Document:

EXHIBIT 10.1

	
 

	

	
 

	
 

	
SAFE BULKERS, INC.

	
 

	
 

	
 

	
- and -

	
 

	
 

	
SAFETY MANAGEMENT OVERSEAS S.A.

	
 

	
 

	
 

	
MANAGEMENT AGREEMENT

	
 

	
 

	

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	

	
ARTICLE I

	
INTERPRETATION

	
1

	
ARTICLE II

	
APPOINTMENT

	
5

	
ARTICLE III

	
THE PARENT’S
 GENERAL OBLIGATIONS

	
6

	
ARTICLE IV

	
THE
 MANAGER’S GENERAL OBLIGATIONS

	
7

	
ARTICLE V

	
ADMINISTRATIVE
 SERVICES

	
9

	
ARTICLE VI

	
COMMERCIAL
 SERVICES

	
11

	
ARTICLE VII 

	
INSURANCE

	
12

	
ARTICLE VIII
 

	
AVAILABILITY OF OFFICERS

	
12

	
ARTICLE IX

	
MANAGEMENT
 FEES AND EXPENSES

	
13

	
ARTICLE X

	
BUDGETS,
 CORPORATE PLANNING AND EXPENSES

	
16

	
ARTICLE XI

	
LIABILITY
 AND INDEMNITY

	
18

	
ARTICLE XII 

	
RIGHTS OF
 THE MANAGER, RESTRICTIONS ON THE

	
 

	
 

	
MANAGER’S AUTHORITY, AND NON-COMPETE

	
 

	
 

	
PROVISIONS

	
19

	
ARTICLE XIII
 

	
TERMINATION OF THIS AGREEMENT

	
20

	
ARTICLE XIV 

	
CHANGE IN CONTROL OF THE MANAGER AND

	
 

	
 

	
RIGHT OF FIRST OFFER

	
23

	
ARTICLE XV 

	
NOTICES

	
24

	
ARTICLE XVI 

	
APPLICABLE LAW

	
25

	
ARTICLE XVII
 

	
ARBITRATION

	
25

	
ARTICLE
 XVIII 

	
MISCELLANEOUS

	
27

	
 

	
 

	
 

	
APPENDIX I

	
 

	
Form of
 Hajioannou Restrictive Covenant Agreement

	
APPENDIX II

	
 

	
Form of
 Other Restrictive Covenant Agreement

	
APPENDIX III

	
 

	
Form of
 Shipmanagement Agreement

	
APPENDIX IV

	
 

	
Form of
 Supervision Agreement

-i-

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

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

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

          WHEREAS:

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

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

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

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

ARTICLE I

INTERPRETATION

          SECTION
1.1. In this Agreement, unless the context otherwise requires: 

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

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

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

2

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

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

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

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

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

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

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

3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

APPOINTMENT

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

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

6

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

          SECTION
2.3. The Manager undertakes to use its best endeavors to provide: 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

ARTICLE III

THE PARENT’S GENERAL OBLIGATIONS

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

7

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

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

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

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

ARTICLE IV

THE MANAGER’S GENERAL OBLIGATIONS

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

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

          SECTION
4.3. The Manager acknowledges that the services it will provide pursuant to the
Shipmanagement Agreements and the Supervision Agreements are not 

8

limited to the
services described in such agreements and include those set forth in this
Agreement. 

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

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (b)
 the purchase or formation of subsidiaries; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

9 

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

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

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

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

ARTICLE V

ADMINISTRATIVE SERVICES

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

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

10 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

11 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

ARTICLE VI

COMMERCIAL SERVICES

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (b)
  at the request and under the direction of the Parent, providing
  administrative services in connection with the purchase of a second-hand
  vessel or the acquisition or sale of a Newbuild, in either case by any member
  of the Group, including, if specifically instructed by the Parent 

12 

	
 

	
 

	
 

	
 

	
in writing,
  signing any agreed form of memorandum of agreement, shipbuilding contract or
  other similar contract for and on behalf of the relevant member of the Group;
  and 

	
 

	
 

	
 

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

ARTICLE VII

INSURANCE

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

ARTICLE VIII

AVAILABILITY OF OFFICERS

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

          SECTION
8.2. The Executive Officers are entitled to direct the Manager to remove and
replace any individual made available to any member of the Group by the Manager
serving as an officer or any senior manager serving as head of a business unit,
in either case, of that member of the Group other than any Executive Officer,
from such position. The Board of Directors, in its sole discretion, shall be
entitled to direct the Manager to remove any individual made available to the
Parent by the Manager serving as an Executive Officer from such position and to
appoint such other individual to serve as 

13

successor as
the Board of Directors shall approve. Furthermore, the Manager agrees that it
will not remove any individual made available to any member of the Group by the
Manager serving as an officer or senior manager of that member of the Group
from his or her position without the consent of the Executive Officers and, in
the case of any Executive Officer, the Board of Directors. If any officer or
senior manager who is made available to the Parent by the Manager resigns, is
terminated or otherwise vacates his or her office, the Manager shall, as soon
as practicable after acceptance of any resignation or after termination, use
reasonable best efforts to identify suitable candidates for replacement of such
officer. 

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

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

ARTICLE IX

MANAGEMENT FEES AND EXPENSES

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

14 

	
 

	
 

	
 

	
Newbuilds”),
  bought or sold by the Parent or any Subsidiary, payable upon final delivery
  of such vessel to the relevant member of the Group or the relevant purchaser,
  as applicable; and 

	
 

	
 

	
 

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

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

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

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

15

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (f)
  postage, communication, traveling, victualling and other out of pocket
  expenses of the Manager and/or its personnel, incurred in 

16

	
 

	
 

	
 

	
providing
  the Services, save for any such expenses incurred by the Manager under a
  Supervision Agreement. 

ARTICLE X

BUDGETS, CORPORATE PLANNING AND EXPENSES

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

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

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

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

17 

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

          SECTION
10.6. The Manager shall produce a monthly comparison between budgeted and
actual expenditures to the Executive Officers. The Manager shall also maintain
the records of all costs and expenses incurred, including any invoices,
receipts and supplementary materials as are necessary or proper for the
settlement of accounts. 

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

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

18 

ARTICLE XI

LIABILITY AND INDEMNITY

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

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

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

          SECTION
11.4. It is hereby expressly agreed that no employee or agent of the Manager
(including any sub-contractor from time to time employed by the Manager) shall
in any circumstances whatsoever be under any liability whatsoever to any member
of the Group or any third party for any loss, damage or delay of whatsoever
kind arising or resulting directly or indirectly from any act, neglect or
default on his part while acting in the course of or in connection with his
employment and, without prejudice to the generality of the foregoing provisions
in this Article XI, every exemption, limitation, condition and liberty herein
contained and every right, exemption from liability, defense and immunity of
whatsoever nature applicable to the Manager or to which the Manager is entitled
hereunder shall also be available and shall extend to protect every such
employee 

19 

or agent of
the Manager acting as aforesaid, and for the purpose of all the foregoing
provisions of this Article XI, the Manager is or shall be deemed to be acting
as agent or trustee on behalf of and for the benefit of all Persons who are or
might be their servants or agents from time to time (including sub-contractors
as aforesaid) and all such Persons shall to this extent be or be deemed to be
parties to this Agreement. Nothing in this Section 11.4 shall be construed so
as to further limit any liability the Manager may have to the Group under
Section 11.2 hereof. 

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

ARTICLE XII

RIGHTS OF THE MANAGER, RESTRICTIONS ON THE MANAGER’S

AUTHORITY, AND NON-COMPETE PROVISIONS

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

          SECTION
12.2. The Parent acknowledges that the Manager shall have no responsibility
hereunder, direct or indirect, with regard to the formulation of the business
plans, policies, management or strategies (financial, tax, legal or otherwise)
of any member of the Group, which is solely the responsibility of each
respective member of the Group. Each member of the Group shall set its
corporate policies independently through its respective board of directors and
executive officers and nothing contained herein shall be construed to relieve
such directors or officers of each respective member of the Group from the
performance of their duties or to limit the exercise of their powers. 

          SECTION
12.3. Notwithstanding the other provisions of this Agreement: 

	
 

	
 

	
 

	
          (a)
 the Manager may act with respect to a member of the Group upon any advice,
 resolutions, requests, instructions, recommendations, direction or
 information obtained from such member of the Group or any banker, accountant,
 broker, lawyer or other Person acting as agent of or adviser to such member
 of the Group and the Manager shall incur no liability to such member of the
 Group for anything done or omitted or suffered in good faith in reliance upon
 such advice, instruction, resolution, recommendation, direction or
 information made or given by such member of the Group or its agents, in the absence
 of gross negligence or willful misconduct by the Manager or its servants, and
 

20 

	
 

	
 

	
 

	
shall not be
 responsible for any misconduct, mistake, oversight, error of judgment,
 neglect, default, omission, forgetfulness or want of prudence on the part of
 any such banker, accountant, broker, lawyer, agent or adviser or other Person
 as aforesaid; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

	
 

	
 

	
 

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

ARTICLE XIII

TERMINATION OF THIS AGREEMENT

          SECTION
13.1. This Agreement shall be effective as of the Effective Date and, subject
to Sections 13.2, 13.3, 13.4 and 13.5, shall continue until the date falling
two years after the Effective Date (the “Initial Term”). Thereafter the
term of this Agreement shall be extended on a year-to-year basis up to eight
times (each a “Subsequent Term”) unless the Parent, at least 12 months
prior to the end of the then current term, gives written notice to the Manager
that it wishes to terminate this Agreement at the end of the then 

21 

current term.
In no event will the term of this Agreement (the “Term”) extend beyond
the date falling 10 years after the Effective Date. 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

22

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

          SECTION
13.6. Upon termination, the Manager shall, as promptly as possible, submit a
final accounting of funds received and disbursed under this Agreement, any
Supervision Agreement and/or any Shipmanagement Agreement and of any remaining
Management Fees and/or any other funds due from the Parent or any other member
of the Group, calculated pro rata to the date of termination (except for those
amounts payable in 

23 

respect of the
three months following the termination date under Section 9.3, which shall be
payable by the Parent in accordance with that Section), and any non-disbursed
funds of any member of the Group in the Manager’s possession or control will be
paid by the Manager as directed by such member of the Group promptly upon the
Manager’s receipt of all sums then due it under this Agreement, any Supervision
Agreement and/or any Management Agreement, if any. 

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

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

ARTICLE XIV

CHANGE IN CONTROL OF THE MANAGER AND RIGHT OF
FIRST OFFER

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

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

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

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

	
 

	
 

	
 

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

24 

	
 

	
 

	
 

	
          (b)
 The Parent shall notify the Manager within 30 days after receiving a First
 Offer Notice (the “First Offer Period”) that either (i) the Parent
 does not wish to participate in a Proposed Change in Control of the Manager
 (a “Negative Response”) or (ii) the Parent does wish to participate in
 a Proposed Change in Control of the Manager, subject to the negotiation of
 the terms and conditions of the Proposed Change in Control of the Manager in
 accordance with the provisions of this Article XIV (an “Affirmative
 Response”). 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

ARTICLE XV 

NOTICES

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

25 

	
 

	
 

	
 

	
Safe
 Bulkers, Inc. 

	
 

	
32 Avenue K.
 Karamanli 

	
 

	
P.O. Box
 70837 

	
 

	
16605 Voula 

	
 

	
Athens,
 Greece 

	
 

	
 

	
 

	
Telefax: +30
 210 895 6900 

	
 

	
Attention:
 President 

	
 

	
 

	
 

	
Safety
 Management Overseas S.A. 

	
 

	
32 Avenue K.
 Karamanli 

	
 

	
P.O. Box
 70837 

	
 

	
16605 Voula 

	
 

	
Athens,
 Greece 

	
 

	
 

	
 

	
Telefax: +30
 210 895 6900 

	
 

	
Attention:
 Managing Director 

ARTICLE XVI

APPLICABLE LAW

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

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

ARTICLE XVII

ARBITRATION

          SECTION
17.1. All disputes arising out of this Agreement shall be arbitrated in London
in the following manner. One arbitrator is to be appointed by each of the
parties hereto and a third by the two so chosen. Their decision or that of any
two of them shall be final and, for the purpose of enforcing any award, this
Agreement may be made a rule of the court. The arbitrators shall be commercial
persons, conversant with shipping matters. Such arbitration is to be conducted
in accordance with the rules of the London Maritime Arbitration Association
terms current at the time when the arbitration proceedings are commenced and in
accordance with the Arbitration Act 1996 or any statutory modification or re-enactment
thereof. 

          SECTION
17.2. In the event that the a party hereto shall state a dispute and designate
an arbitrator in writing, the other party shall have 20 Business Days to
designate 

26 

its own
arbitrator. If such other party fails to designate its own arbitrator within
such period, the arbitrator appointed by the first party can render an award
hereunder. 

          SECTION
17.3. Until such time as the arbitrators finally close the hearings, either
party shall have the right by written notice served on the arbitrators and on
the other party to specify further disputes or differences under this Agreement
for hearing and determination. 

          SECTION
17.4. The arbitrators may grant any relief, and render an award, which they or
a majority of them deem just and equitable and within the scope of this
Agreement, including but not limited to the posting of security. Awards
pursuant to this Article XVII may include costs, including a reasonable
allowance for attorneys’ fees, and judgments may be entered upon any award made
herein in any court having jurisdiction. 

          SECTION
17.5. In the case of (i) any failure of the parties to agree on the Management
Fee for any Subsequent Term within 30 days prior to the commencement of that
Subsequent Term or (ii) any failure of the parties to agree upon the resolution
of any Questioned Items in a Draft Budget prior to the 20th of November of a
calendar year, the terms of this Section 17.5 shall be applicable.
Notwithstanding any contrary provisions of this Article XVII (but otherwise
subject to such provisions), the following “Baseball Arbitration” provisions
shall apply to the matters referred to in clauses (i) and (ii) above: 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (b)
 Each party shall propose an amount for each item in dispute that is subject
 to this Section 17.5, which shall be provided in writing to the arbitrators,
 together with any supporting documentation. Such proposed amounts may differ
 from the amounts proposed by the parties in their negotiations prior to
 triggering the implementation of this Section 17.5. The arbitrators may, but
 shall not be required to, accept oral testimony in addition to supporting
 documentation. 

	
 

	
 

	
 

	
          (c)
 Within 20 Business Days following the selection of the arbitrators hereunder,
 they shall, by majority vote, accept the proposal of one party or the other
 for each item that is the subject of arbitration pursuant to this Section
 17.5. 

	
 

	
 

	
 

	
          (d)
 Awards under this Section 17.5 shall not include costs, but may include
 interest if the payment date for any amount shall have passed. The fees and
 expenses of the arbitrators under this Section 17.5 

27 

	
 

	
 

	
 

	
shall be
 borne by the losing party (and may be apportioned by the arbitrators if more
 than one item is the subject of an arbitration). 

	
 

	
 

	
 

	
          (e)
 Awards under this Section 17.5 shall be final and binding on the parties. 

ARTICLE XVIII

MISCELLANEOUS

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

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

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

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

	
 

	
 

	
 

	
 

	
SAFE
 BULKERS, INC.

	
 

	
 

	
 

	
 

	
      by  

	
 

	
 

	
 

	

	
 

	
 

	
  Name:

	
 

	
 

	
  Title:

	
 

	
 

	
 

	
 

	
SAFETY
 MANAGEMENT OVERSEAS S.A.

	
 

	
 

	
 

	
 

	
      by  

	
 

	
 

	
 

	

	
 

	
 

	
  Name:

	
 

	
 

	
  Title:

[SIGNATURE PAGE TO MANAGEMENT
AGREEMENT] 

SCHEDULE A

SHIPOWNING SUBSIDIARIES

SCHEDULE B

NON-SHIPOWNING SUBSIDIARIES

SCHEDULE C

COMMISSION NEWBUILDS

SCHEDULE D

ITOCHU NEWBUILDS

APPENDIX I

FORM OF HAJIOANNOU RESTRICTIVE COVENANT
AGREEMENT

[TO BE ATTACHED]

APPENDIX II

FORM OF OTHER RESTRICTIVE COVENANT AGREEMENT

[TO BE ATTACHED]

APPENDIX III

FORM OF SHIPMANAGEMENT AGREEMENT

[TO BE ATTACHED]

A-A-1

APPENDIX IV

FORM OF SUPERVISION AGREEMENT

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

	
 

	
 

	
(1)

	
[name of relevant member of the Group],
  a company incorporated under the laws of [•], whose registered office is
  [ADDRESS] (the “Owner”); and

	
 

	
 

	
(2)

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

                    WHEREAS:

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

                    IT
IS NOW AGREED as follows:

ARTICLE I

DEFINITIONS

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

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

                    “Business
Day” means:

	
 

	
 

	
 

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

	
 

	
 

	
 

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

A-II-1

	
 

	
 

	
 

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

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

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

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

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

ARTICLE II

APPOINTMENT

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

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

A-II-2

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

A-II-3

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

ARTICLE III

CONSTRUCTION SUPERVISOR’S DUTIES

REGARDING CONSTRUCTION

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

	
 

	
 

	
 

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

A-II-4

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

A-II-5

ARTICLE IV 

CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

ARTICLE V

LIABILITY AND INDEMNITY

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

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

A-II-6

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

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

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

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

ARTICLE VI

FEES

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

A-II-7

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

	
 

	
 

	
(a)

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

	
 

	
 

	
(b)

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

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

ARTICLE VII

COMMENCEMENT - TERMINATION

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

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

                    SECTION
7.3. This Agreement shall terminate automatically if: 

	
 

	
 

	
(a)

	
the
  Shipbuilding Contract is cancelled, rescinded or terminated; or 

	
 

	
 

	
(b)

	
the Group
  Management Agreement is terminated. 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

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

A-II-8

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

ARTICLE VIII 

EMPLOYEES  

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

A-II-9

ARTICLE IX

GOVERNING LAW - ARBITRATION

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

                    SECTION
9.2. All disputes arising out of this Agreement shall be arbitrated in London
in the following manner. One arbitrator is to be appointed by each of the
parties hereto and a third by the two so chosen. Their decision or that of any
two of them shall be final and, for the purpose of enforcing any award, this
Agreement may be made a rule of the court. The arbitrators shall be commercial
persons, conversant with shipping matters. Such arbitration is to be conducted
in accordance with the rules of the London Maritime Arbitration Association
terms current at the time when the arbitration proceedings are commenced and in
accordance with the Arbitration Act 1996 or any statutory modification or
re-enactment thereof. 

                    SECTION
9.3. In the event that the a party hereto shall state a dispute and designate
an arbitrator in writing, the other party shall have 20 Business Days to
designate its own arbitrator. If such other party fails to designate its own
arbitrator within such period, the arbitrator appointed by the first party can
render an award hereunder. 

                    SECTION
9.4. Until such time as the arbitrators finally close the hearings, either
party shall have the right by written notice served on the arbitrators and on
the other party to specify further disputes or differences under this Agreement
for hearing and determination. 

                    SECTION
9.5. The arbitrators may grant any relief, and render an award, which they or a
majority of them deem just and equitable and within the scope of this
Agreement, including but not limited to the posting of security. Awards
pursuant to this Article IX may include costs, including a reasonable allowance
for attorneys’ fees, and judgments may be entered upon any award made herein in
any court having jurisdiction. 

ARTICLE X

COUNTERPARTS

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

ARTICLE XI

NOTICES

                    SECTION
11.1. Every notice or other communication under this Agreement shall: 

A-II-10

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (c)
  be sent:

	
 

	
 

	
 

	
 

	
(i)

	
to the
  Construction Supervisor at:

	
 

	
 

	
 

	
 

	
 

	
Safety
  Management Overseas S.A. 

  32 Avenue K. Karamanli 

  16673 Voula

  Athens, Greece

  Facsimile No.: +30 210[•]

  Attention: Managing Director

	
 

	
 

	
 

	
 

	
(ii)

	
to the Owner
  at:

	
 

	
 

	
 

	
 

	
 

	
C/o Safe
  Bulkers, Inc.

  32 Avenue K. Karamanli 

  P.O. Box 70837

  16605 Voula 

  Athens, Greece 

  Facsimile No.: +30 210 [895 6900]

  Attention: President

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

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

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

A-II-11

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

For the Owner 

For the Construction Supervisor 

A-II-12

SCHEDULE 1

FORM OF CONSTRUCTION CERTIFICATE

[On the letterhead of the Construction
Supervisor]

[Vessel Owner]
(the “Owner”) 

[Address] 

Facsimile: [     ] 

Attention: [     ]

Date: _________________

Dear Sirs, 

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

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

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

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

	
 

	
 

	
(i)

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

	
 

	
 

	
(ii)

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

S-1-1

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

	
 

	
 

	
 

	
Yours
  faithfully, 

	
 

	
 

	
 

	

	
 

	
for and on
  behalf of

	
 

	
SAFETY MANAGEMENT OVERSEAS S.A.

S-1-2EXHIBIT 10.2

 

 

SAFE BULKERS, INC., 

  

  POLYS HAJIOANNOU, 

  

  VORINI HOLDINGS INC. 

  

  SAFEFIXING CORP 

  

  - and - 

  

MACHAIRIOTISSA HOLDINGS INC. 

  RESTRICTIVE COVENANT AGREEMENT 
  

 

 

THIS RESTRICTIVE COVENANT AGREEMENT

(this “Agreement”) is made on [•],
2008, 

BY AND BETWEEN: 

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

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

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

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

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

WHEREAS: 

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

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

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

 

2 

ARTICLE I 

INTERPRETATION 

SECTION 1.1. In this Agreement, unless the context otherwise requires: 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

3 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

4 

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

(aa) “Proposed Change in Control of SafeFixing” shall mean (i) the approval by the board of directors of SafeFixing or the
shareholders of SafeFixing of a proposed sale of all or substantially all of the assets or property of SafeFixing, (ii) the approval by the shareholders of SafeFixing of a proposed sale of SafeFixing’s shares that would result in one or more of
the Hajioannou Entities and Nicolaos Hadjioannou, collectively, owning less than 50.1% of the voting power of the outstanding voting securities of SafeFixing or (iii) the approval by the shareholders of SafeFixing of a proposed merger, consolidation
or similar transaction, as a result of which one or more of the Hajioannou Entities and Nicolaos Hadjioannou, collectively, would beneficially own less than 50.1% of the voting power of the outstanding voting securities of the resulting entity
following such transaction.   (bb) “Restricted Period” shall have the meaning set forth in Section 3.1. 

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

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

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

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

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

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

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

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

 

5 

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

ARTICLE II 

ACKNOWLEDGEMENT AND REPRESENTATION 

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

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

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

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

ARTICLE III 

NON-COMPETITION 

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

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

 

6 

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

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

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

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

 

7 

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

ARTICLE IV 

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

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

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

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

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

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

 

8 

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

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

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

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

ARTICLE V 

NOTICES 

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

Safe Bulkers, Inc.

c/o Safety Management Overseas S.A. 

32 Avenue K. Karamanli 

P.O. Box 70837 

16605 Voula 

Athens, Greece 

Attention: Chief Executive Officer 

Telefax:

9 

Polys Hajioannou 

[ADDRESS] 

Attention: Polys Hajioannou] 

Vorini Holdings Inc. 

[ADDRESS] 

Attention: [CONTACT] 

Machairiotissa Holdings Inc. 

[ADDRESS] 

Attention: [CONTACT]

ARTICLE VI 

APPLICABLE LAW AND JURISDICTION 

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

ARTICLE VII 

ARBITRATION 

SECTION 7.1. All disputes arising out of this Agreement shall be arbitrated in London in the following manner. One arbitrator is to be appointed by the Company, a second by the Hajioannou Entities
(acting together) relevant to such arbitration and a third by the two so chosen. Their decision or that of any two of the arbitrators shall be final and, for the purpose of enforcing any award, this Agreement may be made a rule of the court. The
arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the Arbitration Act of 1996 or any statutory modification or re-enactment thereof. 

SECTION 7.2. In the event that the Company or any of the Hajioannou Entities shall state a dispute and designate an arbitrator, in writing, the other party shall have twenty (20) Business Days to
designate its own arbitrator. Upon failure to do so, the arbitrator appointed by the other party can conduct the arbitration and render an award hereunder. 

SECTION 7.3. Until such time as the arbitrators finally close the hearings, either of the Company or the Hajioannou Entities relevant to such arbitration shall have the right by written notice served
on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination. 

SECTION 7.4. The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of the Agreement of the parties, including but not
limited to the posting of security. Awards 

10 

pursuant to this Article VII may include costs, including a reasonable allowance for attorneys’ fees, and judgments may be entered upon any award made herein in any court having jurisdiction. 

ARTICLE VIII 

MISCELLANEOUS 

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

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

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

[Remainder of page intentionally left blank.]

 

 

11 

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

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

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