is based, which are US GAAP and principles and practices adopted by the Guarantor and its Subsidiaries (including without limitation the Borrower) at the date hereof or at any time thereafter and notified to and accepted by the Lender;

"Applicable Margin" means two point eighty per cent (2.80%) per annum, PROVIDED HOWEVER that, without prejudice to Clause 23, in the event that, at any time during the Security Period, the Market Value of the Ship (determined pursuant to Clause 22.26) is less than one hundred forty three per cent (143%) of the aggregate of (i) the outstanding amount of the Facility and (ii) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure, and the Borrower has not, within ten (10) Banking Days of receipt of a notice from the Lender advising the Borrower of the amount of such deficiency (which notice, in the absence of manifest error, shall be conclusive), provided to the Lender additional security (valued in accordance with normal banking practice) which shall in all respects be satisfactory to the Lender so that the Market Value of the Ship (determined in accordance with Clause 22.26) together with the value of any additional security (valued as aforesaid) provided to the Lender is at least one hundred forty three per cent (143%) of the aggregate of (i) the outstanding amount of the Facility and (ii) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure or prepaid part of the Facility in accordance with Clause 10 so that, following such prepayment, the Market Value of the Ship (determined in accordance with Clause 22.26) is at least one hundred forty three per cent (143%) of the aggregate of (i) the outstanding amount of the Facility and (ii) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure, the Applicable Margin shall be increased to three point forty five per cent (3.45%) per annum for. such Interest Periods during which the Market Value of the Ship (determined pursuant to Clause 22.26) remains less than one hundred forty three per cent (143%) of the aggregate of (i) the outstanding amount of the Facility and (ii) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure;

"Approved Brokers" means the insurance brokers appointed by the Borrower with the Lender's prior approval;

"Approved Charter" means in respect of the Ship, a time charter to be made between the Borrower and a charterer acceptable to the Lender in its reasonable discretion, for a period of not less than twenty four (24) months, at such hire rate and on such other terms and conditions as may be acceptable to the Lender in its reasonable discretion;

"Approved Charter Assignment" means the first priority deed of assignment of the rights of the Borrower under the Approved Charter, made or, as the context may require, to be made by and between the Borrower and the Lender relative to the Approved Charter of the Ship, and acknowledged by the relevant charterer(s), in form and substance reasonably satisfactory to the Lender as the same may from time to time be amended, varied or supplemented;

3

"Approved Charter Additional Facility Amount" means the amount equal to the difference between (a) the amount of the Facility Available for Drawdown if the Ship is under an Approved Charter, pursuant to Clause 3.01.01, and (b) the amount of the Facility Available for Drawdown if the Ship is not under an Approved Charter, pursuant to Clause 3.01.02, at the Drawdown Date.

"Approved Shareholders" means collectively the individuals declared to and acceptable by the Lender in its sole discretion, and in the singular means any of them;

"Auditors" means any first class firm of international accountants to be approved by the Lender;

"Availability Period" means the period commencing from the date of this Agreement and ending on the Termination Date;

"Balloon Payment" means a payment in the amount of Eleven million Four hundred Eighty Five thousand Dollars ($11,485,000) to be made by the Borrower to the Lender on the twentieth (201 ) and final Repayment Date together with the twentieth (201 ) and final Repayment Instalment;

"Banking Day" means a day on which banks and financial markets are open for business in all of Piraeus, New York and London and any other financial centre which the Lender (acting reasonably) may deem appropriate for the operation of the provisions of this Agreement;

"Borrower" means ULTRA TWO SHIPPING LTD, a corporation incorporated in the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia and Registration Number C-116832;

"Broken Funding Costs" means any amount that the Lender may certify as necessary to compensate the Lender for any loss (other than Taxes) incurred or to be incurred by the Lender as a consequence of repayment in respect of funds borrowed (or committed to be borrowed) or deposits taken (or committed to be taken) from third parties in connection with the Facility, or in liquidating or re-employing such funds or deposits for the remaining part of the then current Interest Period;

"Classification Society" means Bureau Veritas, or such other classification society member of the lACS as may be approved in writing by the Lender;

"Code" means the US Internal Revenue Code of 1986.

"CTA" means the Corporation Tax Act 2009.

4

"Commitment Letter" means the letter dated 23 October 2014, issued by the Lender addressed to the Guarantor and duly accepted by it on behalf of the Borrower and the other Security Parties on 10 November 2014;

"Compulsory Acquisition" means requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of the Ship by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title;

"Confidential Information" means all information relating to any Security Party, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender which is received by the Lender in relation to, or for the purpose of becoming the Lender under, the Finance Documents or the Facility from any Security Party or any of its advisers in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i)            is or becomes public information other than as a direct or indirect result of

any breach by the Lender of Clause 31(Confidentiality); or

(ii)            is identified in writing at the time of delivery as non-confidential by any Security Party or any of its advisers; or

(iii)            is known by the Lender before the date the information is disclosed to it by any Security Party or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with any Security Party and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;

"Confirmation" in relation to any continuing Designated Transaction, has the meaning ascribed to it in the Master Agreement;

"Construction Cost" means the amount of Twenty Eight million, Five hundred thousand Dollars (28,500,000$);

"Control" means in relation to a body corporate:

		(a)	the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

		(i)	cast, or control the casting of, more than fifty per cent (50%) of the maximum number of votes that might be cast at a general meeting of such body corporate; or

		(ii)	appoint or remove all, or the majority, of the directors or other equivalent officers of such body corporate; or

5

		(ii)	give directions with respect to the operating and financial polices of such body corporate with which the directors or other equivalent officers of such body corporate are obliged to comply; and/or

		(b)	the holding beneficially of more than fifty per cent (50%) of the issued share capital of such body corporate (excluding any part of that issued capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital),

and "Controlled" shall be construed accordingly;

"Controlling person(s)" has the meaning defined under local or foreign tax laws, regulatory guidance or intergovernmental cooperation agreements.

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

"Corporate Security Parties" means those of the Security Parties, which are companies or corporations and not natural persons and, in the singular, means any of them;

"Debt" means, in relation to any member of the Group (the "debtor"):

		(a)	Financial Indebtedness of the debtor;

		(b)	liability for any credit to the debtor from a supplier of goods or services or under any instalment purchase or payment plan or other similar arrangement;

		(c)	contingent liabilities of the debtor (including without limitation any taxes or other payments under dispute) which have been or, under the Applicable Accounting Principles consistently applied, should be recorded in the notes to the Accounting Information;

		(d)	deferred tax of the debtor; and

		(e)	liability under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person who is not a member of the Group which would fall within (a) to (d) above if the references to the debtor referred to the other person;

"Default Rate" means the interest rate referred to in Clause 8.01;

6

"Delivery Date" means the date on which the Ship is delivered to the Borrower pursuant to the Purchase Documents;

"Designated Transaction" means a Transaction which, without prejudice to the provisions of Clause 4.03, fulfils the following requirements:

		a)	it is entered into by the Borrower pursuant to the Master Agreement with the Lender;

		b)	its purpose is the hedging of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Facility; and

		c)	it is designated by the Borrower, by delivery by the Borrower to the Lender of a notice of designation as a Designated Transaction for the purposes of the Finance Documents;

"Dollars" or "$" means the lawful currency for the time being of the United States of America;

"Drawdown" means the making of the Facility by the Lender to the Borrower;

"Drawdown Date" means the date requested by the Borrower for the Facility to be made available or (as the context requires) the date on which the Facility is actually made available;

"Early Termination Date" in relation to any continuing Designated Transaction, shall have the meaning ascribed to it in the Master Agreement;

"Earnings" means in relation to the Ship all freight, hire, passage monies and any other amounts whatsoever which may at any time be earned by or become payable to or for the account of the Borrower or its agents arising out of or as a result of the ownership, possession, management and/or operation of the Ship by the Borrower or its agents or under any charter (including, but without limitation the Approved Charter), contract of carriage or other contract (including a salvage or towage contract) for the use, operation or management of the Ship, all payments for any variation of any such contract and all damages for any breach of any such contract, all general average and salvage remuneration and all compensation for requisition for hire; !

"Earnings Account" means the interest-bearing deposit account opened or to be opened in the name of the Borrower to be maintained throughout the Security Period with the Lender in Piraeus, Greece or any other branch of the Lender in Greece or elsewhere as the Lender may reasonably designate, into which all the Earnings of the Ship are to be paid in accordance with clause 22.02, such account to include any substitute account or revised account or revised designation or number whatsoever and any deposit account to which monies from the Earnings Account may from time to time be paid on a time deposit basis;

7

"Earnings Account Charge" means the first priority assignment, pledge and charge to be granted by the Borrower to the Lender on the Earnings Account in form and substance satisfactory to the Lender, as the same may from time to time hereafter be amended or supplemented;

"Encumbrance" means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust agreement or security interest or other encumbrance of any kind securing any obligation of any person or having the effect of conferring security or any type of preferential agreement (including without limitation, title transfer and/or retention arrangements having a similar effect);

"Environmental Approvals" means any permit, licence, approval, ruling, certification, exemption or other authorisation relating to the Ship required under any applicable Environmental Laws;

"Environmental Claim" means:

		(a)	
any claim by or directive from any applicable governmental, judicial or regulatory authority alleging breach of, or non-compliance with any Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of an Environmental Incident; or

 

		(b)	any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident;

and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

"Environmental Incident" means:

		(a)	any release, discharge, disposal or emission of Environmentally Sensitive Material by or from a Relevant Ship; or

		(b)	any incident in which Environmentally Sensitive Material is released from a vessel other than a Relevant Ship and which involves a collision between a Relevant Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Relevant Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Relevant Ship and/or any owner and/or any other operator or manager thereof is at fault or otherwise liable to any legal or administrative action; or

		(c)	any other incident in which Environmentally Sensitive Material is released otherwise than from a Relevant Ship and in connection with which any Relevant Ship is actually or potentially liable to be arrested and/or where any

8

owner and/or any operator or manager of any Relevant Ship is at fault or otherwise liable to any legal or administrative action;

"Environmental Laws" means all national and international laws, ordinances, rules, regulations, rules of common law, conventions and agreements whatsoever pertaining to pollution or protection of human health or the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material (including without limitation, the United States Oil Pollution Act of 1990 and any comparable laws of the individual States of the United States of America);

"Environmentally Sensitive Material" means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance), which is (or is capable of being or becoming) polluting, toxic or hazardous;

"Event of Default" means any event referred to in Clause 24;

"Excess Risks" means in relation to the Ship the proportion of claims for general average and salvage charges and under the ordinary running-down clause, which is not recoverable in consequence of the value at which the Ship is assessed for the purpose of such claims exceeding her insured value;

"Facility" means the term loan facility in an amount of up to Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) to be made available to the Borrower by the Lender in one (1) advance pursuant to the terms of Clause 3 or, if the context may so require, so much thereof as shall for the time being be outstanding to the Lender hereunder;

"Facility Available for Drawdown if the Ship is under an Approved Charter" has the meaning attributed to it in Clause 3.01.01;

"Facility Available for Drawdown if the Ship is not under an Approved Charter" has the meaning attributed to it in Clause 3.01.02;

"FATCA" means:

(a)            sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

(b)            any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of (a); or

(c)            any agreement pursuant to the implementation of (a) or (b) with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;

"FATCA Application Date" means:

9

(a)            in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b)            in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c)            in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2017, 

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if the Lender is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

"Finance Documents" means:

(a)            this Agreement; and

(b)            the Master Agreement; and

(b)            the Security Documents; and

(c)            any other document (whether creating an Encumbrance or not) which is executed at any time by any Security Party or any other person as security for, or to establish any form of subordination or priorities' arrangement in relation to any amount payable to the Lender under this Agreement or any of the documents referred to in this definition;

"Financial Indebtedness" means any indebtedness for or in respect of:

(a)            moneys borrowed and debit balances at banks or other financial institutions;

(b)            any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);

(c)            any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)            the amount of any liability in respect of any finance or capital lease;

(e)            receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)            any Treasury Transaction (and, when calculating the value of that Treasury

Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account);

10

(g)            any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a Security Party which liability would fall within one of the other sections of this definition or (ii) any liabilities of any Security Party relating to any post-retirement benefit scheme;

(h)           any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under standard accounting principles;

(i)            any amount of any liability under an purchase agreement if (i) one of the primary reasons advance or deferred behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 30 days after the date of supply;

(j)            any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under standard accounting principles; and

(k)           the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (j).

"Fleet Book Value" means at the end of a relevant period the aggregate book value of the Fleet Vessels less depreciation as stated in the most recent Accounting Information of the Group delivered pursuant to Clause 20.01;

"Fleet Market Value" means at the date of calculation the aggregate of the Market Values of the Fleet Vessels;

"Fleet Vessels" means all of the vessels (including but not limited to the Ship) from time to time wholly owned by members of the Group (including, without limitation, the Borrower) and, in the singular means any of them;

"General Assignment" means the first priority deed of assignment made or, as the context may require, to be made by and between the Borrower and the Lender relative to the Insurances, the Earnings and the Requisition Compensation of the Ship in form and substance satisfactory to the Lender as the same may from time to time be amended, varied or supplemented;

"Government Entity" means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission, department, division, organ, instrumentality, court or agency or tribunal and any association, organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing is a participant;

"Group" means the Guarantor and its Subsidiaries (whether direct or indirect and including without limitation the Borrower and each other Corporate Security Party)

11

from time to time during the Security Period and "members of the Group" shall be construed accordingly;

"Guarantee" means the guarantee in respect of the Borrower' obligations under this Agreement and the other Finance Documents, to be executed by the Guarantor in favour of the Lender, in form and substance satisfactory to the Lender, as the same may from time to time be amended, varied or supplemented;

"Guarantor" means EUROSEAS LTD., a corporation organised and existing under the Laws of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands and each other company or person, who may from time to time guarantee the obligations of the Borrower hereunder and, in the plural, means all of them;

"Holding" means, in relation to the Guarantor, the beneficial holding by the Approved Shareholder of the issued share capital of the Guarantor [excluding any part of that issued capital that carries (i) no right to participate beyond a specified amount in a distribution of either profits or capital and/or (ii) no power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of votes at a general meeting of the Guarantor];

"Indebtedness" means the aggregate of the Facility and interest thereon and any and all moneys, liabilities and obligations (whether actual or contingent, whether existing or hereafter arising, whether or not for the payment of money, and including, without limitation, the Master Agreement Liabilities, Broken Funding Costs (if any), and any obligation or liability to pay damages) which are now or which may at any time and from time to time hereafter be due, owing, payable or incurred or expressed to be due, owing, payable or incurred from any Security Party (whether as principal, surety or otherwise) to the Lender under this Agreement and the other Finance Documents and/or in connection herewith and/or therewith (as conclusively - in the absence of manifest error- certified by the Lender);

"Insurance Documents" means all slips, cover notes, contracts, policies, certificates of entry or other insurance documents evidencing or constituting the Insurances from time to time in effect;

"Insurances" means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or mutual hull or war risks association) or such other arrangements by way of insurance which are from time to time taken out or entered into in respect of or in connection with the Ship pursuant to this Agreement and including all benefits thereof including all claims of whatsoever nature and return of premiums;

"Insurers" means the underwriters, insurance companies, mutual insurance associations with or by which the Insurances are effected;

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"Interest Determination Date" means the Banking Day, which is two (2) Banking Days prior to the commencement of an Interest Period;

"Interest Payment Date" means each day on which interest is payable in accordance with Clause 7, provided that if any such day is not a Banking Day, the relevant Interest Payment Date shall be the next succeeding day which is a Banking Day, unless such next succeeding Banking Day falls into another calendar month, in which event, the relevant Interest Payment Date shall be the immediately preceding Banking Day;

"Interest Period" means each of the successive periods determined in accordance with Clause 6 of this Agreement during which the Facility or any part thereof is outstanding and for which an Interest Rate in respect thereof is to be established hereunder;

"Interest Rate" means (save as provided in Clause 9) the rate(s) of interest applicable to the Facility (or any part thereof) during each Interest Period in respect thereof which is/are conclusively (in the absence of manifest error) certified by the Lender to the Borrower to be the aggregate of (a) the Applicable Margin and (b) LIBOR and (c) the Mandatory Cost (if any);

"ISM Code" means, in relation to its application to the Manager, the Borrower, the Ship and her operation:

		(a)	'The International Management Code for the Safe Operation of Ships and for Pollution Prevention', currently known or referred to as the 'ISM Code', adopted by the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974(SOLAS 1974); and

		(b)	all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the 'Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations produced by the International Maritime Organisation pursuant to Resolution A. 788(19) adopted on 25 November 1995,

as the same may be amended supplemented or replaced from time to time;

"ISM Code Documentation" includes, in relation to the Ship:

		(a)	the document of compliance (DOC) and safety management certificate (SMC) issued pursuant to the ISM Code within the periods specified by the ISM Code; and

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		(b)	all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Lender may require; and

		(c)	any other documents which are prepared or which are otherwise relevant to establish and maintain compliance of the Ship or the compliance of the Borrower and the Manager with the ISM Code which the Lender may require;

"ISM SMS" means, in relation to the Ship, the safety management system for the Ship which is required to be developed, implemented and maintained by the Borrower under the ISM Code;

"ISPS Code" means the International Ship and Port Facility Security Code adopted by the International Maritime Organization Assembly as the same may have been or may be amended or supplemented from time to time;

"ISPS Code Documentation" includes in relation to the Ship:

		(a)	the International Ship Security Certificate issued pursuant to the ISPS Code within the periods specified by the ISPS Code; and

		(b)	all other documents and data which are relevant to the ISPS Code and its implementation and verification which the Lender may require;

"ITA" means the Income Tax Act 2007;

"Lender" means HSBC BANK PLC, a banking company duly incorporated under the laws of England whose registered office is at 8 Canada Square, London E14 5HQ, United Kingdom, and shall include its successors and assigns;

"Leverage Ratio" means, in respect of an Accounting Period, the ratio of the Consolidated Debt (as stated in the then most recent Accounting Information) to the Market Value Adjusted Total Assets of the Group, relevant to such Accounting Period;

"LIBOR" means, for an Interest Period:

		(a)	the applicable Screen Rate; or

		(b)	(if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Lender in the London interbank market, at 11.00 a.m. on the Interest Determination Date for that Interest Period for the offering of deposits in Dollars in an amount comparable to the Facility (or any relevant part of the Facility) and for a period comparable to the relevant Interest Period and, if any such rate is below zero, LIBOR will be deemed to be zero.

"Loan Account" means collectively the account or accounts maintained by the Lender referred to in Clause 13;

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"Major Casualty" means any casualty to the Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds Seven hundred thousand Dollars ($700,000) or the equivalent in any other currency;

"Management Agreement" means in relation to the Ship, the management agreement in respect of the Ship made or to be made by and between (i) the Borrower and (ii) the Manager on terms acceptable to the Lender, as the same may from time to time be amended, varied or supplemented;

"Manager" means EUROBULK LTD., a company organised and existing under the laws of Liberia, with its registered office at 80 Broad Street, Monrovia, Liberia, having established an office in Greece under Law 89/67 (as in force) at 4 Messogiou & Evropis Street, Marousi 15124, Athens, Greece or any other company that may approved by the Lender as the manager of the Ship, in the Lender's sole discretion;

"Manager's Undertakings" means, in relation to the Ship, a letter of undertaking including, where appropriate, an assignment of any obligatory insurances, executed or, as the context may require, to be executed by the Manager in favour of the Lender, on such terms as the Lender may approve or require;

"Mandatory Cost" means the cost imputed to the Lender of compliance with the mandatory liquid asset requirements and/or the banking supervision or any other costs whatsoever imposed by national or international regulations.

"Market Value" means in respect of each of the Fleet Vessels (including without limitation the Ship), the value thereof at each relevant time determined in accordance with the provisions of Clause 22.26;

"Market Value Adjusted Net Worth" means at any relevant time the amount obtained by deducting from the Market Value Adjusted Total Assets the amount of the Total Liabilities;

"Market Value Adjusted Total Assets" means at any relevant time the Total Assets as adjusted by replacing the Fleet Book Value with the Fleet Market Value;

"Material Adverse Effect" means in the reasonable opinion of the Lender a material adverse effect on:

(a)            the business, operations, property, condition (financial or otherwise) or prospects of any Security Party; or

(b)            the ability of any Security Party to perform its payment obligations under any Finance Document; or

(c)            the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.

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"Master Agreement" means the master agreement (on the 2002 ISDA (Multicurrency — Crossborder) form) and the Schedule thereto, both made or to be made between the Borrower and the Lender and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged thereunder, as the same may from time to time be amended, varied or supplemented;

"Master Agreement Assignment" means in relation to the Master Agreement, the assignment of that Master Agreement in favour of the Lender, executed or, as the context requires, to be executed by the Borrower in form and substance satisfactory to the Lender as security for the Indebtedness, as the same may from time to time be amended, varied or supplemented;

"Master Agreement Liabilities" means at any relevant time all liabilities actual or contingent, present or future of the Borrower to the Lender under the Master Agreement;

"Maximum Permitted Swap Exposure" means an amount not exceeding One million Dollars ($1,000,000);

"Mortgage" means, in relation to the Ship, the first preferred Mortgage or the first priority statutory mortgage and a deed of covenants collateral thereto (as the case may be) on the Ship, granted or, as the context may require, to be granted by the Borrower in favour of the Lender to secure the due payment of the Indebtedness in form and substance satisfactory to the Lender, as the same may from time to time be amended, varied or supplemented;

"NASDAQ" means the National Association of Securities Dealers Automated Quotation;

"Nomination Date" means the Banking Day which is two (2) Banking Days prior to the commencement of an Interest Period;

"Notice of Drawdown" means the written notice given by the Borrower to the Lender pursuant to Clause 5.01.04 substantially in the form set out in Schedule 1 hereto (or in any other form which the Lender may require);

"Original Jurisdiction" means, in relation to a Security Party, the jurisdiction under whose laws that Security Party is incorporated as at the date of this Agreement;

"Party" means a party to this Agreement;

"Permitted Liens" means any supplier's, carrier's, seamen's, workman's or similar lien arising in the ordinary course of business automatically by statute or by operation of law and not by way of contract in respect of amounts not yet due and payable but

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excluding any lien arising from any default or omission of the Security Parties or any of them;

"Potential Event of Default" means any event, which with the giving of notice or passage of time or the combination of both or the fulfilment of any other condition may become an Event of Default;

"Proceeds" means the proceeds paid under the terms of this Agreement and the other Finance Documents, or any of them (including but not limited to the proceeds of any sale of the Ship, the Earnings and the Insurances), the proceeds from the enforcement of any of the Finance Documents, and following an Event of Default which is continuing any moneys to the credit of the Earnings Account and the Retention Account or either of them;

"Prohibited Person" means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed;

"Protection and Indemnity Risks" means the usual risks covered by a protection and indemnity association that is a member of the International Group of Protection and Indemnity Associations, including the proportion not otherwise recoverable in case of collision under the ordinary running-down clause;

"Purchase Documents" means collectively the shipbuilding contract dated 30 November 2013, entered by and among Yangzhou Dayang Shipbuilding Co., Ltd and Sumec Marine Co., Ltd. both of the People's Republic of China as joint and several sellers and the Borrower as buyer and all other contracts, bills of sale and other documents whatsoever made or to be made, whereby the Borrower contracted to buy and pursuant to which the Borrower will acquire title of the Ship, as they may be amended, supplemented or varied from time to time with the prior consent of the Lender, such consent not to be unreasonably withheld;

"Related Fund" means, in relation to a fund (the "first fund"), a fund which is managed or advised by the same investment manager or investment adviser as the first fund, or, .if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate (as such term is defined in Clause 31) of the investment manager or investment adviser of the first fund.

"Relevant Jurisdiction" means, in relation to a Security Party:

		(a)	its Original Jurisdiction;

		(b)	any jurisdiction where any asset subject to or intended to be subject to a Finance Document to be executed by it is situated;

		(c)	any jurisdiction where it conducts its business; and

		(d)	the jurisdiction whose laws govern the perfection of any of the Finance Documents entered by it;

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"Relevant Ship" means all Fleet Vessels, (including without limitation the Ship), and any other ship from time to time owned, managed or crewed by, or demise or bareboat chartered to the Borrower, the Manager or any other member of the Group;

"Repayment Dates" means, collectively (i) the date falling three (3) months from the Drawdown Date and (ii) each of the eighteen (18) dates falling at consecutive three monthly intervals thereafter and (iii) the twentieth (20th) date falling two (2) months after the immediately preceeding (nineteenth) Repayment Date; provided that if any such day is not a Banking Day the relevant Repayment Date shall be the next succeeding day which is a Banking Day unless such next succeeding Banking Day falls in another calendar month in which event the relevant Repayment Date shall be the immediately preceding Banking Day;

"Repayment Instalments" means, in respect of the Facility, collectively the Repayment Instalments referred to in Clause 11.01 and in the singular means any one of them;

"Requisition Compensation" means all compensation payable by reason of any Compulsory Acquisition of the Ship;

"Retention Account" means an account to be opened in the name of the Borrower pursuant to Clause 27 where monies shall be deposited in accordance with Clause 27, such account to include any substitute account or revised account or revised designation or number whatsoever and any deposit account to which monies from such account may from time to time be paid on a time deposit basis;

"Retention Account Charge" means the assignment, pledge and charge to be granted by the Borrower to the Lender on the Retention Account in form and substance satisfactory to the Lender, as the same may from time to time be amended, varied or supplemented;

"Sanctions" means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the forgoing):

		(a)	imposed by any law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America, whether or not any Security Party or any other member of the Group is legally bound to comply with the forgoing; or

		(b)	otherwise imposed by any law or regulation by which any Security Party, or any other member of the Group, is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Security Party or any other member of the Group;

"Screen Rate" means in relation to LlBOR, the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period

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displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or the service ceases to be available, the Lender may specify another page or service displaying the appropriate rate after consultation with the Borrower.

"Security Documents" means collectively the Mortgage, the General Assignment, the Approved Charter Assignment, the Account Charges, the Manager's Undertaking, the Master Agreement Assignment, the Guarantee and any other agreement or document that may be executed at any time by any Security Party or any other person as security for all or any part of the Indebtedness, as each of them may from time to time be amended, varied or supplemented and in the singular means any of them;

"Security Parties" means each party to the Finance Documents (other than the Lender) and in the singular means any of them;

"Security Period" means the period during which the Finance Documents or any of them remain in effect and ending when the Indebtedness is paid in full to the satisfaction of the Lender;

"Security Requirement" means the amount in Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrower and the Lender) which is at least equal to:

		(i)	if the Master Agreement is utilized and for as long as it is utilized, One hundred Twenty Five per cent (125%) of the aggregate amount of the Facility and the Maximum Permitted Swap Exposure at any relevant time; or

		(ii)	if the Master Agreement is not utilized, One hundred Thirty per cent (130%) of the Facility at any relevant time;

PROVIDED HOWEVER that for as long as the Holding by the Approved Shareholders in the Guarantor falls below twenty per cent (20%) but remains above ten per cent (10%), the Security Requirement will, at all times, (unless the Lender provides its prior written consent permitting otherwise) be an amount in Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrower and the Lender) equal to One hundred Sixty Six point Five per cent (166.5%) of the aggregate amount of (i) the Facility and (ii) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure;

"Security Value" means the amount in Dollars (as certified by the Lender whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrower and the Lender) which is, at any relevant time, the aggregate of (a) the Market Value of the Ship as most recently determined in accordance with Clause 22.26 and (b) the market value of any additional security for the time being provided to the Lender;

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"Ship" means the bulk carrier of 63,500 DWT with Hull Nr DY161, currently constructed pursuant to the shipbuilding contract dated 30 November 2013, entered by and among Yangzhou Dayang Shipbuilding Co., Ltd and Sumec Marine Co., Ltd. both of the People's Republic of China as joint and several sellers and the Borrower as buyer, which, upon her deliver to the Borrower will be registered in the ownership of the Borrower at the Port of Monrovia, Liberia, under the Liberian flag, or under such other flag as may be acceptable to the Lender in its reasonable discretion;

"Subject Documents" means all of the Finance Documents, the Approved Charter, the Purchase Documents and the Management Agreement (none to be amended, varied, supplemented or modified without the prior consent of the Lender, such consent not to be unreasonably withheld in relation to the Approved Charter) and together with (a) any other instrument, document or memorandum, scheduled to any of the documents referred to above, and (b) any notice, consent or acknowledgement referred to in or required pursuant to any of the documents referred to above and (c) any document, instrument or memorandum which secures any of the obligations of the Borrower under any of the Finance Documents or under any other Subject Document;

"Substantial Owners" has the meaning defined under local or foreign tax laws, regulatory guidance or intergovernmental cooperation agreements.

"Subsidiary" of a person means: (a) any other person directly or indirectly Controlled by that person; or (b) any other person whose dividends or distributions on ordinary voting share capital that person is entitled to receive is more than fifty per cent (50%); or (c) any entity (whether or not so Controlled) treated as a Subsidiary in the financial statements of that person from time to time;

"Swap Exposure" means, at any relevant date, the amount certified by the Lender (whose certificate shall in the absence of manifest error be conclusive and binding on the Borrower and the Lender) to be the aggregate net amount in Dollars which would be payable by the Borrower to the Lender, under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Designated Transactions entered into between the Borrower and the Lender;

"Tax Authority" means any local or foreign regulatory or tax authority.

"Taxes" means all present and future taxes, levies, imposts, duties, charges, fees, deductions and withholdings, and any restrictions or conditions resulting in a charge (other than taxes on the overall net income of the Lender) and "Tax" and "Taxation" shall be construed accordingly;

"Termination Date" means the 30th April 2016 or such later date as the Lender may approve in writing;

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"Total Assets" means at any relevant time the total assets (including cash and cash equivalents) of the Group as stated in the most recent combined Accounting Information of the Group;

"Total Liabilities" means at any relevant time the total liabilities of the Group as stated in the most recent combined Accounting Information of the Group;

"Total Loss" means in relation to the Ship:

		(a)	the actual or constructive or compromised or arranged or agreed total loss of the Ship; or

		(b)	the Compulsory Acquisition of the Ship; or

		(c)	the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity unless such Ship be released and restored to the Borrower from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof or such lesser period provided in the War Risks Insurances;

"Transaction" has the meaning ascribed to it in the Master Agreement.

"Treasury Transactions" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price;

"US GAAP" means generally accepted accounting principles adopted in the United States;

"US Tax Obligor" means (i) a Security Party which is resident for tax purposes in the United States of America; or (ii) a Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes;

"VAT" means (i) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (ii) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in (a), or imposed elsewhere.

"War Risks" includes all risks referred to in the Institute Time Clauses (Hulls) (1/10/83) and (1/11/95) including, but not limited to, the risk of mines, blocking and trapping, missing vessel, confiscation and all risks excluded by Clause 22 of the Institute Time Clauses (Hulls) (1/10/83) or Clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or Clause 24 of the Institute Time Clauses (Hulls) (1/11/1995)

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	2.02	In this Agreement clause headings are for ease of reference only and shall be disregarded in the construction of this Agreement.

	2.03	In this Agreement unless the context otherwise requires:

	2.03.01	words importing the singular number shall include the plural and vice versa;

	2.03.02	any reference to a document or instrument is a reference to that document or instrument as the same may have been, or may from time to time be amended or supplemented;

	2.03.03	the liquidation, winding-up or dissolution of a company or body corporate or the appointment of a receiver, administrative receiver, manager or administrator of or in relation to a company or corporation or any of its assets shall be construed so as to include any equivalent or analogous proceedings under the laws of the jurisdiction in which it is incorporated or any jurisdiction in which it carries on business or has assets or liabilities;

	2.03.04	references to persons include any individual, partnership, firm, trust, body corporate, government, governmental body, authority, agency, unincorporated body of persons or association;

	2.03.05	a reference to any enactment or 'statutory provision include any enactment or statutory provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same and shall include any orders, regulations, codes of practice, instruments or other subordinated legislation made under the relevant enactment or statutory provision; and

	2.03.06	"month" means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (a) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (b) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and "months" and "monthly" shall be construed accordingly; and

	2.03.07	the words "herein", "hereto" and "hereunder" refer to this Agreement as a whole and not to the particular Clause or Schedule in which the words may be used.

	3	THE FACILITY — AVAILABILITY

	3.01	The Lender hereby agrees to make available to the Borrower, subject to the terms and the conditions hereof, the Facility in an amount equal to the lesser of:

	3.01.01	In case the Ship is, on the Drawdown Date, under an Approved Charter:

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	3.01.01.1	Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) and

	3.01.01.2	seventy per cent (70%) of the Construction Cost and

	3.01.01.3	seventy per cent (70%) of the Market Value of the Ship on the Drawdown Date (determined pursuant to Clause 22.26)

(called the "Facility Available for Drawdown if the Ship is under an Approved Charter")

or

	3.01.02	In case the Ship is not, on the Drawdown Date, under an Approved Charter:

	3.01.02.1	Eighteen million Five hundred Twenty Five thousand Dollars ($18,525,000) and

	3.01.02.2	sixty five per cent (65%) of the Construction Cost and

	3.01.02.3	sixty five per cent (65%) of the Market Value of the Ship on the Drawdown Date (determined pursuant to Clause 22.26)

(called the "Facility Available for Drawdown if the Ship is not under an Approved Charter")

in one (1) advance, for the purpose of assisting the Borrower in partly financing the Construction Cost of the Ship.

	3.02	The Borrower undertakes to apply the proceeds of the Facility for the purpose stated herein; the Lender shall be entitled (but not obliged) to monitor the application of such proceeds.

	3.03	Subject as herein provided, the Facility is available to be drawn by the Borrower only during the Availability Period. The Facility or any part thereof which remains undrawn at the close of business in Athens on the expiration of the Availability Period shall be automatically cancelled.

	4	HEDGING STRATEGY

	4.01	The Borrower acknowledges the significance of addressing the interest rate risk inherent in this Agreement in cooperation with the Lender. Along these lines:

	4.01.01	the Borrower undertakes to establish, together with the Lender, mechanisms to monitor the interest rate exposure and evaluate available hedge strategies;

	4.01.02	the Borrower invites the Lender to provide on a regular basis hedging ideas and products; and

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	4.01.03	the Borrower undertakes that it may enter into a Designated Transaction so as to limit its exposure under this Agreement to interest rate fluctuations on terms and conditions mutually agreed between the Borrower and the Lender.

	4.02	Any Designated Transaction shall be entered into on the basis of the Master Agreement and pursuant to the strategy set out herein and shall be concluded with the Lender.

	4.03	No Designated Transaction may be entered into by the Borrower:

	4.03.01	if there is a Material Adverse Effect in relation to any one or more of the Security Parties or any other member of the Group and/or if any other Event of Default or a Potential Event of Default occurs;

	4.03.02	for a period longer than five (5) years, commencing from the Drawdown Date;

	4.03.03	for an amount which, when aggregated with the amount of any other Designated Transaction entered by the Borrower will not, at any relevant time, exceed the amount of the Facility, as reducing from time to time thereafter pursuant to Clause 11.01 so that the notional principal amount of the continuing Designated Transactions does not (taking into account the scheduled amortisation) exceed at any relevant time the amount of the Facility as reducing from time to .time thereafter pursuant to Clause 11.01;

	4.03.04	if the Lender determines that at the relevant time the Swap Exposure exceeds, or might exceed as a result thereof, the Maximum Permitted Swap Exposure;

	4.04	Notwithstanding any provision of this Agreement and/or the Master Agreement to the contrary, if for any reason a Designated Transaction has been entered into but the Facility is not drawn under this Agreement then, subject to clause 4.05, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by such Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine.

	4.05	If a Designated Transaction has been entered into but the Facility is not drawn down under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirement in writing, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, whichadditional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require.

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	4.06	The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 4.04 and 4.05.

	4.07	Without prejudice to or limitation of the obligations of the Borrower under Clause 4.06, in the event that the Lender exercises any of its rights under Clauses 4.04 or 4.05 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement.

	4.08	In the event that the Lender fails to enter into a Designated Transaction with the Borrower, the Lender shall not be liable to the Borrower to enter into such Designated Transaction nor to compensate the Borrower for such failure.

	4.09	The Borrower hereby undertakes to ensure that, throughout the Security Period any and all payments by the Lender to the Borrower under each Designated Transaction are paid to the Earnings Account.

	5	NOTICE OF DRAWDOWN

	5.01	Subject to:

	5.01.01	the receipt by the Lender of the documents and satisfaction of the other conditions specified in Clauses 19.01 and 19.03 in form and substance satisfactory to the Lender and its legal advisers on or before the Drawdown Date; and

	5.01.02	no Event of Default or a Potential Event of Default having occurred; and

	5.01.03	the representations and warranties set out in Clause 17 (updated mutatis mutandis to the Drawdown Date) being true and/or correct; and

	5.01.04	the receipt by the Lender of the Notice of Drawdown in the form set out in Schedule 1 hereto not later than 11.00 a.m. (London time) two (2) Banking Days prior to the Drawdown Date setting out, inter alia, the date of the proposed Drawdown,

the Facility will be made available to the Borrower in accordance with and on the terms and conditions. of this Agreement.

	5.02	The Notice of Drawdown shall be irrevocable and the Borrower shall be bound to borrow in accordance with such notice.

	5.03	On the payment of the Facility the Borrower shall sign an Acknowledgement in the form set out in Schedule 2 hereto.

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	5.04	If the Borrower gives the Notice of Drawdown pursuant to Clause 5.01.04 and the Lender makes arrangements on the basis of such notice to acquire Dollars in the London Interbank Market to fund the Facility or any part thereof and the Borrower is not permitted or otherwise fails to borrow in accordance with such Notice of Drawdown (either on account of any condition precedent not being fulfilled or otherwise) the Borrower shall indemnify the Lender against any damages, losses or expenses which the Lender may incur (either directly or indirectly) as a consequence of the failure by the Borrower to borrow in accordance with such Notice of Drawdown.

	6	INTEREST PERIODS

	6.01	Subject as provided in Clause 6.02, the Interest Periods applicable to the Facility shall (subject to market availability) be periods of a duration of three (3) or six (6) or twelve (12) months (or such other periods as the Lender and the Borrower may agree) as selected by the Borrower by written notice to be received by the Lender not later than 11.00 a.m. (London time) on the relevant Nomination Date;

	6.02	Notwithstanding the provisions of Clause 6.01:

	6.02.01	the initial Interest Period in respect of the Facility shall commence on the Drawdown Date and shall end on the expiry date thereof and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period in respect thereof;

	6.02.02	if any Interest Period would otherwise end on a day which is not a Banking Day, that Interest Period shall be extended to the next succeeding day which is a Banking Day unless such next succeeding Banking Day falls in another calendar month in which event that Interest Period shall end upon the immediately preceding Banking Day;

	6.02.03	if any Interest Period commences on the last Banking Day in a calendar month or if there is no numerically corresponding day in the month in which that Interest Period ends, that Interest Period shall end on the last Banking Day in that later month;

	6.02.04	where any Repayment Date occurs other than at the end of an Interest Period there shall in respect of that part of the Facility equivalent to the amount of the Repayment Instalment falling due on such Repayment Date be a separate Interest Period expiring on such Repayment Date and the Interest Rate relating to such part shall be fixed separately;

	6.02.05	no Interest Period shall extend beyond the final Repayment Date;

	6.02.06	if the Borrower fails to select an Interest Period in accordance with the above, such Interest Period shall be of three (3) months duration or of such other duration as the Lender in its sole discretion may select; and

	6.02.07	save as provided in Clause 6.02.04, the Borrower shall not select more than one Interest Periods at any one time.

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	7	INTEREST

	7.01	Subject to the terms of this Agreement the Borrower shall pay to the Lender interest in respect of the Facility (or the relevant part thereof) accruing at the Interest Rate for each Interest Period relating thereto in arrears on the last day of each Interest Period; provided that if any Interest Period is of a duration longer than three (3) months, accrued interest in respect of the Facility (or the relevant part thereof) shall be paid every three (3) months during such Interest Period and on the last day of such Interest Period.

	7.02	Interest shall be calculated on the basis of the actual number of days elapsed and a three hundred and sixty (360) day year.

	7.03	The Lender will calculate and determine the Interest Rate applicable for the Facility, each determination being promptly notified by the Lender to the Borrower at the beginning of each Interest Period in respect thereof. The Lender's certificate as to the Interest Rate applicable shall be final and (except in the case of manifest error) binding on the Borrower and the other Security Parties.

	8	DEFAULT INTEREST

	8.01	In the event of a failure by the Borrower to pay any amount on the date on which such amount is due and payable pursuant to this Agreement and/or any one or more of the other Finance Documents (unless otherwise specifically provided in any Finance Document) and irrespective of any notice by the Lender or any other person to the Borrower in respect of such failure, the Borrower shall pay interest on such amount on demand from the date of such default up to the date of actual payment (as well after as before judgment) at the rate per annum which is the aggregate of (a) Two per cent (2%) and (b) the Applicable Margin and (c) the rate at which the Lender in accordance with its normal practice is offered deposits in Dollars in the London Interbank Market for such period as the Lender may select at or about 11.00 a.m. (London time) on the Banking Day immediately following that on which the Lender becomes aware of such failure and (d) any Mandatory Cost and, so long as such failure continues, such rate shall be recalculated on the same basis thereafter.

	8.02	Any interest which shall have accrued under Clause 8.01 in respect of an unpaid amount shall be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount and shall be due and payable at the end of the period by reference to which it is calculated or such other date or dates as the Lender may specify by written notice to the Borrower.

	8.03	Clauses 7.02 and 7.03 shall apply to the calculation and determination of interest on amounts in default.

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	9	SUBSTITUTE BASIS

	9.01	If the Lender determines (which determination - in the absence of manifest error - shall be conclusive) that:

	9.01.01	at 11.00 a.m. (London time) on any Interest Determination Date the Lender was not being offered by banks in the London Interbank Market deposits in Dollars in the required amount and for the required period; or

	9.01.02	LIBOR would not adequately reflect the cost to the Lender of making, funding or maintaining the Facility or any part thereof for the duration of the next succeeding Interest Period; or

	9.01.03	by reason of circumstances affecting the London Interbank Market such deposits are not available to the Lender in such market; or

	9.01.04	adequate and reasonable means do not or will not exist for the Lender to ascertain the Interest Rate applicable to the next succeeding Interest Period; or

	9.01.05	Dollars will or may not continue to be freely transferable;

then, and in any such case the Lender shall give a written notice of any such event to the Borrower and in case any of the above occurs on the Interest Determination Date prior to the Drawdown Date the Borrower's right to borrow the Facility or any part thereof shall be suspended during the continuation of such circumstances.

	9.02	If, however, any of the events described in Clause 9.01 occurs on any other Interest Determination Date relative to the Facility or any part thereof, then the duration of the relevant Interest Period(s) shall be up to one (1) month and during such Interest Period the Interest Rate applicable to the Facility or the relevant part thereof shall be the rate per annum determined by the Lender rounded upwards to the nearest whole multiple of one sixteenth per cent (1/16th%) to be the aggregate of the Applicable Margin, and any Mandatory Cost and the cost (expressed as a percentage rate per annum) to the Lender of funding the amount of the Facility during such Interest Period(s).

	9.03	During such Interest Period(s) the Borrower and the Lender shall negotiate in good faith in order to agree an Interest Rate or Interest Rates and Interest Period or Interest Periods satisfactory to the Borrower and the Lender to be substituted for those which but for the occurrence of any such event as specified in this Clause would have applied. If the Borrower and the Lender are unable to agree on such an Interest Rate(s) and Interest Period(s) by the day which is two (2) Banking Days before the end of the Interest Period referred to above, the Borrower shall repay the Facility together with accrued interest thereon at the Interest Rate set out above, together with all other amounts due under this Agreement relative to the Facility, on the last day of such Interest Period.

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	10	PREPAYMENT

	10.01	Unless an Event of Default has occurred (whereupon the provisions of Clause 12.01 shall apply), the Borrower shall be obliged to prepay the Indebtedness in full, if the Ship is sold (with the Lender's prior written consent) or becomes a Total Loss or is refinanced or in the case that the Mortgage on the Ship is discharged pursuant to sub­ Clause 10.02.03.

	10.02	Any prepayment referred to in Clause 10.01 shall be effected on the following dates (as appropriate):

	10.02.01	in the case of a sale, of the Ship, on or before the date on which such sale is completed by delivery of the Ship to her buyer; or

	10.02.02	in the case of a Total Loss, on the earlier of (i) the date falling one hundred eighty (180) days after the date of occurrence of such Total Loss and (ii) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss; or

	10.02.03	in the case the Mortgage on the Ship is discharged (other than in the circumstances referred to in paragraph 10.02.01 above and where the Borrower and the other Security Parties have discharged all their obligations, whether actual or contingent, under this Agreement and the other Finance Documents), on or before the date on which the Mortgage on the Ship is discharged.

	10.03	For the purposes of Clause 10.02.02 a Total Loss shall be deemed to have occurred

	10.03.01	in the case of an actual total loss of the Ship on the actual date and at the time the Ship was lost or if such date is not known, on the date on which the Ship was last reported;

	10.03.02	in the case of a constructive total loss of the Ship upon the date and at the time notice of abandonment of the Ship is given to the Insurers of the Ship for the time being (provided a claim for such total loss is admitted by such Insurers) or, if such Insurers do not admit such a claim, or, in the event that such notice of abandonment is not given by the Borrower to the Insurers of the Ship, on the date and at a time on which the incident, which may result in the Ship, being subsequently determined to be a constructive total loss, has occurred;

	10.03.03	in the case of a compromised or arranged total loss of the Ship, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the Insurers of the Ship;

	10.03.04	in the case of Compulsory Acquisition of the Ship, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and

	10.03.05	in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to Compulsory Acquisition of the Ship by any Government Entity, or by persons purporting to act on

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behalf of any Government Entity), which deprives the Borrower of the use of the Ship for more than thirty (30) days, upon the expiry of the period of thirty (30) days after the date upon which the relevant hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation occurred.

	10.04	In case the Holding by the Approved Shareholders in the Guarantor falls below ten per cent (10%) without the prior written consent of the Lender, the Borrower shall be obliged to prepay the Indebtedness in full to the full satisfaction of the Lender, within thirty (30) Banking Days from the Lender's written notice to the Borrower to that effect.

	10.05	On giving not less than fifteen (15) days' prior written notice to the Lender the Borrower may prepay all or any part of the Facility (but if in part the amount to be prepaid shall be equal to one Repayment Instalment or a multiple thereof) at the end of the then current Interest Period without any premium of penalty. The Borrower shall obtain any consent or approval from the relevant authorities that may be necessary to make any such prepayment of the Facility and if it fails to obtain and/or comply with the terms of such consent or approval and in consequence thereof the Lender has to repay the amount prepaid or the Lender incurs any penalty or loss then the Borrower shall indemnify the Lender forthwith against all amounts so repaid and/or against all such penalties and losses incurred.

	10.06	Prepayments under Clause 10.05 shall be applied on a pro rata basis on the then outstanding relevant Repayment Instalments and the relevant Balloon Payment.

	10.07	Save as otherwise herein expressly provided, any prepayment of the Facility made or deemed to be made under this Agreement shall, if made otherwise than at the end of an Interest Period relative to the amounts prepaid, be made together with accrued interest thereon and such additional amount (if any) as the Lender may certify as necessary to compensate the Lender for any Broken Funding Costs incurred or to be incurred by it as a result of such prepayment including any loss of the Applicable Margin up to the end of the then current Interest Period in respect of the whole amount of the Facility which is outstanding at the beginning of such Interest Period.

	10.08	Any notice of prepayment given by the Borrower under this Agreement shall be irrevocable and the Borrower shall be bound to prepay in accordance with each such notice.

	10.09	The Borrower may not prepay all or any part of the Facility except in accordance with the express terms of this Agreement.

	10.10	On or prior to any prepayment of the Facility or any part thereof under this Clause 10 or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions as applicable so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortization) exceed the amount of the Facility as reducing from time to time thereafter pursuant to Clause 11.01.

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	10.11	Without prejudice to the foregoing, if less than the full amount of the Facility remains outstanding following a prepayment under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction in an amount not wholly matched with or linked to all or part of the Facility, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirement, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, which additional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require.

	10.12	Notwithstanding any provision of the Master Agreement to the contrary, in the case of a prepayment of all or part of the Facility (including, without limitation, following the occurrence of a Total Loss or upon a sale of the Ship or the discharge of a Mortgage in accordance. with Clause 10.01 Mandatory Prepayment), or under Clauses 10.04 (Mandatory Prepayment), 9 (Substitute Basis), 16 (Change of Circumstances) or 23 (Security Margin)) then, subject to Clause 10.11, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower, where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by any Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine and both the Lender's and the Borrower's continuing obligations under any Designated Transaction and/or the Master Agreement shall, unless agreed otherwise by the Lender, be calculated so far as the Lender considers it practicable by reference to the amended repayment schedule for the Facility taking into account the fact that less than the full amount of the Facility remains outstanding.

	10.13	The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 10.11 and 10.12.

	10.14	Without prejudice to or limitation of the obligations of the Borrower under Clause 10.13, in the event that the Lender exercises any of its rights under Clauses 10.11 and 10.12 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement.

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	11	REPAYMENT

	11.01	The Borrower shall repay the Facility by:

A)            If the Ship is under an Approved Charter

I)  twenty (20) equal consecutive Repayment Instalments, each such Repayment Instalment being in the amount of Three hundred Fifty Two thousand Dollars ($352,000) the first such Repayment Instalment being due and payable on the date falling three (3) months from the Drawdown Date and each of the succeeding eighteen (18) such Repayment Instalments, on the eighteen (18) Repayment Dates falling at consecutive three monthly intervals thereafter and the twentieth (20th) Repayment Instalment falling due two (2) months after the immediately preceding (nineteenth) Repayment Date on the twentieth and final Repayment Date; and

II)  the Balloon Payment payable together with the twentieth (2oth) Repayment Instalment referred to in sub-paragraph (a) above on the twentieth (2oth) and final Repayment Date; and

Ill)  each Additional Instalment Amount together with each corresponding Repayment Instalment (referred to under subparagraph (I) above) falling due within the period of the Approved Charter.

PROVIDED however, that if the amount of the Facility actually drawn is less than Dollars Nineteen million Nine hundred Fifty thousand Dollars ($19,950,000) then the Balloon Payment and the Repayment Instalments shall be reduced pro rata by the undrawn amount.

OR

B)            If the Ship is not under an Approved Charter

I)  twenty (20) equal consecutive Repayment Instalments, each such Repayment Instalment being in the amount of Three hundred Fifty Two thousand Dollars ($352,000) the first such Repayment Instalment being due and payable on the date falling three (3) months from the Drawdown Date and each of the succeeding eighteen (18) such Repayment Instalments, on the eighteen (18) Repayment Dates falling at consecutive three monthly intervals thereafter and the twentieth (20th) Repayment Instalment falling due two (2) months after the immediately preceding (nineteenth) Repayment Date on the twentieth and final Repayment Date; and

II)  the Balloon Payment payable together with the twentieth (20th) Repayment Instalment referred to in sub-paragraph (a) above on the twentieth (20th) and final Repayment Date;

PROVIDED however, that if the amount of the Facility actually drawn is less than Dollars Eighteen million Five hundred Twenty Five thousand ($18,525,000) then the

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relevant Balloon Payment and the relevant Repayment Instalments shall be reduced pro rata by the undrawn amount.

	11.02	Each Repayment Instalment and the Balloon Payment shall be paid in Dollars.

	11.03	Any amounts repaid or prepaid under this Agreement may not be re-borrowed.

	11.04	On or prior to any repayment of the Facility or any part thereof under this Clause 11, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions as applicable so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Facility as reducing from time to time thereafter pursuant to Clause 11.01.

	11.05	Without prejudice to the provisions of the foregoing Clause 11.04, Clauses 10.11, 10.12, 10.13 and 10.14 will also apply on the repayment of the Facility or any part thereof under this Clause 11.

	12	APPLICATION

	12.01	All Proceeds received by the Lender under or pursuant to any one or more of the Finance Documents and expressed to be applicable in accordance with the provisions of this Clause 12 shall be held by the Lender, to be applied in the following manner:

	12.01.01	first, in or towards payment of all sums other than principal of or interest on the Facility which may be owing to the Lender under this Agreement and the other Finance Documents or any of them;

	12.01.02	second, in or towards payment of any default interest and/or overdue principal payments payable to the Lender under the Finance Documents;

	12.01.03	third, in or towards payment to the Lender of any interest owing in respect of the Facility or any part thereof;

	12.01.04	fourth, in or towards payment to the Lender of principal owing in respect of the Facility;

	12.01.05	fifth, in or towards payment to the Lender of any amount due to it in accordance with the provisions of Clause 15 (Tax Gross up and Indemnities) and Clause 29 (Indemnity) by reason of any such payment in respect of the Facility not being effected on the last day of an Interest Period in respect of the total amount of the Facility;

	12.01.06	sixth, in or towards payment of any amounts then payable to the Lender under the Master Agreement and the other Finance Documents including without limitation any net amount which the Borrower shall have become liable to pay or deliver under section 2 (Obligations) of the Master Agreement but shall have failed to pay or deliver

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to the Lender at the time of application or distribution under this Clause 12, or any part thereof;

	12.01.07	seventh at any time on or after the occurrence of an Event of Default in retention of a sum equal to the total of any and all other amounts (as calculated by the Lender) which although not then due to the Lender under any one or more of this Agreement and the other Finance Documents will become so due to the Lender, such sums thereafter to be applied by the Lender from time to time in accordance with this Clause 12; and

	12.01.08	eighth, the surplus (if any) shall be paid to the Borrower or to whomsoever else may be entitled to receive such surplus.

	12.02	If any Proceeds recovered by the Lender have to be repaid by the Lender on the ground of unfair or fraudulent preference or on any other ground, the Lender shall have the same rights hereunder and/or under the other Finance Documents against the Borrower as if such amounts had never been applied in payment of the Indebtedness.

	13	EVIDENCE OF DEBT

	13.01	The Lender shall maintain in accordance with its usual practice one or more Loan Accounts in the name of the Borrower evidencing the Indebtedness.

	13.02	In any legal action or proceedings arising out of or in connection with this Agreement and/or the other Finance Documents the entries made in the Loan Account(s) maintained pursuant to Clause 13.01 or a certificate signed by one authorized officer of the Lender shall be conclusive evidence (save in the case of manifest error) of the existence and amounts of the liabilities of the Borrower therein recorded.

	14	PAYMENTS

	14.01	All amounts payable under this Agreement and/or the other Finance Documents by the Borrower, including amounts payable under this Clause 14, shall be paid in full to the Lender without set-off or counterclaim or retention and free and clear of and without any deduction or withholding for or on account of any Taxes.

	14.02	In the event the Borrower is required by law to make any such deduction or withholding from any payment hereunder then the Borrower shall, within a period of not more than seven (7) Banking Days therefrom, pay to the Lender such additional amount as will result in the receipt by the Lender of the full amount which would have been received hereunder had no such deduction or withholding been made, but if the Lender shall be or becomes entitled to any Tax credit or relief in respect of any Tax which is deducted from any payment by the Borrower and if the Lender in its reasonable determination actually receives a benefit from such Tax credit or relief in its country of domicile, incorporation or residence, the Lender shall, subject to any laws or regulations applicable thereto, pay to the Borrower after such benefit is effectively received by the Lender such amounts (which shall be conclusively certified- in the absence of manifest

34

error – by the Lender) as shall ensure that the net amount actually retained by the Lender is equal to the amount which would have been retained if there had been no such deduction; the Borrower shall promptly forward to the Lender any official receipt of the relevant taxation or other authority or other evidence acceptable to the Lender of the amount deducted or withheld as aforesaid, provided that in the event that it shall be illegal for the Borrower to pay such additional amount as is referred to in this Clause

	14.03	then the Indebtedness shall be repayable by the Borrower to the Lender on demand.

	14.04	All payments to be made by the Borrower under this Agreement and/or the other Finance Documents shall be made in Dollars in immediately available and freely transferable and convertible funds not later than 11.00 a.m. London time on the date upon which the relevant payment is due to the Lender at such account as the Lender may from time to time nominate by written notice to the Borrower

	14.05	The Borrower undertakes to indemnify the Lender against any loss incurred by the Lender as a result of any judgment or order being given or made for the payment of any amount due under this Agreement and/or the other Finance Documents and such judgment or order being expressed in a currency other than the currency in which the payment was due under this Agreement and/or the other Finance Documents and as a result of any variation having occurred in rates of exchange between the date on which the currency is converted for the purpose of such judgment or order and the date of actual payment thereof. This indemnity shall constitute a separate and independent liability of the Borrower and shall continue in force and effect notwithstanding any such judgment or order as aforesaid.

	15	TAX GROSS UP AND INDEMNITIES

Without prejudice to the generality of Clauses 14.02 and Clause 33:

	15.01	For the purposes of this Clause the following terms will have the meaning ascribed to them herein:

"Protected Party" means the Lender if it is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.

"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

"Tax Payment" means either the increase in a payment made by a Security Party to the Lender under Clause 15.02 (Tax gross-up) or a payment by the Borrower under Clause 15.03 (Tax indemnity).

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	15.02	The Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by them without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:

	15.02.01	the Borrower shall, promptly upon becoming aware, that the Borrower or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly.

 Similarly, the Lender shall notify the Borrower on becoming so aware in respect of a payment payable to the Lender;

	15.02.02	if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;

	15.02.03	if the Borrower or any other Security Party is required to make a Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law;

	15.02.04	within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) deliver to the Lender a statement under section 975 of the ITA or other evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority;

	15.03	Tax indemnity

	15.03.01	The Borrower shall (within three (3) Banking Days of the written demand by the Lender) pay to the Lender, if the Lender is a Protected Party, an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.

	15.03.02	Clause 15.03.01 shall not apply:

(a)            with respect to any Tax assessed on the Lender:

(i)            under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as resident for tax purposes; or

(ii)       under the law of the jurisdiction in which the Facility office of the Lender is located in respect of amounts received or receivable in that jurisdiction,

36

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or

(b)            to the extent a loss, liability or cost (i) is compensated for by an increased payment under Clause 15.02 (Tax gross-up), or Clause 15.07 (FATCA Deduction and gross-up by a Security Party) or Clause 15.08 (FATCA Deduction by the Lender);

The Lender making, or intending to make, a claim under paragraph (a) above shall promptly notify the Borrower in writing of the event which will give, or has given, rise to the claim.

In the event that it shall be illegal for the Borrower to pay such additional amount as is referred to in this Clause 15.03.01 then the Indebtedness shall be repayable by the Borrower to the Lender on demand.

	15.04	Tax Credit

	15.04.01	If a Security Party makes a Tax Payment and the Lender determines that:

	15.04.01.1	a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and

	15.04.01.2	the Lender has obtained, utilised and retained that Tax Credit,

   the Lender shall pay an amount to that Security Party which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by that Security Party.

	15.05	VAT

	15.05.01	All amounts expressed to be payable under a Finance Document by any Security Party to the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Security Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Security Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to the Borrower).

	15.05.02	Where a Finance Document requires any Security Party to reimburse or indemnify the Lender for any cost or expense, that Security Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

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	15.05.03	Any reference in this Clause 15.05 to any Security Party shall, at any time when such Security Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

	15.05.04	In relation to any supply made by the Lender to any Security Party under a Finance Document, if reasonably requested by the Lender, that Security Party must promptly provide the Lender with details of that Security Party's VAT registration and such other information as is reasonably requested in connection with the Lender's VAT reporting requirements in relation to such supply.

	15.06	FATCA information

	15.06.01	Subject to Clause 15.06.03, each Party shall, within ten Banking Days of a reasonable request by another Party:

(a)                confirm to that other Party whether it is: (i) a FATCA Exempt Party; or (ii) not a FATCA Exempt Party; and

(b)          supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

	15.06.02	If a Party confirms to another Party pursuant to Clause 15.06.01 (a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

	15.06.03	Clause 15.06.01 shall not oblige the Lender to do anything which would or might in its reasonable opinion constitute a breach of:

a.  any law or regulation;

b.  any fiduciary duty;

c.  any duty of confidentiality; or

d.  any policy of the Lender.

	15.06.04	If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 15.06.01 (including, for the avoidance of doubt, where Clause 15.06.03 applies), then:

	15.06.04.1	if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

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	15.06.04.2	if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

	15.07	FATCA Deduction and gross-up by a Security Party

	15.07.01	If a Security Party is required to make a FATCA Deduction, that Security Party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

	15.07.02	If a FATCA Deduction is required to be made by a Security Party, the amount of the payment due from that Security Party shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

	15.07.03	The Borrower shall promptly upon becoming aware that a Security Party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the Borrower and that Security Party in writing.

	15.07.04	Within 30 days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Security Party making that FATCA Deduction or payment shall deliver to the Lender evidence reasonably satisfactory to the Lender that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.

	15.08	FATCA Deduction by the Lender

	15.08.01	The Lender may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Lender shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. The Lender shall notify the Borrower accordingly.

	15.08.02	The Borrower shall (within three Banking Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered by the Lender as a result of making a FATCA Deduction in respect of a payment due to it under a Finance Document.

	15.08.03	The Lender making, or intending to make, a claim under paragraph 15.08.02 above shall promptly notify in writing the Borrower of the FATCA Deduction.

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	16	CHANGE OF CIRCUMSTANCES

	16.01	If:

	16.01.01	any law, regulation, treaty or official directive (whether or not having the force of law) or the interpretation thereof by any authority charged with the administration thereof:

	16.01.01.1	subjects the Lender to any Tax with respect to payments of principal of or interest on the Facility or any other amount payable hereunder; or

	16.01.01.2	changes the basis of Taxation of payments to the Lender of principal of or interest on the Facility or of any other amount payable hereunder (other than a change in the rate of Tax on the overall net income of the Lender); or

	16.01.01.3	imposes, modifies or deems applicable any reserve and/or special deposit requirements against or in respect of assets or liabilities of, or deposits with or for the account of, or loans or credit extended by the Lender; or

	16.01.01.4	imposes on the Lender any other condition affecting this Agreement, the Facility or its funding; or

	16.01.02	the Lender complies with any request, law, regulation (including any which relates to capital adequacy or liquidity control or which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement [including without limitation, those resulting from (a) the implementation or application of or compliance with the "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, as amended, supplemented or restated, and (b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement -Rules text" published by the Basel Committee on Banking Supervision in November 2011 and (c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III"] or directive from any applicable fiscal or monetary authority (whether or not having the force of law) and as a result of any of the foregoing either directly or indirectly;

	16.01.03	the cost to the Lender of making, funding or maintaining the Facility is increased; or

	16.01.04	the amount of principal, interest or other amount payable to the Lender or the effective return to the Lender hereunder is reduced; or

	16.01.05	the Lender makes any payment or foregoes any interest or other return on or calculated by reference to the gross amount receivable by it from the Borrower hereunder,

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then and in each such case upon demand from time to time the Borrower shall pay to the Lender such amount as shall compensate the Lender for such increased cost, reduction, payment or foregone interest or other return. If the Lender is entitled to make a claim pursuant to this Clause it shall notify the Borrower of the event by reason of which it is so entitled and shall submit to the Borrower a certificate setting out details of the event giving rise to such compensation, the amount thereof and the manner in which it has been calculated and in the absence of manifest error such certificate shall be conclusive:

On receipt of such certificate the Borrower shall have the option to prepay within ninety (90) days the Facility together with all interest accrued thereon and all costs and other amounts (including amounts payable as referred to above and any Broken Funding Costs) payable to the Lender hereunder. If the Borrower decides to exercise such option it shall give written notice to the Lender and prepay the amount due to the Lender within ninety (90) days of the receipt of the certificate referred to above together with any other amounts payable to the Lender under this Agreement. The Lender's duties and liabilities hereunder shall be cancelled on the giving of such notice.

	16.02	Notwithstanding anything to the contrary herein contained, if any change in law, regulation or treaty or in the interpretation or application thereof by any authority charged with the administration thereof shall make it unlawful for the Lender to make, fund or maintain the Facility or any part thereof, the Lender may by written notice thereof to the Borrower declare that the Lender's duty to provide the Borrower with the Facility shall be terminated forthwith whereupon the Borrower shall prepay forthwith (or if permitted by law on the next following Interest Payment Date) the Facility together with all interest accrued thereon and all other amounts payable to the Lender hereunder including any Broken Funding Costs. The Lender's duties and liabilities hereunder shall be cancelled on the giving of such notice.

	16.03	If any of the events referred to in Clause 16.01 or Clause 16.02 shall occur, but without prejudice to the liability of the Borrower to prepay the Facility, the Borrower and the Lender shall negotiate in good faith with a view to agreeing terms for making the Facility available from another jurisdiction, or funding the Facility from alternative sources or otherwise restructuring the Facility on a basis which is not unlawful.

	17	REPRESENTATIONS AND WARRANTIES

	17.01	The Borrower hereby represents and warrants to the Lender that the following matters are true at the time of this Agreement and warrant that they shall remain true until full payment of all amounts payable hereunder:

	17.01.01	each Corporate Security Party is a company or corporation duly formed and validly existing under the laws of the country of its Original Jurisdiction and has the power and authority to own its respective assets and carry on business in each Relevant Jurisdiction and complies with all relevant legislation and laws and regulations (including but not limited to the laws and regulations relating to the listing of the

41

shares of the Guarantor in NASDAQ) to the extend applicable to such Corporate Security Party;

	17.01.02	the Borrower has the power to borrow hereunder and to enter into Designated Transactions and each Security Party has power to enter into this Agreement and the other Subject Documents to which it is a party and to perform and discharge its respective duties and liabilities hereunder and thereunder and each Security Party has taken all necessary action (whether corporate or otherwise) required to authorise the execution, delivery and performance of this Agreement and the other Subject Documents to which is a party and the borrowing to be made hereunder;

	17.01.03	the execution, delivery and performance of this Agreement and the other Subject Documents will not contravene or exceed the powers granted to each Security Party or by, or any provision of, any law or regulation (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ, as the case may be), in any Relevant Jurisdiction of the Security Parties or any of them, any order or decree of any competent governmental agency or court of or in any Relevant Jurisdiction of the Security Parties or any of them, the certificates of incorporation, memoranda and articles of association of the Corporate Security Parties or any of them or any mortgage, deed, contract or agreement to which the Security Parties or any of them is/are a party and which is binding upon the Security Parties' assets and will not cause any Encumbrance (other than Permitted Liens) to arise over or attach to all or any part of any Security Party's revenues or assets nor require any Security Party to create any such Encumbrance otherwise than in favour of the Lender;

	17.01.04	all consents, licences, approvals, registrations, authorisations or declarations (including, without limitation, all foreign exchange control approvals) in any Relevant Jurisdiction of the Security Parties or any of them required to enable the Borrower to borrow hereunder and the Borrower and each of the other Security Parties lawfully to enter into and perform and discharge their respective duties and liabilities under this Agreement and the other Subject Documents, to which each is a party and to ensure that the duties and liabilities of each of the Security Parties hereunder and thereunder are legal, valid and enforceable in accordance with the terms of this Agreement and the other Subject Documents to which each is a party and to make this Agreement and the other Subject Documents admissible in evidence in such aforesaid jurisdictions have been obtained or made and are in full force and effect;

	17.01.05	this Agreement and the other Subject Documents constitute the legal, valid, binding and unconditional duties and liabilities of each Security Party as is a party thereto, enforceable against such Security Party in accordance with the terms thereof;

	17.01.06	no Security Party has failed to pay when due any amount or to perform any duty under the provisions of any agreement to which it is a party or by which it may be bound relating to Financial Indebtedness in excess in aggregate of One million Dollars ($1,000,000) and no event has occurred and is continuing which constitutes,

42

or which with the giving of notice or lapse of time or both would constitute, a material breach or default by such Security Party under any such agreement;

	17.01.07	no litigation, arbitration, tax claim or administrative proceedings in any court, arbitration tribunal or governmental authority are pending or, to the knowledge of the Borrower, threatened against any Security Party or any of its respective assets which might materially adversely affect such Security Party's ability to perform and discharge its respective duties and liabilities hereunder and under the other Subject Documents to which it is a party thereto;

	17.01.08	the financial condition of the Security Parties has not suffered any material deterioration since that condition was last disclosed to the Lender;

	17.01.09	the information provided to the Lender in relation to this transaction is true and correct in all material respects and does not omit any material detail;

	17.01.10	except for the registration of the Mortgage at the appropriate Registry of ships, it is not necessary or advisable to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or of any one or more of the other Subject Documents, that any of them be filed, recorded or enrolled with any governmental authority or agency or that they be stamped with any stamp, registration or similar transaction tax in the United States or in the United Kingdom or in the Republic of the Marshall Islands or in the Republic of Liberia or in the Republic of Greece or in' any other Relevant Jurisdiction;

	17.01.11	the Accounting Information provided by the Borrower and/or the Guarantor to the Lender is complete and correct and presents fairly the position of the members of the Group therein stated and the results of the operations of the members of the Group therein stated ended on the relevant date, and have been prepared in accordance with the Applicable Accounting Principles and practices consistently applied and give a true and fair view of the financial condition, assets and liabilities of the members of the Group therein stated at the date to which such Accounting Information have been prepared and since that date there has been no adverse change in the financial condition of the business, assets or operation of the members of the Group therein stated or the Group taken as a whole (as the case may be);

	17.01.12	all the obligations and liabilities of the Borrower hereunder and of the other Security Parties under the other Subject Documents rank and will rank at least pari passu in right of payments with all other unsubordinated indebtedness of the Borrower or of the other Security Parties;

	17.01.13	no Security Party is entitled to claim any immunity in relation to itself or its assets under any law or in any jurisdiction in connection with any legal proceedings, set off or counterclaim relating to this Agreement and the other Subject Documents to which it is a party or in connection with the enforcement of any judgment or order arising from such proceedings;

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	17.01.14	the Borrower has not incurred any Financial Indebtedness, or authorised or accepted any capital commitments (other than that normally associated with the construction of or the day-to-day operation of the Ship, where appropriate);

	17.01.15	no Taxes are imposed by deduction withholding or otherwise on any payment made or to be made by any Security Party under this Agreement and/or any other of the Subject Documents or are imposed on or by virtue of the execution or delivery of this Agreement and/or any other of the Subject Documents or any document or instrument to be executed or delivered hereunder or thereunder and all relevant tax returns have been filed and/or will be filed when due;

	17.01.16	None of the Security Parties is a FATCA FFI or a US Tax Obligor;

	17.01.17	None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.

	17.01.18	No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Security Parties with respect to Taxes.

	17.01.19	Each of the Security Parties (other than the Manager) is resident for Tax purposes only in its Original Jurisdiction and the Manager is resident for Tax purposes only in the Republic of Greece.

	17.01.20	Each of the Security Parties and each member of the Group has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

	17.01.21	It is not necessary under the laws of any Relevant Jurisdiction of any of the Security Parties (i) in order to enable the Lender to enforce its rights under any Finance Document; or (ii) by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document, that the Lender should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties and the Lender is not and will not be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties by reason only of the execution, performance and/or enforcement of any Finance Document.

	17.01.22	Any borrowing by the Borrower under this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for the Borrower's own account and will not involve any breach by it of any law or regulatory measure relating to "money laundering" as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities.

	17.01.23	
the choice of law agreed to govern this Agreement and each other Subject Document and the submission to the jurisdiction of the courts agreed in each of the Subject Documents are or will be on execution of the respective Subject Documents

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valid and binding on the Borrower and any other Security Party which is a party thereto;

	17.01.24	the giving of the Guarantee pursuant to this Agreement by the Guarantor is to the commercial benefit of the Guarantor;

	17.01.25	each Security Party and each member of the Group is in compliance, in all respects, with all Sanctions;

	17.01.26	none of the Security Parties and/or the other members of the Group is a Prohibited Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and it does not own or control a Prohibited Person; and

	17.01.27	no proceeds of the Facility shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

	17.02	The Borrower hereby further represents and warrants to the Lender that on the Delivery Date the following matters will be true and shall remain true in all material respects throughout the Security Period:

	17.02.01	the Ship has unconditionally been delivered to and accepted by the Borrower pursuant to the Purchase Documents and the full amount of the Construction Cost payable in respect thereof has been duly paid;

	17.02.02	the Ship is duly registered in the name of the Borrower under a flag acceptable to the Lender;

	17.02.03	the Ship is and will remain in the absolute and unencumbered ownership of the Borrower, save as contemplated by this Agreement and the other Finance Documents;

	17.02.04	the Ship has and will maintain the highest class with the Classification Society free of all recommendations and qualifications of her Classification Society affecting class;

	17.02.05	the Ship is and will remain operationally seaworthy;

	17.02.06	the Mortgage in respect of the Ship has been duly recorded against the Ship as a valid first priority ship mortgage in favour of the Lender in accordance with the laws of her flag;

	17.02.07	the Ship, the Borrower and the Manager will comply with all relevant laws, regulations and requirements (statutory or otherwise) including without limitation all Sanctions, and the ISM Code, the ISPS Code, the ISM Code Documentation and the ISPS Code Documentation as are applicable to (i) ships registered under the laws of the flag the Ship is flying and (ii) engaged in the same or a similar service as the Ship is engaged;

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	17.02.08	the Ship is and will remain under the management of the Manager under the terms of the Management Agreement;

	17.02.09	the Ship is and will remain insured in accordance with the provisions of this Agreement in respect of the Insurances;

	17.02.10	the Borrower and the Manager comply with the provisions of all Environmental Laws in respect of the Ship;

	17.02.11	the Borrower and the Manager have obtained all Environmental Approvals and are and shall be in compliance with all such Environmental Approvals in respect of the Ship;

	17.02.12	neither the Borrower nor the Manager have received notice of any Environmental Claim that alleges that the Borrower or the Manager is not in compliance with any Environmental Law or any Environmental Approval in respect of the Ship;

	17.02.13	there is no Environmental Claim pending against the Borrower and/or the Manager and/or the Ship;

	17.02.14	no Environmental Incident has occurred which could or might give rise to any Environmental Claim against the Borrower and/or the Manager and/or the Ship;

	17.02.15	there are and will be no commissions, rebates, premiums or other payments by or to or on account of the Borrower, the other Security Parties and the shareholders of the Corporate Security Parties in connection with the Purchase Documents relating to the Ship other than as disclosed to the Lender by the Borrower in writing;

	17.02.16	none of the parties to the Purchase Documents is in default thereunder;

	17.02.17	the balance of the Construction Cost of the Ship (in addition to the part thereof to be financed with the proceeds of the Facility) has not been or, will not be provided by way of any loan from any party;

	17.03	The Borrower further represents, warrants and confirms to the Lender that:

	17.03.01	it enters into this Agreement for its own account and receives the Facility or any part thereof for its sole benefit; and

	17.03.02	it will promptly inform the Lender (by written notice to the Lender) if it is not, or ceases to be, such beneficiary(ies) and will then set down in writing the name(s) and the address(es) of the relevant beneficiary(ies).

	17.04	The representations and warranties of the Borrower set out in Clauses 17.01 and 17.02 and 17.03 above shall survive the execution of this Agreement and shall be deemed to be repeated on the Drawdown Date and on each Repayment Date, and on each Interest Payment Date and on the date of entering into each Designated Transaction with respect to the facts and circumstances existing at each such time as if made at such time.

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	18	SECURITIES

	18.01	The Borrower hereby agrees that the Security Documents shall secure with first priority the due payment of the Indebtedness.

	18.02	It is declared and agreed in relation to the security created by the Security Documents that:

	18.02.01	it shall be held by the Lender as a continuing security for the payment of the Indebtedness; and

	18.02.02	the security so created shall not be satisfied or discharged by intermediate payment or satisfaction of any part of the amount secured thereunder; and

	18.02.03	the security so created shall be in addition to and shall not in any way be prejudiced or affected by any collateral or other security now or hereafter held by the Lender for all or any part of the amounts thereby secured; and

	18.02.04	every power and right given to the Lender hereunder and under the Master Agreement shall be in addition to and not in limitation of any and every other power or right of the Lender under the Security Documents and may be exercised from time to time in such order and as often as the Lender may consider appropriate.

	19	CONDITIONS PRECEDENT AND SUBSEQUENT

	19.01	Notwithstanding the provisions of Clause 5, the agreement of the Lender to permit the drawdown of the Facility and/or the entering into any Designated Transaction is subject to the condition that the Lender shall have received not later than the Drawdown Date the following documents or evidence in form and substance satisfactory to the Lender and its legal advisers:

	19.01.01	a copy, certified as a true copy by the secretary of each Corporate Security Party of the resolutions of the shareholders of the Borrower and resolutions of the directors of each of the Borrower, the Guarantor and the Manager, authorising the transaction contemplated hereby, resolving the issuance of each respective power of attorney to be provided under Clause 19.01.02 and authorising a person or persons to sign or executeon their behalf this Agreement, the Notice of Drawdown, the Acknowledgement (as in the form of Schedule 2 hereof) and the other Finance Documents as each is a party thereto;

	19.01.02	the originals of any power or powers of attorney granted pursuant to Clause 19.01.01;

	19.01.03	certificates or other evidence satisfactory to the Lender, in its sole discretion of the existence and good standing of each Security Party;

	19.01.04	certificate issued by the respective director or secretary of each Corporate Security Party specifying the Directors and Officers of each such Corporate Security

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Party (and of any corporate director, officer thereof), its authorized and issued share capital (and of any corporate shareholder thereof) and in respect of the Borrower, a certificate issued by a director or the secretary of the Borrower, specifying the shareholders thereof;

	19.01.05	copies of the relevant constitutional documents of each Corporate Security Party, certified as true copies by the Borrower's legal counsel;

	19.01.06	certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action (including but without limitation governmental approval, consents, licences, authorisations, validations or exemptions which the Lender or its legal advisers may require) by the Security Parties or any of them with respect to this Agreement and the other Finance Documents;

	19.01.07	such documents or evidence relating to the ultimate beneficial ownership of the Borrower and any corporate shareholder(s) thereof in form and substance satisfactory to the Lender;

	19.01.08	such documents or evidence relating to the verification of identity and knowledge of the Lender's customers and compliance to the full satisfaction of the Lender with all necessary "know your customer" and money laundering requirements (including but without limitation compliance to the full satisfaction of the Lender with any requirements in relation to the shares of the Borrower and the Manager and any corporate shareholder(s) thereof), as the Lender may in its absolute discretion require;

	19.01.09	evidence that the Earnings Account has been duly opened by the Borrower, as appropriate and all mandate forms, signature cards and authorities have been duly delivered and that the Earnings Account is free of all liens or charges;

	19.01.10	payment of the fees in accordance with Clause 26;

	19.01.11	evidence that the Borrower have complied with its obligations under Clauses 20.37 and 20.38;

	19.01.12	evidence that the Ship has been duly delivered to and accepted by the Borrower and that she is duly registered in the ownership of the Borrower at the relevant ships' Registry acceptable by the Lender, free of any Encumbrances otherwise than as contemplated herein;

	19.01.13	(if required by the Lender) a charter free market valuation of the Ship on the basis specified in Clause 22.26;

	19.01.14	evidence that the Ship is insured in accordance with the provisions of this Agreement;

	19.01.15	evidence that the Ship is classed at the highest classification status with the Classification Society free of recommendations or other conditions or notations affecting her class;

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	19.01.16	certified copies of the classification and international safety and trading certificates issued by the Classification Society of the Ship and each other competent authority (as the case may be) free of recommendations or other conditions affecting her class;

	19.01.17	copies of the ISM Code Documentation and the ISPS Code Documentation in relation to the Ship, the Borrower and the Manager;

	19.01.18	the Mortgage on the Ship duly executed by the Borrower, legalised as appropriate and registered at the appropriate Shipping Registry;

	19.01.19	the Master Agreement and the Master Agreement Assignment duly executed by the Borrower;

	19.01.20	the General Assignment and Earnings Account Charge duly executed by the Borrower;

	19.01.21	notices of assignment of the Insurances in respect of the Ship duly signed by the Borrower;

	19.01.22	notices of assignment of the Earnings in respect of the Ship duly signed by the Borrower;

	19.01.23	the Manager's Undertaking in respect of the Ship together with notices of assignment of the right, title and benefit of the Manager to the Insurances of the Ship, duly executed, as appropriate;

	19.01.24	the Guarantee duly executed by the Guarantor;

	19.01.25	(in case the Ship is under an Approved Charter) the Approved Charter Assignment duly executed by the Borrower together with the relevant notices thereof acknowledged by the relevant charterer(s);

	19.01.26	copy of the Management Agreement, the Purchase Documents and the Approved Charter (if any), all certified as true and complete copies thereof by the Borrower's legal counsel;

	19.01.27	the Manager's Undertaking in respect of the Ship duly executed by the Manager, and respective notices thereof;

	19.01.28	evidence that an amount of Seven thousand Five hundred Euros (€7,500), plus disbursements and VAT thereon has been paid to the Messrs V&P Law Firm in connection with the preparation of this Agreement and the other Finance Documents, or irrevocable written mandates to the Lender to make those payments forthwith by debiting any account of the Borrower held with the Lender;

	19.01.29	such further documents and evidence as the Lender may hereafter request.

	19.02	The agreement of the Lender to maintain the Facility or any part thereof and/or to enter into any Designated Transaction is subject to the condition that the Lender shall have

49

received as soon as practicable after the Drawdown Date, but in any event not later than twenty (20) days after the Drawdown Date, the following documents or evidence in form and substance satisfactory to the Lender and its legal advisers

	19.02.01	a letter from the agents referred to in Clauses 41.04 and 41.05 addressed to the Lender confirming acceptance of their appointment as agents for service of process;

	19.02.02	the opinion letters from counsels appointed and/or acceptable to the Lender as well as opinion letters from the Security Parties' legal counsel in relation to this Agreement and the other Finance Documents in form and substance satisfactory to the Lender; and

	19.02.03	
such further documents and evidence as the Lender may hereafter request.

	19.03	The obligation of the Lender to advance the Facility or any part thereof is further subject to the following conditions:

	
19.03.01

	That both at the date of the Notice of Drawdown and on the Drawdown Date:

(i)  no Event of Default or Potential Event of Default has occurred or might result from making the Facility available; and

(ii)  the representations and warranties of the Borrower set out in Clause 17 as well as the representations and warranties of the Borrower and of the other Security Parties set out in the other Finance Documents are true and accurate in all material respects as of each such date, as if made on each such date with reference to the facts then subsisting; and

(iii)  there is not a Material Adverse Effect in relation to any one or more of the Security Parties or any other member of the Group; and

(ii) that none of the circumstances specified in Clause 16 has occurred and is continuing; and

	19.03.02	
That if the test set out in Clause 23 was applied immediately following the advance of the Facility, the Borrower would not be obliged to provide additional security or prepay part of the Facility as therein provided.

	19.04	If the Lender, at its discretion, permits the Facility or any part thereof to be borrowed before certain of the conditions referred to in Clause 19.01 as the case may be are satisfied, the Borrower shall ensure that those conditions are satisfied within five (5) Banking Days after the Drawdown Date (or such longer period as the Lender specifies).

	20	GENERAL UNDERTAKINGS

The Borrower undertakes with the Lender to comply with the following provisions of this Clause 20 at all relevant times during the Security Period, except as the Lender may otherwise previously permit in writing:

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	20.01	to (and ensure and procure that each other Security Party shall) supply the Lender with such number of copies as the Lender may require of (a) the annual Accounting Information as soon as available but in any event not later than one hundred and fifty (150) days after the end of the relevant period to which they relate starting with the 2013 financial statements and (b) such other information with regard to the business, properties or condition, financial or otherwise, of the Guarantor, the Manager and the other members of the Group as the Lender may from time to time reasonably request;

	20.02	to procure that the Accounting Information to be delivered from time to time in accordance with Clause 20.01 shall be prepared in accordance with the Applicable Accounting Principles and practices consistently applied, which shall present fairly the financial positions, as at the end of each such financial year to which they relate, of the Group and the results of its operations for the year to which the Accounting Information relates.

	20.03	to (and ensure and procure that each other Security Party shall) obtain promptly at any time and from time to time such registrations, licenses, consents and approvals as may be required in respect of this Agreement and the other Subject Documents under any applicable law or regulation to enable them to perform and discharge their respective duties and liabilities hereunder and thereunder and promptly supply the Lender with copies thereof;

	20.04	to (and ensure and procure that each other Security Party shall) ensure that at all times the claims of the Lender against the Borrower and the other Security Parties under this Agreement and the other Finance Documents rank at least pari passu with the claims of all other unsecured creditors of the relevant Security Party save those whose claims are preferred by any bankruptcy, insolvency or other similar laws of general application;

	20.05	to (and ensure and procure that each other Security Party shall) deliver to the Lender translations into English (certified by an authorised translator) of any documents which have to be delivered to the Lender under the terms of this Agreement or the other Subject Documents, the originals of which are not in the English language;

	20.06	not to make any loans or advances to, or any investments in, any person, firm, corporation or joint venture (or to any officer, director, stockholder, employee or customer of any such person) other than loans or advances made in the ordinary course of business;

	20.07	not to (and ensure and procure that the Guarantor shall not) declare or pay any dividends or make any distributions to its respective shareholders in any form whatsoever if:

	20.07.01	an Event of Default or a Potential Event of Default has occurred; or

	20.07.02	immediately following such payment of dividends and/or distributions the test set out in Clause 23 was applied and the Borrower would be obliged to provide additional security or prepay part of the Facility as therein provided; or

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	20.07.03	immediately following such payment of dividends and/or distributions the Borrower would be in breach of Clause 20.38;

	20.08	not to borrow any money or permit any such borrowing to continue or incur any Financial Indebtedness whatsoever other than the Facility and the Swap Exposure or other than by way of subordinated shareholders' loans or enter into any agreement for payment on deferred terms (otherwise than on customary suppliers' credit terms) or any equipment lease or contract hire agreement other than in the ordinary course of business;

	20.09	not to assume, guarantee or otherwise undertake the liability of any person, firm or company (otherwise than pursuant to the terms hereof and in the ordinary course of construction, operation or trading of the Ship);

	20.10	not to authorise or accept any capital commitments (save and except in connection with the ordinary course of construction, operation or trading of the Ship);

	20.11	not to (and ensure and procure that each other Security Party shall not) change the nature of its respective business or commence any business other than the ownership and operation of ships and activities ancillary thereto;

	20.12	not to (and ensure and procure that each other Security Party shall not) (save and except as provided in this Agreement or otherwise in favour of the Lender), create or permit to exist any Encumbrance whatsoever on the Ship or on any of its other property or assets, real or personal, whether now owned or hereafter acquired, other than a Permitted Lien;

	20.13	without prejudice to the obligations of the Borrower under Clause 20.14, promptly after the happening of an event which is (or may, with the giving of notice or passage of time or satisfaction of any other condition or any combination of the foregoing, become) an Event of Default, to notify the Lender in writing of such event and of the steps (if any) which are being taken to nullify or mitigate its effect;

	20.14	from time to time on request by the Lender to (and ensure and procure that each other Security Party shall) deliver to it a certificate signed by a director or officer of such Corporate Security Party confirming that, save as may be notified in detail in such certificate, no Event of Default or Potential Event of Default has occurred and is then subsisting, to be accompanied by such evidence as to the information and matters contained in such certificate as the Lender may from time to time reasonably require;

	20.15	to (and procure that each other relevant Security Party shall) ensure and procure that each Corporate Security Party shall maintain its corporate existence under the laws of its Original Jurisdiction and shall comply in all material respects with all relevant legislation and laws and regulations (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ), applicable to such Corporate Security Party;

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	20.16	to (and procure that each other relevant Security Party shall) ensure and procure that no change in

(a)  the registered ownership of the shares of the Borrower and

(b)  the registered or beneficial ownership of the shares of the Manager and the Ship shall occur;

	20.17	to execute and procure the execution by each other Security Party of any further document or documents reasonably required by the Lender in order to perfect or complete the security created by the Security Documents;

	20.18	to (and ensure and procure that each other Security Party shall) pay all Taxes, assessments and other governmental charges when the same fall due, except to the extent that the same are being contested in good faith by appropriate proceedings and adequate reserves have been set aside for their payment if such proceedings fail and ensure and procure that all its relevant tax returns shall be properly and timely filed;

	20.19	other than in accordance with this agreement, not to convey, assign, transfer, sell or otherwise dispose of or deal with the Ship or any of its real or personal property, assets or rights whether present or future, neither to assign or otherwise transfer its rights title and interest unto the Master Agreement;

	20.20	to send (or procure that it is sent) to the Lender as soon as the same is instituted (or, to the knowledge of any Security Party threatened), details of any litigation, arbitration or administrative proceedings against or involving a Security Party, or the Ship which is likely to have a Material Adverse Effect on a Security Party or the operation of the Ship;

	20.21	to comply (and ensure that each other Security Party will comply) with all laws regulations (including but not limited to the laws and regulations relating to the listing of the shares of the Guarantor in NASDAQ, as the case may be), treaties and conventions applicable to the Borrower, the other Security Parties and the Ship and to carry on the Ship all certificates and other documents which may from time to time be required to evidence such compliance;

	20.22	not to (and ensure and procure that no Security Party will) become a FATCA FFI or a US Tax Obligor;

	20.23	to (and ensure and procure that the Security Parties and the other members of the Group will) comply, in all respects, with all Sanctions;

	20.24	not to (and ensure and procure that none of the Security Parties and the other members of the Group will) become a Prohibited Person or become owned or controlled by, or act directly or indirectly on behalf of, a Prohibited Person, or become the owner or controller of a Prohibited Person;

	20.25	not to make, directly or indirectly, available any proceeds of the Facility to or for the benefit of a Prohibited Person and to ensure and procure that any proceeds of the

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Facility is not, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions;

	20.26	not to and ensure and procure that the Borrower and the Manager and any corporate shareholder(s) thereof shall not dissolve, merge into or consolidate with any other company or person and ensure and procure that no change in the management or the legal ownership of the Borrower and the Ship shall be effected;

	20.27	to (and procure that the Guarantor will) ensure that no change in the Chief Executive Officer and/or the Chairman of the Guarantor shall occur;

	20.28	to use the proceeds of the Facility for its benefit and under its full responsibility and exclusively for the purpose specified in this Agreement;

	20.29	not to (and ensure and procure that no other Security Party will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions;

	20.30	to (and ensure and procure that each of the Security Parties and each member of the Group will) conduct its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws;

	20.31	to ensure and procure that, throughout the Security Period, all payments in relation to the operation of the Ship will be effected through the Lender (either via the Piraeus branch or any other branch reasonably nominated by the Lender);

	20.32	to ensure and procure that the Swap Exposure shall not exceed the Maximum Permitted Swap Exposure;

	20.33	to (and ensure and procure that each other Security Party will) deliver promptly to the Lender such documents and evidence as the Lender shall from time to time require relating to the ultimate beneficial ownership of the Borrower, the Manager and their respective corporate shareholder(s) (save from the Guarantor);

	20.34	to (and ensure and procure that each other Security Party will) deliver to the Lender such documents and evidence as the Lender shall from time to time require relating to the verification of identity and knowledge of the Lender's customers and the compliance by the Lender with all necessary "know your customer" or similar checks, and to comply within thirty (30) days from the Lender's written notice to the Borrower to that effect, to the full satisfaction of the Lender, with any requirements of the Lender in relation to the shares of the Borrower and the other members of the Group and their respective corporate shareholder(s) [including but without limitation any requirements of the Lender as to the approved form of the shares (registered or otherwise) of the Borrower and the other members of the Group and their corporate shareholder(s)], always on the basis of applicable laws and regulations or the Lender's own internal (generally applied)

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guidelines, in each case as such laws, regulations or internal guidelines apply from time to time;

	20.35	to (i) provide the Lender with any documentation or information, as the Lender may request, which relates to individual or entity tax status and (ii) inform the Lender, or respond to any request from the Lender, if there are any changes to tax information previously provided;

	20.36	upon request by the Lender, to obtain, and to ensure and procure that each other Security Party will obtain a written waiver or consent from its respective Substantial Owners or Controlling Persons, which will be provided to the Lender to permit the Lender and other members of the HSBC Group to disclose and report tax and account specific financial information to any local or foreign Tax Authority. Where any one of the Borrower and/or the other Security Parties fails to comply with requests for tax information, or fails to respond to requests for waivers or consents for tax information disclosure, or fails to respond to requests to obtain waivers or consents from Substantial Owners or Controlling Persons, the Lender may take, and may instruct members of the HSBC Group to take whatever actions are necessary to comply with the Lender's local or foreign tax reporting obligations, including without limitation any of the following action:

(a)  the Lender may withhold taxes that may be due from certain payments made to or on behalf of any one of the Borrower and/or the other Security Parties; and/or

(b)  The Lender shall have the right to pay relevant taxes to the appropriate Tax Authority; and/or

(c)  The Lender shall have the right to refuse to provide certain services to any one of the Borrower and/or the other Security Parties; and/or

(d)  the Lender shall have the right to close any account to which the provision of any facility may relate; and

	20.37	to ensure and procure that at all times during the Security Period, the Borrower and/or the Guarantor shall maintain with the Piraeus branch of the Lender, or, subject to the prior written consent of the Lender, at any other branch of the Lender to the credit of any account held with the Lender in the name of the Borrower and/or the Guarantor, minimum deposits amounting in aggregate to at least Dollars Five hundred thousand ($500,000) (which amount for the avoidance of doubt shall include the amount required by Clause 20.38.03 hereof), free of any Encumbrances in relation to this Ship;

	20.38	to (and procure that the Guarantor will) ensure that throughout the Security Period:

	20.38.01	the Market Value Adjusted Net Worth of the Guarantor shall not be less than Fifteen million Dollars ($15,000,000);

	20.38.02	the Leverage Ratio of the Guarantor will not be higher than 0.75:1; and

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	20.38.03	on a consolidated basis, at all times, the aggregate amount of cash deposits held in accounts of members of the Group (including the Guarantor) free from any Encumbrances shall not be less than Three hundred thousand Dollars ($300,000) per Fleet Vessel;

	21	INSURANCE UNDERTAKINGS

The Borrower hereby undertakes with the Lender that during the Security Period (at the expense of the Borrower and upon such terms, in such amounts and with such Insurers as shall from time to time be approved in writing by the Lender), the Borrower shall comply with the following provisions of this Clause 21 at all times during the Security Period, except as the Lender may otherwise permit in writing:

	21.01	to insure and keep insured the Ship in Dollars or such other currency as may be approved in writing by the Lender, in the full insurable value of the Ship but in no event for an amount less than the higher of (i) the Market Value of the Ship and (ii) one hundred and twenty five per cent (125%) of the aggregate of (a) the Facility and (b) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure against fire and usual marine (including Excess Risks) and War Risks covered by hull and machinery policies;

	21.02	to enter the Ship in the name of the Borrower, for her full value and tonnage in a protection and indemnity association approved by the Lender with unlimited liability if available otherwise for the highest possible standard cover for the time being $1,000,000,000 for oil pollution and for excess oil spillage and pollution liability insurance for the highest possible standard cover against all Protection and Indemnity Risks;

	21.03	to pay to the Lender on demand all premiums or other amounts payable by the Lender in effecting a Mortgagees' Interest Insurance policy ("MII") and a mortgagee's interest (additional perils) insurance policy in the name of the Lender for a minimum insured amount of not less than one hundred and ten per cent (110%) of (a) the Facility and (b) (in case the Master Agreement is utilized) the Maximum Permitted Swap Exposure and under such wording and conditions acceptable to the Lender;

	21.04	if the Ship enters the territorial waters of the United States of America (or other jurisdiction having legislation similar to the US Oil Pollution Act 1990) for any reason whatsoever, to take out such additional insurance to cover such risks as may be necessary in order to obtain a Certificate of Financial Responsibility from the United States Coastguard;

	21.05	upon the Lender's request, to effect loss of hire and/or Earnings Insurance on the Ship (as may be required by the Lender) in respect of charterparties which exceed twelve (12) months duration and otherwise on such terms and in such amounts as the Lender may instruct the Borrower as being necessary or appropriate;

	21.06	to effect such additional Insurances as may reasonably be requested by the Lender to maintain the scope of the existing cover of the Insurances;

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	21.07	to renew the Insurances at least fourteen (14) days before the relevant Insurances expire and to procure that the Approved Brokers shall promptly confirm in writing to the Lender as and when each such renewal is effected;

	21.08	to punctually pay all premiums, calls, contributions or other sums payable in respect of the Insurances and to produce all relevant receipts when so required in writing by the Lender;

	21.09	to arrange for the execution of such guarantees as may from time to time be required by any Protection and Indemnity or War Risks association;

	21.10	to give notice of assignment of the Insurances to the Insurers in the form set out in Schedule 2 to the General Assignment and to procure that a copy of the notice of assignment shall be endorsed upon or attached to the relevant Insurance Documents;

	21.11	to procure that the Insurance Documents shall be deposited with the Approved Brokers and that such brokers shall provide the Lender with certified copies thereof and shall issue to the Lender a letter or letters of undertaking in such form as the Lender shall reasonably require;

	21.12	to procure that the Protection and Indemnity and/or War Risks associations in which the Ship is entered shall provide the Lender with a letter or letters of undertaking in their standard form and shall provide the Lender with a copy of the certificates of entry;

	21.13	to procure that the Insurance Documents (including all certificates of entry in any Protection and Indemnity and/or War Risks association) shall contain loss payable clauses in the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to the General Assignment;

	21.14	to procure that the Insurance Documents shall provide that the lien or set off for unpaid premiums or calls shall be limited to only the premiums or calls due in relation to the Insurances on the Ship and for fourteen (14) days prior written notice to be given to the Lender by the Insurers (such notice to be given even if the Insurers have not received an appropriate enquiry from the Lender) in the event of cancellation or termination of Insurances and in the event of the non-payment of the premium or calls, the right to pay the said premium or calls within a reasonable time;

	21.15	to promptly provide the Lender with full information regarding any Major Casualty or any casualties or damage to the Ship in consequence whereof such Ship has become or may become a Total Loss;

	21.16	to promptly provide the Lender, at the Borrower's cost, with a detailed report issued by a firm of marine insurance brokers or consultants appointed by the Lender in relation to the Insurances, as and when the Lender may reasonably request;

	21.17	not to do any act nor voluntarily suffer nor permit any act to be done whereby any Insurance shall or may be suspended or avoided and not to suffer nor permit the Ship to engage in any voyage nor to carry any cargo not permitted under the Insurances in

57

effect without first covering such Ship to the amount herein provided for with additional insurance reasonably satisfactory to the Lender for such voyage or the carriage of such cargo;

	21.18	(without limitation to the generality of the foregoing) in particular not permit the Ship to enter or trade to any zone which is declared a war zone by any Government or by the Ship's War Risks Insurers unless there shall have been effected by the Borrower and at its expense such special insurance as the War Risk Insurers may require; and

	21.19	to procure that all amounts payable under the Insurances are paid in accordance with the loss payable clause in the form set out in Schedule 3 or Schedule 4 (as may be appropriate) to the General Assignment and to apply and procure that all amounts as are paid to the Borrower are applied to the repair of the damage and the reparation of the loss in respect of which the said amounts shall have been received; and

	21.20	should the Ship be laid up for any period, to arrange 'lay-up' Insurances for the Ship during such period, at its own cost and upon such terms and conditions, in such amounts and with such Insurers as shall from time to time be approved in writing by the Lender.

	22	OPERATIONAL UNDERTAKINGS

The Borrower hereby further undertakes with the Lender to comply with the following provisions of this Clause 22 at all relevant times during the Security Period except as the Lender may otherwise previously permit in writing:

	22.01	to ensure that the Ship shall be kept registered as a Liberian flag ship at the port of Monrovia, Liberia, (or under such other flag as may be acceptable to the Lender in its reasonable discretion) and not to do or suffer to be done anything whereby such registration may be forfeited or imperilled;

	22.02	to ensure that all the Earnings of the Ship are paid into the Earnings Account;

	22.03	to pay as and when due and payable, all taxes, assessments, levies, governmental charges, fines and penalties lawfully imposed on and enforceable against the Ship;

	22.04	to ensure that the Ship (or any share thereof or interest therein) shall not be sold transferred, mortgaged, charged, hypothecated or abandoned (save in the case of maritime necessity) and that neither the Insurances nor the Earnings of the Ship or any Requisition Compensation will be assigned otherwise than in favour of the Lender;

	22.05	to ensure that the Ship shall neither be employed and/or operated in a manner contrary to any law or regulation in any relevant jurisdiction including without limitation to the ISM Code and the ISPS Code and all Sanctions and neither Borrower nor the Manager will engage in any unlawful trade or carry any cargo that may expose the Ship to penalty, forfeiture or capture and in the event of hostilities in any part of the world (whether a war be declared or not) nor employ the Ship or voluntarily suffer her employment in carrying any contraband goods;

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	22.06	not to create or permit to be created or continued any lien or Encumbrance(s) on the Ship and/or the Insurances and/or the Earnings and/or any Requisition Compensation (other than Permitted Liens) and to satisfy all claims and demands which if unpaid might in law or by statute or otherwise create a lien or Encumbrance(s) and (without prejudice to the generality of the foregoing) to procure that no lien or Encumbrance(s) is created or permitted to be created or continued on the Ship for any reason whatsoever;

	22.07	on the request of the Lender, to provide to and procure that the Lender shall be provided with satisfactory evidence that the wages, allotments, insurance and pension contributions of the Master and crew of the Ship are being paid in accordance with the relevant agreements relating to the Ship and the relevant regulations, and that all deductions from the remuneration of the Master and crew in respect of any tax liability (including all social insurance contributions) are being made and accounted for to the relevant authority and that the Master of the Ship has no claim for disbursements other than those properly incurred by him in the ordinary trading of the Ship on the voyage then in progress;

	22.08	if any writ or proceedings are issued against the Ship or if the Ship shall be otherwise attached, arrested or detained by any proceeding in any court or tribunal or by any government or other authority, the Borrower shall immediately notify and procure that the Lender shall be notified thereof by telefax confirmed by letter and to cause the Ship to be released and all liens or Encumbrance(s) (except for the Mortgage and any Permitted Liens on the Ship) thereon to be discharged forthwith;

	22.09	(save for the Approved Charter) not to voyage or time charter the Ship or place her under any contract for employment for any period which when aggregated with any optional periods of extension contained in the said charter or contract, would exceed twelve (12) months duration, provided however that in the event of the Ship being employed (with the Lender's prior written consent) under any charter which when aggregated with any optional periods contained in such charter would exceed twelve (12) months duration, the Lender shall be furnished forthwith with (a) details and documentary evidence satisfactory to the Lender in its sole discretion in respect of the new employment, (b) upon Lender's request, a specific assignment in favour of the Lender of the benefit of such charter together with a notice of any such assignment addressed to the relevant charterer and endorsed with an acknowledgement of receipt by the relevant charterer all in form and substance satisfactory to the Lender and (c) upon Lender's request, a specific agreement of subordination of the rights of such charterer to the rights of the Lender;

	22.10	not to demise charter the Ship for any period whatsoever;

	22.11	not to deliver the Ship into the possession of any person or persons for effecting repairs or renewals to the Ship the cost of which will exceed the amount of Seven hundred thousand Dollars ($700,000) unless such person or persons shall have given a written undertaking to the Lender not to exercise any lien or right of detention on the Ship in respect of the cost of such repairs or renewals;

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	22.12	at all times and at the Borrower's own expense, to maintain the Ship in a seaworthy condition and in good running order and repair in accordance with first class ship ownership and ship management practice and to keep and procure that the Ship is kept in such condition as will entitle her to the highest classification status with the Classification Society free from recommendations and notations which have not been complied with in accordance with their terms and to procure that, upon the Lender's request, the Lender is provided with a certificate issued by the Classification Society that such classification status is maintained and with copies of all other classification certificates as the Lender may request in writing;

	22.13	to submit the Ship regularly to such periodical or other surveys as may be required for classification purposes and, if so required by the Lender in writing, supply and procure that the Lender is supplied with copies of all survey reports issued in respect thereof;

	22.14	to notify and procure that the Lender is notified immediately by facsimile of any recommendation or requirement imposed on the Ship by the Classification Society, the Insurers or by any other competent authority that is not complied with in accordance with its terms;

	22.15	to give to the Lender reasonable prior notice of any proposed dry docking or any underwater survey of the Ship so that the Lender (if it so desires) can arrange for a representative to be present;

	22.16	to authorise and procure that the Classification Society and all other regulatory authorities of the Ship are authorised to disclose to the Lender any information or documents requested by the Lender relating to the classification, repair, maintenance or seaworthiness of the Ship;

	22.17	to comply with all legal requirements whether imposed by enactment, regulation, common law or otherwise and to have on board the Ship as and when legally required valid certificates showing compliance therewith;

	22.18	without prejudice to Clause 22.17, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or trade or which may otherwise be applicable to the Ship or the Borrower and, if the Lender shall so require, the Borrower shall enter into a "Carrier Initiative Agreement" with the United States Customs Service and to procure that such agreement (or any similar agreement hereafter introduced by any agency of the United States of America) is maintained by the Borrower in full force and effect;

	22.19	to comply with and to ensure and procure that the Manager and all servants and agents of the Borrower and the Manager or any charterer of the Ship shall comply with, the ISM Code, the ISM Code Documentation, the ISPS Code, the ISPS Code Documentation, all Sanctions, all Environmental Laws and all legislation of any state or government in relation to the Ship, her ownership, operation and management or to the business of the Borrower and the Manager, including, without limitation, requirements

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relating to manning, submission of oil spill response plans, designation of qualified individuals and establishing financial responsibility;

	22.20	to hold and procure that the Manager shall hold all appropriate ISM Documentation and to provide the Lender with copies of the relevant ISM Code Documentation and ISPS Code Documentation duly issued to the Borrower, the Manager and the Ship pursuant to the ISM Code and the ISPS Code;

	22.21	to keep, or procure that it is kept, on board the Ship a copy of all relevant ISM Code Documentation and ISPS Code Documentation respectively;

	22.22	to perform and discharge all duties and liabilities imposed on the Borrower under any charter, bill of lading or other contract relating to the Ship;

	22.23	not to remove or permit the removal of any part of the Ship or any equipment belonging thereto, nor make or permit to be made any alteration in the structure type or speed of the Ship which materially reduces the value of the Ship (unless such removal or alteration is required by statute or by her Classification Society);

	22.24	at all reasonable times and on reasonable notice, to permit and procure that the Lender or its authorised representative is permitted full and complete access to the Ship for the purpose of inspecting the state and condition of the Ship and her cargo and papers and at the written request of the Lender deliver and procure the delivery for inspection copies of any and all contracts and documents relating to the Ship whether on board or not;

	22.25	to keep and procure that the Lender is kept fully informed as to the use, the employment and the position of the Ship and promptly provide and procure that the Lender is provided with information concerning the classification, status and insurance of the Ship from time to time as and when so required in writing by the Lender;

	22.26	when so requested by the Lender, to appoint and procure that two firms of independent sale and purchase shipbrokers shall be appointed, as nominated or approved by the Lender, to give valuations of the Ship in Dollars, such valuations to be made without physical inspection (unless otherwise required by the Lender) and on the basis of an arm's-length transaction by a willing buyer from a willing seller and where the Ship is subject to a charter, with or without taking into account such charter (whichever results to a lower value of the Ship); The average of the aforesaid two valuations shall constitute the Market Value of the Ship. In case the difference between the said two valuations is more than ten per cent (10%), a third firm of independent sale and purchase shipbrokers, nominated or approved by the Lender, will be appointed and the average of all three such valuations shall constitute the Market Value of the Ship. The fees of the shipbrokers appointed to give such valuations shall be paid by the Borrower;

	22.27	in the event of Compulsory Acquisition of the Ship by any Government Entity, to execute and procure the execution of any assignment that the Lender may request in relation to any and all amounts which such Government Entity shall be liable to pay as

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compensation for the Ship or for her use and if received by the Borrower to pay and procure the payment of such amounts immediately to the Lender,

	22.28	to maintain the appointment of the Manager as manager of the Ship and not to vary in any material respect or terminate this appointment;

	22.29	to execute and procure the execution by each other Security Party of any further document or documents required by the Lender in order to perfect or complete the security created by the Finance Documents;

	22.30	to execute and deliver to the Lender such documents of transfer as the Lender may require in the event of sale of the Ship pursuant to any power of sale contained in the Mortgage or which the Lender may have in law;

	22.31	to immediately notify the Lender by fax, confirmed forthwith by letter, of:

(i)            any casualty in respect of the Ship which is or is likely to be or to become a Major Casualty;

(ii)            any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(iii)            any requirement or recommendation made by any insurer or classification society or by any competent authority in respect of the Ship which is not complied with in accordance with its terms;

(iv)            any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or her Earnings or her Insurances or any requisition of the Ship for hire;

(v)            any Environmental Claim made against the Borrower or the Manager or in connection with the Ship or any Environmental Incident in respect thereof;

(vi)            any claim for breach of the ISM Code or the ISPS Code being made against a Borrower and/or the Manager or otherwise in connection with the Ship; or

(vii)            any other matter, event or incident, actual or threatened the effect of which will or could lead to the ISM Code or the ISPS Code or the Sanctions not being complied with;

and advise and procure that the Lender shall be advised in writing on a regular basis and in such detail as the Lender shall require of the Borrower's or any other person's response to any of those events or matters;

	22.32	to keep prominently in the Chart Room and in the Master's cabin of the Ship a framed duly completed notice printed in plain type of such size that the area of print shall cover a space not less than six inches wide and nine inches high reading as follows:

"NOTICE OF MORTGAGE

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This Ship is owned by [..] of Liberia and is subject to a first priority/preferred Mortgage [and a deed of covenant collateral thereto - as the case may be] in favour of HSBC BANK PLC; under the terms of the said Mortgage, a certified copy of which is preserved with the Ship's papers, neither the owners nor the Captain nor any officer or agent nor any charterer of this Ship nor any other person whatsoever has any power, right or authority whatever to create, incur or permit the imposition on this Ship any commitments or encumbrances except for crews' wages accrued for not more than three (3) months or salvage."; and

	22.33	to comply with its respective obligations under each Subject Document and not to (and ensure and procure that no other party thereto will) vary, amend or terminate any of the aforesaid documents.

	23	SECURITY MARGIN

	23.01	In the event that at any time during the Security Period the Security Value is less than the Security Requirement, then the Borrower shall within thirty (30) Banking Days of receipt of a written notice from the Lender advising the Borrower of the amount of such deficiency (which notice in the absence of manifest error shall be conclusive) either provide to the Lender additional security (valued in accordance with normal banking practice) which shall in all respects be acceptable and satisfactory to the Lender in its sole discretion and which in the opinion of the Lender shall be equal to the shortfall or prepay in accordance with Clause 10 such part (at least) of the Facility that in the opinion of the Lender is required in order to eliminate the shortfall.

	24	EVENTS OF DEFAULT

	24.01	If:

	24.01.01	the Borrower fails to pay on the due date for payment any amount which shall have become due hereunder and/or under the other Finance Documents;

	24.01.02	any representation, warranty or statement made by the Borrower in this Agreement and/or in any of the other Finance Documents or any certificate, statement or opinion delivered or made hereunder or under the other Finance Documents or in connection herewith or with the other Finance Documents shall be incorrect or inaccurate when made;

	24.01.03	the Borrower fails to duly and punctually perform or observe any other term of this Agreement or of the other Finance Documents and in any such case such failure, if capable of remedy, shall continue for fourteen (14) Banking Days after the Lender shall have given to the Borrower written notice of such failure;

	24.01.04	any other Financial Indebtedness of the Borrower exceeding in aggregate One million Dollars ($1,000,000) becomes due and payable or, with the giving of notice or lapse of time or any other condition or a combination thereof, capable of being declared due and payable prior to its stated maturity by reason of any circumstance

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entitling the creditor(s) thereof to declare such indebtedness due and payable and such indebtedness is not paid within fourteen (14) Banking Days therefrom;

	24.01.05	the Borrower enters into voluntary or involuntary bankruptcy, liquidation or dissolution, or becomes insolvent, or an administrator, administrative receiver, receiver or liquidator is appointed on all or a material part of its undertaking or assets or proceedings are commenced by or against it under any reorganisation, arrangement, readjustment of debts, dissolution or liquidation law or regulation, or if any event shall occur which, under the relevant system of law, shall have an equivalent effect;

	24.01.06	the Borrower ceases or threatens to cease to carry on the whole or a substantial part of its business;

	24.01.07	there shall be a transfer or disposal of all or a substantial part of the assets of the Borrower, whether by one or a series of transactions, related or not, without the prior written consent of the Lender;

	24.01.08	any event occurs having a Material Adverse Effect on the Borrower;

	24.01.09	the value of the assets of the Borrower is less than its respective liabilities (taking into account contingent and prospective liabilities);

	24.01.10	the Borrower reduces its authorised or issued or subscribed capital;

	24.01.11	any governmental or other consent, licence or authority required to make any one of this Agreement and/or the other Finance Documents legal, valid, binding, enforceable and admissible in evidence or required to enable the Borrower to perform its duties and discharge its liabilities hereunder or under any one or more of the other Finance Documents is withdrawn or ceases to be in full force and effect unless the Borrower procures that such consent, licence or authority is reinstated or re-issued to the satisfaction of the Lender within fourteen (14) Banking Days of the said withdrawal or cessation;

	24.01.12	any distress or execution is levied or enforced against a material (in the opinion of the Lender) part of the property and assets of the Borrower and such distress or execution is not withdrawn or discharged within fourteen (14) Banking Days;

	24.01.13	the Borrower stops payment of, or is unable to, or admits inability to pay its debts as they fall due, or enters into any composition or other arrangement with its creditors generally or declares a general moratorium on the payment of indebtedness;

	24.01.14	the Borrower becomes a Prohibited Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Prohibited Person or the Borrower becomes the owner or controller of a Prohibited Person;

	24.01.15	any proceeds of the Facility are made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise is, directly or indirect! applied in a manner or for a purpose prohibited by Sanctions;

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	24.01.16	the Borrower becomes a FATCA FFI or a US Tax Obligor;

	24.01.17	the Borrower is not in compliance, in all respects, with all Sanctions;

	24.01.18	any of the events referred to in Clauses 24.01.01 up to and inclusive 24.01.17 occurs, mutatis mutandis, in respect of any other Security Party or any other member of the Group;

	24.01.19	without limiting the generality of Clause 24.01.03, the Borrower is in breach of the provisions of Clause 20.37 and/or Clause 20.38 and/or Clause 23;

	24.01.20	if (a) an Event of Default or a Potential Event of Default (in each case as defined in the Master Agreement) has occurred and is continuing under the Master Agreement or (b) an Early Termination Date (as defined in the Master Agreement) has occurred or been or become capable of being effectively designated under the Master Agreement or (c) a person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv) of the Master Agreement or (d) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason;

	24.01.21	the Borrower and/or any other Security Party fails to comply within thirty (30) days from the Lender's written notice to the Borrower to that effect, to the full satisfaction of the Lender, with any requirements of the Lender in relation to the shares of the Borrower and the Manager and/or of their corporate shareholder(s) [including but without limitation any requirements of the Lender as to the approved form of the shares (registered or otherwise) of the Borrower and the Manager and/or of their corporate shareholder(s);

	24.01.22	there is a change in the management or the legal ownership of a Borrower and/or the Manager or of any of their corporate shareholder(s) without the prior written consent of the Lender;

	24.01.23	the Borrower sells, transfers, disposes of or (other than by Permitted Liens) encumbers the Ship or any interest or share therein, or agrees to do so without the prior written consent of the Lender;

	24.01.24	the Ship is arrested or detained and such arrest or detention is not released within twenty five (25) days, or an order for the sale of the Ship is made by a court of competent jurisdiction or the Borrower ceases to retain possession and/or control of the Ship for a period in excess of twenty five (25) days;

	24.01.25	the Ship becomes a Total Loss and the Borrower fails to make the payment required to be made under Clause 10.01 in respect of such Total Loss within the time set forth in Clause 10.02.02;

	24.01.26	the Ship is laid up for a period exceeding thirty (30) days without the prior written consent of the Lender;

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	24.01.27	the country of registration of the Ship becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion considers that, as a result, the security conferred by any of the Finance Documents is materially prejudiced;

	24.01.28	an Event of Default under any one of the Subject Documents (as defined therein) occurs;

	24.01.29	the Subject Documents or any of them is terminated, revoked, cancelled, or otherwise ceases, in whole or in part, to be valid, binding and enforceable;

	24.01.30	any Security Party repudiates or evidences an intention to repudiate any one or more of the Subject Documents;

	24.01.31	the Guarantor ceases to be actively involved in the business of the Borrower and/or the Manager;

	24.01.32	the fulfilment of any one or more of the obligations covenants and undertakings contained in any one or more of this Agreement, the other Finance Documents and any other documents executed pursuant hereto or thereto or the exercise of any of the rights vested in the Lender hereunder or thereunder becoming either unlawful under any applicable law or unauthorised by any authority having jurisdiction or otherwise impossible;

	24.02	Upon the occurrence of an Event of Default which is continuing and at any time thereafter the Lender:

	24.02.01	may by written notice to the Borrower declare that any undrawn part of the Facility shall be cancelled, whereupon the same shall be cancelled;

	24.02.02	may by written notice to the Borrower declare the Indebtedness immediately due and payable whereupon the same shall become so payable to the Lender;

	24.02.03	take any other action, exercise any other right or pursue any other remedy conferred upon the Lender by this Agreement and/or the other Finance Documents or by any applicable law or regulation or otherwise as a consequence of such Event of Default;

	24.02.04	shall be entitled but not obliged to, exercise all its rights under the Master Agreement and to, inter alia, cancel, net out, unwind, terminate or liquidate all or any part of the rights, benefits and obligations created by any Designated Transaction and/or the Master Agreement. Without prejudice to or limitation of the obligations of the Borrower hereunder and under the Master Agreement, in the event that the Lender exercises any of its rights hereunder and such exercise results in all or part of a Designated Transaction being terminated, such termination shall constitute a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be entitled to recover from the Borrower

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a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement.

	24.03	All Proceeds received by the Lender under or pursuant to any of the Finance Documents after the happening of any Event of Default shall be applied by the Lender in payment of the Indebtedness in accordance with the terms of Clause 12.

	24.04	On the occurrence of an Event of Default which is continuing the Lender shall have the right and power to order the Ship to proceed forthwith at the Borrower's risk and expense to a port or place nominated by the Lender. The Borrower undertakes to give the necessary instructions to the Master of the Ship to comply with any such order of the Lender and if the Borrower fails to give such instructions for any reason whatsoever the Lender shall have the right and power to give such instructions direct to the Master.

	25	SET-OFF

	25.01	The Borrower hereby authorises the Lender, without prejudice and in addition to all rights of set off, combination, lien or otherwise which the Lender has at law or under any agreement between the Lender and the Borrower, at any time following the occurrence of an Event of Default which is continuing without demand and without notice:

	25.01.01	to set off any amount to the credit of any existing accounts of the Borrower with the Lender, (whether deposit, loan or otherwise, in the name of the Borrower or otherwise) including, without limitation, the Accounts, in or towards satisfaction of all amounts due from the Borrower under this Agreement and/or any one or more of the other Finance Documents; and

	25.01.02	to transfer and apply any amount standing to the credit of any such existing accounts of the Borrower with any associate or subsidiary of the Lender in or towards satisfaction of all amounts due from the Borrower under this Agreement and/or any one or more of the other Finance Documents.

	25.02	For that purpose the Lender has the power, without limitation, to:

	25.02.01	break, or alter the maturity of, all or any part of a deposit of the Borrower; and/or

	25.02.02	enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate.

	25.03	Without prejudice to its rights hereunder and/or under the Master Agreement, the Lender may at the same time as, or at any time after, an Event of Default or a Potential Event of Default occurs under this Agreement or the Borrower's default under the Master Agreement, set-off any amount due now or in the future from the Borrower to the Lender under this Agreement against any amount due from the Lender to the Borrower under the Master Agreement and apply the first amount in discharging the second amount. The effect of any set-off under this Clause 25.03 shall be effective to

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extinguish or, as the case may require, reduce the liabilities of the Lender under the Master Agreement.

	25.04	Where such set-off or transfer requires the conversion of one currency into another, such conversion shall be calculated at the spot rate as conclusively determined by the Lender for purchasing such currency with the currency in which the relevant amounts are denominated on the date of actual payment.

	26	FEES

	26.01	The Borrower shall pay to the Lender an availability fee of one per cent per annum (1%) on the from time to time available and undrawn amount of the Facility (the "Availability Fee"); such Availability Fee for the Facility shall accrue from day to day for a period starting on the date of signing of this Agreement and ending on the earlier of (i) the Drawdown Date of the Facility and (ii) on the Termination Date and shall be calculated upon the exact number of days which have elapsed on the basis of a year consisting of three hundred and sixty (360) days and shall be payable quarterly in arrears.

	26.02	The Borrower shall pay to the Lender an arrangement fee of zero point eighty per cent (0.80%) of the final amount to be drawn down, of which, approximately twenty five per cent (25%) thereof i.e. US Dollars Thirty Nine thousand Nine hundred (US$39,900) has been paid by the Borrower on the 19 December 2014 and the remaining seventy five per cent (75%) thereof will be paid to the Lender simultaneously with the Drawdown of the Facility on the Drawdown Date.

	27	EARNINGS AND RETENTION ACCOUNTS

	27.01	The Borrower hereby agrees to ensure and procure that all the Earnings of the Ship, shall be paid into the Earnings Account, which shall be charged in favour of the Lender by the Earnings Account Charge. Unless and until an Event of Default or a Potential Event of Default occurs, whereupon the Lender may give notice to the Borrower that it requires that all Earnings of the Ship are paid directly to the Lender, all amounts in the Earnings Account shall be applied as follows:

	27.01.01	first, towards the payment of fees and costs that are due and payable by the Borrower to the Lender under the Finance Documents;

	27.01.02	second, (in case the Retention Account provided for in Clause 27.02 has been opened) towards payment to the Retention Account of the amounts that may be required to be transferred to the credit thereof in accordance with Clause 27.02; and

	27.01.03	third, any balance thereafter remaining in the Earnings Accounts shall be available to the Borrower for the payment of the Operating Expenses of the Ship as well as for the payment of dividends and the repayment of any shareholders' loans.

	27.02	Within fifteen (15) days from the written notice of the Lender to the Borrower to that effect, the Borrower shall open the Retention Account with the Lender, which shall be charged in favour of the Lender by the Retention Account Charge. date falling

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thirty (30) days from the immediately preceding (as from the written notice of the Lender referred to in this Clause 27.02) Repayment Instalment and on the same date in each consecutive following calendar month (provided that if such day is not a Banking Day, the next following Banking Day) the Lender will transfer from the Earnings Accounts to the Retention Account an amount equal to one third (1/3rd) of each Repayment Instalment payable on the next Repayment Date thereof and the relevant monthly fraction of the interest in respect thereof due on the relevant next Interest Payment Date; PROVIDED HOWEVER THAT, without prejudice to the provisions of Clause 35, the Lender will be entitled not to exercise the right conferred on the Lender under this Clause 27.02, :or as long as the Lender thinks fit, at the Lender's sole and absolute discretion.

	27.03	The Lender shall pay interest to the Borrower on the credit balances from time to time in the Retention Account at the rate, which it usually pays on equivalent amounts and in accordance with its usual practice.

	27.04	On each Repayment Date the Lender shall transfer from the Retention Account to the Loan Account(s) an amount equal to each relevant Repayment Instalment payable on that date and on each relevant Interest Payment Date the Lender shall transfer from the Retention Account to the Loan Account(s) an amount equal to the interest payable in respect thereof under Clause 7 on that date.

	27.05	In the event that there are insufficient funds in the Earnings Account to pay the amounts referred to in Clause 27.02 above the Borrower agrees to pay to the Lender an amount equal to the difference between the actual amount in the Earnings Account and the amount due under Clause 27.02 on the first Banking Day in such month.

	27.06	The Lender acknowledges that the Borrower shall, unless and until an Event of Default or a Potential Event of Default shall occur and the Lender shall direct to the contrary, be entitled from time to time, to require that moneys for the time being standing to the credit of the Accounts be transferred in such amounts and for such periods as the Borrower selects to fixed-term deposit accounts ("deposit accounts") opened in the name of the Borrower with the Lender.

	27.07	The Borrower shall not be entitled to withdraw moneys standing to the credit of the relevant Account which are the subject of a fixed term deposit until the expiry of the period of such deposit unless the Borrower shall, on withdrawing such moneys pay to the Lender on demand any loss or expense which the Lender shall certify that it has sustained or incurred as a result of such withdrawal being made prior to the expiry of the period of the relevant deposit and the Lender shall be entitled to debit the relevant Account for the amount so certified prior to such withdrawal being made. In the event that any moneys so deposited are to be applied pursuant to this Clause 27, the Borrower shall, on such application being made, pay to the Lender on demand any loss or expense which the Lender shall certify that it has sustained or incurred as a result of such application being made prior to the expiry of the period of the relevant deposit and the Lender shall be entitled to debit the relevant Account for the amount so certified prior to such application being made. Any deposit accounts shall, for all the purposes

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of the Finance Documents, be deemed to be sub-accounts of the relevant Account from which the moneys deposited in the deposit accounts were transferred and all references in the Finance Documents to such Account shall be deemed to include the deposit accounts deemed as aforesaid to be sub-accounts thereof.

	28	EXPENSES

	28.01	Whether or not the Facility or any part thereof, is actually drawn down the Borrower shall reimburse the Lender on demand for all costs, charges and expenses incurred by the Lender in connection with the preparation, negotiation and conclusion of this Agreement and the other Finance Documents including the fees and expenses of the Lender's legal advisers.

	28.02	The Borrower shall reimburse the Lender on demand for all charges and expenses (including legal fees) incurred by the Lender in or in connection with the exercise of the Lender's rights and powers under this Agreement and the other Finance Documents (including but not limited to the fees and charges of auditors, brokers, surveyors and lawyers instructed by the Lender) and with the actual, attempted or purported enforcement of, or preservation of rights under this Agreement and the other Finance Documents.

	29	INDEMNITY

	29.01	The Borrower hereunder undertakes and agrees to indemnify the Lender, upon the Lender's first demand, from and against any losses, costs or expenses (including legal expenses) which it incurs in consequence of any Event of Default including (but without limitation) all losses (including loss of profit for the then current Interest Period), premiums and penalties incurred or to be incurred in liquidating or redeploying deposits made by third parties or funds acquired or arranged to advance or maintain the Facility or any part thereof and any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea.

	30	ENVIRONMENTAL INDEMNITY

	30.01	The Borrower undertakes to indemnify the Lender against all damages, losses, liabilities, costs, expenses, penalties, fines or proceedings which may be incurred or paid by or imposed on the Lender directly or indirectly at any time (whether before or alter the Indebtedness has been repaid in full) pursuant to any Environmental Law or any other environmental legislation of any state or government which would not have been incurred or paid by or imposed on the Lender had it not entered into this Agreement and/or the other Finance Documents.

	31	CONFIDENTIALITY

In this Clause

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"Affiliate" means, in relation to any person, a subsidiary of that person, or a holding company of that person or any other subsidiary of that holding company; and

"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian

	31.01	The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 31.02 (Disclosure of Confidential Information) and Clause 31.03 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

	31.02	The Lender may disclose:

	31.02.01	to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as the Lender shall consider appropriate;

	31.02.02	to any person:

		(a)	to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

		(b)	with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

		(c)	appointed by the Lender or by a person to whom Clause 31.02.02(a) or 31.02.02(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;

		(d)	who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 31.02.02(a) or 31.02.02(b);

		(e)	to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

		(f)	to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

		(g)	who is a Party; or

		(h)	with the consent of the Borrower; and

	31.02.03	to any person appointed by the Lender or by a person to whom Clause 31.02.02(a) or 31.02.02(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such

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Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 31.02.03.

	31.03	Disclosure to numbering service providers

	31.03.01	The Lender may disclose to any national or international numbering service provider appointed by the Lender to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Security Parties the information to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

	31.03.02	The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

	32	LENDER'S BUSINESS

	32.01	No provision of this Agreement will:

	32.01.01	interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

	32.01.02	oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

	32.01.03	oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

	33	STAMP DUTIES - TAXES ETC

	33.01	The Borrower shall pay any and all stamp, registration and similar taxes and charges of whatsoever nature which may be payable or determined to be payable on, or in connection with, the execution, registration, notarisation, performance or enforcement of this Agreement or the other Finance Documents. The Borrower shall indemnify the Lender against any and all liabilities with respect to or resulting from any delay or omission on the part of the Borrower to pay any such taxes.

	34	DETERMINATIONS

	34.01	Each determination of an Interest Rate or a Default Rate or of any amount in respect of principal or interest or fees or expenses by the Lender in accordance with this Agreement and every other determination or certification by the Lender under this Agreement shall be conclusive and binding on the Borrower in the absence of manifest error.

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	35	NO WAIVER

	35.01	No failure to exercise and no delay on the part of the Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or power preclude any other or future exercise thereof or the exercise of any other right or power. The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers or remedies provided by law.

	36	PARTIAL INVALIDITY

	36.01	In the event that any term or condition of this Agreement is rendered or declared illegal, invalid or inoperative in whole or in part by any statute rule or regulation or any decision of any court or tribunal of competent jurisdiction then such determination or declaration shall neither affect the validity of any other term or condition of this Agreement which (save as aforesaid) will remain in full force and effect nor the legality, validity or enforceability of such term or condition under the laws of any other jurisdiction.

	37	TRANSFER AND ASSIGNMENT

	37.01	This Agreement shall bind and be to the benefit of the Borrower and the Lender and their respective successors and permitted assigns.

	37.02	The Borrower may not assign any of its rights, powers, duties or liabilities hereunder.

	37.03	The Lender may at any time and without the prior consent of the Borrower assign or transfer all or part of the Facility and its rights and powers under any one or more of this Agreement and the other Finance Documents to any other bank or other financial institution (the "Transferee Lender").

	37.04	The Lender may at any time and from time to time change its lending office in respect of the whole or any part of its participation in the Facility. The Lender shall notify the Borrower of any such change in the lending office as soon as is practicable.

	37.05	If the Lender assigns or transfers all or any part of its rights, powers duties and liabilities hereunder pursuant to Clause 37.03 the Borrower undertakes immediately on being requested to do so by the Lender to enter into and procure that the other parties to the Finance Documents shall enter into, such documents as may be necessary or desirable to transfer to the Transferee Lender all or part of the Lender's interest in the Finance Documents and all relevant references in this Agreement and the other Finance Documents to the Lender shall thereafter be construed as a reference to the Lender and/or its assignee or transferee (as the case may be) to the extent of their respective interests.

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	38	NON-IMMUNITY

	38.01	The Borrower does not have any right of immunity from set-off, suit or execution, attachment or other legal process under the laws of the United Kingdom or the Republic of Greece or the Republic of the Marshall Islands or the Republic of Liberia.

	38.02	The exercise by the Borrower of its rights and performance and discharge of its duties and liabilities hereunder will constitute commercial acts done and performed for private and commercial purposes.

	38.03	To the extent that the Borrower may in any jurisdiction in which proceedings may at any time be taken for the enforcement of this Agreement and/or any of the other Finance Documents claim for itself or its assets immunity from suit, judgment, execution, attachment (whether, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction there may be attributed to itself or its assets any such immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim and hereby irrevocably waives any such immunity to the full extent permitted by the laws of such jurisdiction.

	39	NOTICES

	39.01	Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

	39.02	A notice shall be sent:

	 	
(a)

	
to the Borrower:

	
c/o EUROBULK LTD

	 	 	 	
4, Messogiou & Evropis Street

	 	 	 	
151 24 Maroussi

	 	 	 	
Greece

	 	 	 	
Fax No.: +30 211 1804097

	 			
	 	
(b)

	
to the Lender:

	 
	 	 	 	
111 Messoghion Ave, 

Athens,

	 	 	 	
Greece, Tel: +30 210 6961457

	 	 	 	
Attn. Ms Katerina Eleftheriou.

or to such other address as the relevant party may notify the other in writing.

	39.03	Subject to Clauses 39.04 and 39.05:

(a)            a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

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(b)            a notice which is sent by fax shall be deemed to be served, and shall take effect, two (2) hours after its transmission is completed.

	39.04	However, if under Clause 39.03 a notice would be deemed to be served:

(a)            on a day which is not a Banking Day in the place of receipt; or

(b)            on such a Banking Day, but after 5 p.m. local time;

the notice shall (subject to Clause 39.05) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a Banking Day.

	39.05	Clauses 39.03 and 39.04 do not apply if the recipient of a notice notifies the sender within one (1) hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form, which is illegible in a material respect.

	39.06	A notice under or in connection with a Finance Document shall not be invalid by reason that the manner of serving it does not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice.

	39.07	Any notice under or in connection with a Finance Document shall be in English or in Greek.

	39.08	In this Clause "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

	40	SUPPLEMENTAL

	40.01	The rights and remedies which the Finance Documents give to the Lender are:

(a)            cumulative;

(b)            may be exercised as often as appears expedient; and

(c)            shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

	40.02	If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

	40.03	A Finance Document may be executed in any number of counterparts.

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

	40.05	This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrower or their representatives prior to the date of this Agreement, including without limitation, the Commitment Letter.

	41	LAW AND JURISDICTION

	41.01	This Agreement shall be governed by, and construed in accordance with, English law.

	41.02	Subject to Clause 41.03, the courts of England shall have exclusive jurisdiction to settle any disputes, which may arise out of or in connection with this Agreement.

	41.03	Clause 41.02 is for the exclusive benefit of the Lender, which reserves the right:

(a)            to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of the Republic of Greece and/or any country other than England or Greece and which have or claim jurisdiction to that matter; and

(b)            to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or Greece or without commencing proceedings in England or Greece.

The Borrower shall not commence any proceedings in any country other than England in relation to a matter, which arises out of or in connection with this Agreement.

	41.04	The Borrower irrevocably appoint Messrs. Hill Dickinson Service (London) Limited presently at lrongate House, Duke's Place, London EC3A 7LP England, Att. Mr. Patrick Hawkins, tel: +44 207 2839033 email: patrick.hawkins@hilldickinson.com to act as their agent to receive and accept on their behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.

	41.05	The Borrower irrevocably designate and appoint Mr. Alexandros Kapellaris, Advocate, with offices at 42, Panepistimiou Street, 106 79 Athens, Greece, as agent for the service of process in Greece ("antiklitos") and agree to consider any legal process or any demand or notice made served by or on behalf of the Lender on the said agent as being made to the Borrower. The designation of such an authorized agent (antiklitos) shall remain irrevocable until all indebtedness shall have been paid in full in accordance with the terms of this Agreement and the other Finance Documents.

	41.06	Nothing in this Clause 41 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

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	41.07	In this Clause 41, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure or enforcement court order (diatagi pliromis).

	42	THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS

	42.01	In case of any conflict between the provisions of this Agreement and any of the other Finance Documents the provisions of this Agreement shall prevail.

AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first above written.

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EXECUTION PAGE

	
SIGNED by

	
)

	
Mr. Gerassimos Mentoros

	
) /s/ Mr. Gerassimos Mentoros

	
for and on behalf of

	
)

	
HSBC BANK PLC

	
)

	
In the presence of: /s/ Christos Gourikis

	
)

	
SIGNED by

	
)

	
Ms Stephania Karmiri

	
) /s/ Ms Stephania Karmiri

	
for and on behalf of

	
)

	
ULTRA TWO SHIPPING LTD

	
)

	
in the presence of: /s/ Christos Gourikis

	
)

78

SCHEDULE 1

Notice of Drawdown

TO:            HSBC BANK PLC

.........

Date ......

Dear Sirs,

Financial Agreement dated ....... made between ......... and HSBC BANK PLC

	1.	We refer to the financial agreement dated .......... (the "Financial Agreement") and made between ourselves, as borrower and yourselves as lender, in connection with a loan facility of up to ..........

Terms defined in the Financial Agreement have their defined meanings when used in this Notice of Drawdown.

	2.	We request to borrow the Facility as follows:

		(a)	Amount: $ ............;

		(b)	Drawdown Date: .............;

		(c)	Duration of the first Interest Period shall be ............. months; and

		(d)	Payment instructions: ..............

	3.	We represent and warrant that:

		(a)	the representations and warranties in Clause 17 of the Financial Agreement and in the other Finance Documents would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;

		(b)	no Event of Default has occurred or will result from the borrowing of the Facility.

	4.	This notice cannot be revoked without your prior written consent of the Lender.

	5.	We authorise you to deduct from the proceeds of the Facility the amount of the fees referred to in Clause 26 and all the legal fees and disbursements payable pursuant to Clause 19.01.28.

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Yours faithfully,

For and on behalf of

.........

_________________________

..........................................

Attorney-in-Fact

80

SCHEDULE 2

Acknowledgement

Date: ........

Financial Agreement dated ............. made between ........... and HSBC Bank Pic (the "Financial Agreement")

We the undersigned Borrower declare that in connection with the above Financial Agreement we received the Facility in the amount of ............ Dollars ($.........) value ...........

Capitalized terms used herein shall have the respective meanings specified in the Financial Agreement.

Yours faithfully,

For and on behalf of

...............

_____________________________

.................................................

Attorney-in-Fact

SK 02558 0005 6500330

81

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