20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

[_]	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2010
	OR
[_]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to
[_]	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Date of event requiring this shell company report
	For the transition period from  ___________ to
	Commission file number
	STAR BULK CARRIERS CORP.
	(Exact name of Registrant as specified in its charter)
	(Translation of Registrant's name into English)
	Republic of the Marshall Islands
	(Jurisdiction of incorporation or organization)
	7, Fragoklisias Street, 2nd floor, Maroussi 151 25, Athens, Greece
	(Address of principal executive offices)
	Spyros Capralos, 011 30 210 617 8400, scapralos@starbulk.com, c/o Star Bulk Carriers Corp., 7, Fragoklisias Street, 2nd floor Maroussi 151 25, Athens, Greece
	(Name, telephone, email and/or facsimile number and address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of exchange on which registered
Common Stock, par value $0.01 per share	NASDAQ Global Select Market

Securities registered or to be registered pursuant to Section 12(g) of the Act:  None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  None.

 Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:  As of December 31, 2010, there were 63,410,360 shares of common stock of the registrant outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[_] Yes [X] No

If this report is an annual report or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

[_] Yes [X] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [_] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[_] Yes [_] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer [  ] Accelerated filer  [X] Non-accelerated filer  [  ]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 [X] US GAAP [_]   International Financial Reporting Standards as issued by the International Accounting Standards Board [_] Other

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

[_] Item 17 or [_] Item 18.

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] Yes [X] No

FORWARD-LOOKING STATEMENTS

Star Bulk Carriers Corp. and its wholly owned subsidiaries, or the Company, desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect" and similar expressions identify forward-looking statements.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include; (i) the strength of world economies; (ii) fluctuations in currencies and interest rates; (iii) general market conditions, including fluctuations in charterhire rates and vessel values; (iv) changes in demand in the drybulk shipping industry, including the market for our vessels; (v) changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs; (vi) changes in governmental rules and regulations or actions taken by regulatory authorities; (vii) potential liability from pending or future litigation; (viii) general domestic and international political conditions; (ix) potential disruption of shipping routes due to accidents or political events; (x) the availability of financing and refinancing, (xi) vessel breakdowns and instances of off-hire, and (xii) other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission, or the Commission. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof.

TABLE OF CONTENTS

PART I		1
	Item 1. Identity of Directors, Senior Management and Advisers	1
	Item 2. Offer Statistics and Expected Timetable	1
	Item 3. Key Information	1
	Item 4. Information on the Company	24
	Item 4A. Unresolved Staff Comments	39
	Item 5. Operating and Financial Review and Prospects	40
	Item 6. Directors, Senior Management and Employees	59
	Item 7. Major Shareholders and Related Party Transactions	66
	Item 8. Financial Information	68
	Item 9. The Offer and Listing	70
	Item 10. Additional Information	71
	Item 11. Quantitative and Qualitative Disclosures about Market Risk	81
	Item 12. Description of Securities Other than Equity Securities	83
PART II		83
	Item 13. Defaults, Dividend Arrearages and Delinquencies	83
	Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	83
	Item 15. Controls and Procedures	83
	Item 16A. Audit Committee Financial Expert	87
	Item 16B. Code of Ethics	87
	Item 16C. Principal Accountant Fees and Services	87
	Item 16D. Exemptions from the Listing Standards for Audit Committees	87
	Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	87
	Item 16F. Change in Registrants Certifying Accountant	87
	Item 16G. Corporate Governance	88
PART III		88
	Item 17. Financial Statements	88
	Item 18. Financial Statements	88
	Item 19. Exhibits	89

PART I

Item 1.    Identity of Directors, Senior Management and Advisers

Not Applicable.

Item 2.    Offer Statistics and Expected Timetable

Not Applicable.

Item 3.    Key Information

Throughout this report, the "Company," "Star Bulk," "we," "us" and "our" all refer to Star Bulk Carriers Corp. and its wholly owned subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry. We operate drybulk vessels of two sizes: Capesize, which are vessels with carrying capacities of more than 85,000 dwt, and Supramax, which are vessels with carrying capacities of between 45,000 and 60,000 dwt. Unless otherwise indicated, all references to "Dollars" and "$" in this report are to U.S. Dollars.

Financial data presented herein include the accounts of the Company and of Star Maritime Acquisition Corp., or Star Maritime.

Star Maritime was organized under the laws of the State of Delaware on May 13, 2005 as a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more assets or target businesses in the shipping industry. Star Maritime's common stock and warrants started trading on the American Stock Exchange under the symbols, SEA and SEA.WS, respectively, on December 21, 2005.  Star Bulk was incorporated in the Republic of the Marshall Islands on December 13, 2006 as a wholly-owned subsidiary of Star Maritime.

On November 27, 2007, Star Maritime obtained shareholder approval for the acquisition of the initial fleet of eight drybulk carriers and for effecting a redomiciliation merger whereby Star Maritime merged with and into its wholly owned subsidiary at the time Star Bulk with Star Bulk as the surviving entity, or the Redomiciliation Merger. The Redomiciliation Merger was completed on November 30, 2007 as a result of which each outstanding share of Star Maritime common stock was converted into the right to receive one share of Star Bulk common stock and each outstanding warrant of Star Maritime was assumed by Star Bulk with the same terms and restrictions except that each became exercisable for common stock of Star Bulk. We commenced operations on December 3, 2007, which is the date we took delivery of our first vessel.  During the period from Star Maritime's inception on May 13, 2005 to December 3, 2007, we were a development stage enterprise.

Our common stock is listed on the Nasdaq Global Select Market under the symbol "SBLK."  All of our warrants expired worthless and ceased trading on the Nasdaq Global Select Market on March 15, 2010.

A.           Selected Consolidated Financial Data

The table below summarizes our recent financial information. The historical information was derived from the audited consolidated financial statements of Star Maritime and its subsidiaries for the fiscal year ended December 31, 2006.  The information of Star Bulk and its wholly owned subsidiaries for the fiscal years ended December 31, 2007 includes the results for Star Maritime from January 1, 2007 to November 30, 2007, which is the date that the Redomiciliation Merger was completed. We refer you to the notes to our consolidated financial statements for a discussion of the basis on which our consolidated financial statements are presented. The information provided below should be read in conjunction with "Item 5. Operating and Financial Review and Prospects" and the consolidated financial statements, related notes and other financial information included herein.

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The historical results included below and elsewhere in this document are not necessarily indicative of the future performance of Star Bulk.

3.A.(i)   CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands of U.S. Dollars, except per share and share data)				Year Ended December 31,
	2006			2007			2008			2009			2010
Voyage revenues		-			3,633			238,883			142,351			121,042
Voyage expenses		-			43			3,504			15,374			16,839
Vessel operating expenses		-			622			26,198			30,168			22,349
Management fees		-			23			1,367			771			164
Drydocking expenses		-			-			7,881			6,122			6,576
Depreciation		1			745			51,050			58,298			46,937
Vessel impairment loss		-			-			3,646			75,208			34,947
(Gain)/loss on derivative instruments		-			-			(251)			2,154			2,083
(Gain) on time charter agreement termination		-			-			(9.711)			(16,219	)		-
Other operating income		-			-			-			-			(26,648)
Loss on bad debts		-			-			-			-			2,131
Loss on time charter agreement termination		-			-			-			11,040			-
General and administrative expenses		1,210			7,756			12,424			8,742			15,404
Operating (loss)/ income		(1,211	)		(5,556	)		142,775			(49,307)			260
Interest and Finance costs		-			(45)			(10,238	)		(9,914	)		(5,916)
Interest and other income		4,396			9,021			1,201			806			525
Income/ (loss) before taxes		3,185			3,420			133,738			(58,415)			(5,131)
Income taxes		(207	)		(9	)		-			-			-
Net Income/(loss)		2,978			3,411			133,738			(58,415)			(5,131)
Earnings/(loss) per share, basic		0.10			0.11			2.55			(0.96)			(0.08)
Earnings/(loss) per share, diluted		0.10			0.09			2.46			(0.96)			(0.08)
Weighted average number of shares outstanding, basic		29,026,924			30,065,923			52,477,947			60,873,421			61,489,162
Weighted average number of shares outstanding, diluted		29,029,924			36,817,616			54,447,985			60,873,421			61,489,162

3.A. (ii)   CONSOLIDATED BALANCE SHEET AND OTHER FINANCIAL DATA

(In thousands of Dollars, except per share and share data)			Year Ended December 31,
	2006		2007		2008		2009		2010
Cash and cash equivalents		2,118		18,985		29,475		40,142		12,824
Investments in Trust Account		192,915		-		-		-			-
Total assets		195,186		403,742		891,376		760,641		703,250
Current liabilities		6,973		3,057		57,287		71,092		43,235
Common stock		3		425		584		611		634
Stockholders' equity		123,533		375,378		560,140		499,257		488,252
Total liabilities and stockholders' equity		195,186		403,742		891,376		760,641		703,250

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OTHER FINANCIAL DATA
Dividends declared and paid ($0.98 $0.10  and $0.20 per share, respectively)	-		-	52,614		6,185		12,385
Net cash provided by operating activities	1,699		370	110,747		65,877		87,949
Net cash (used in)/ provided by investing activities	(4	)	12,963	(423,305)		(1,430	)	(60,151)
Net cash (used in)/ provided financing activities	(170)		3,534	323,048		(53,780)		(55,116)
FLEET DATA
Average number of vessels (1)	-		0.21	10.76		11.97		10.81
Total ownership days for fleet (2)	-		75	3,933		4,370		3,945
Total available days for fleet (3)	-		71	3,712		4,240		3,847
Total voyage days for fleet (4)	-		69	3,618		4,117		3,829
Fleet utilization (5)	-		93%	98	%	97	%	99%
AVERAGE DAILY RESULTS (In Dollars)
Time charter equivalent (6)	-		31,203	42,799		29,450		26,859
Vessel operating expenses	-		-	6,661		6,903		5,665
Management fees	-		-	348		176		41
General and administrative expenses	-		-	3,159		2,000		3,904
Total vessel operating expenses	-		-	10,168		9,079		9,610

(1)	Average number of vessels is the number of vessels that comprised our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
(2)	Ownership days are the total calendar days each vessel in the fleet was owned by us for the relevant period.
(3)	Available days for the fleet are the ownership days after subtracting for off-hire days as a result of major repairs dry-docking or special or intermediate surveys.
(4)	Voyage days are the total days the vessels were in our possession for the relevant period after subtracting all off-hire days incurred for any reason (including off-hire for dry-docking, major repairs, special or intermediate surveys or transfer of ownership).
(5)	Fleet utilization is calculated by dividing voyage days by available days for the relevant period.
(6)	Represents the weighted average time charter equivalent, or TCE, of our entire fleet.  TCE rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses and amortization of fair value of above/below market acquired time charter agreements) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods.  We included under the heading "Average Daily Results" TCE revenues, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE may not be comparable to that reported by other companies. For further information concerning our calculation of TCE rate and of reconciliation of TCE rate to voyage revenue, please see Item 5. "Operating and Financial Review and Prospects – Operating Results."

B.           Capitalization and Indebtedness

Not Applicable.

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C.           Reasons for the Offer and Use of Proceeds

Not Applicable.

D.           Risk factors

Some of the following risks relate principally to the industry in which we operate and our business in general. Other risks relate principally to the securities market and ownership of our common stock. The occurrence of any of the events described in this section could significantly and negatively affect our business, financial condition, operating results or cash available for dividends or the trading price of our common stock.

Industry Specific Risk Factors

Any renewal of the recent worldwide economic downturn could have a material adverse effect on our revenue, profitability and financial position.

In recent years, operating businesses in the global economy have faced tightening credit, weakening demand for goods and services, deteriorating international liquidity conditions, and declining markets. At times, lower demand for drybulk cargoes as well as diminished trade credit available for the delivery of such cargoes have led to decreased demand for drybulk vessels, creating downward pressure on charter rates. Although vessel values have stabilized over the past few months, general market volatility has resulted from uncertainty about sovereign debt and fears of countries such as Greece and Portugal defaulting on their governments' financial obligations. In addition, continued hostilities in the Middle East, recent tensions in North Africa and the occurrence or threat of terrorist attacks against the United States or other countries could adversely affect the economies of the United States and those of other countries.  If the current global economic environment persists or worsens, we may be negatively affected in the following ways:

· we may not be able to employ our vessels at charter rates as favorable to us as historical rates or operate our vessels profitably; and

· the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired.

The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Charterhire rates for drybulk carriers are volatile and may further decrease in the future, which would adversely affect our earnings and ability to pay dividends.

We currently own and operate a fleet of 13 vessels consisting of five Capesize drybulk carriers, including two Capesize newbuildings that are currently being constructed at Hanjin Heavy Industries, and eight Supramax drybulk carriers with an average age of 10.6 years and a combined cargo carrying capacity of approximately 1,287,686 dwt. The drybulk shipping industry is cyclical with attendant volatility in charterhire rates and profitability. The degree of charterhire rate volatility among different types of drybulk carriers varies widely. The Baltic Dry Index, or the BDI, which is published daily by the Baltic Exchange Limited, or the Baltic Exchange, a London-based membership organization that provides daily shipping market information to the global investing community, is an average of selected ship brokers' assessments of time charter rates paid by a customer to hire a drybulk vessel to transport drybulk cargoes by sea.  The BDI has long been viewed as the main benchmark to monitor the movements of the drybulk vessel charter market and the performance of the entire drybulk shipping market.  The BDI declined from a high of 11,793 in May 2008 to a low of 663 in December 2008, which represents a decline of 94%.  The BDI fell over 70% during the month of October, 2008, alone.  During 2009, the BDI remained volatile, reaching a low of 772 on January 5, 2009 and a high of 4,661 on November 19, 2009. The BDI decreased to 2,571 on February 12, 2010 primarily due to uncertainty in the freight markets. The BDI staged a modest recovery based on strong demand for commodities from Asia and a recovering global market, but it has since declined primarily due to increases in vessel supply. As of March 11, 2011, the index was at 1,562. This downturn in drybulk charter rates and their volatility, which has resulted from the economic dislocation worldwide and the disruption of the credit markets, has had and may continue to have a number of adverse consequences for drybulk shipping, including, among other things:

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· an absence of financing for vessels;

· no active second-hand market for the sale of vessels;

· extremely low charter rates, particularly for vessels employed in the spot market;

· widespread loan covenant defaults in the drybulk shipping industry; and

· declaration of bankruptcy by some operators and shipowners as well as charterers.

The occurrence of one or more of these events could adversely affect our business, results of operations, cash flows, financial condition and ability to pay dividends. The drybulk charter market may not recover and the market could decline further.

If the drybulk shipping market remains depressed in the future our earnings and available cash flow may decrease. Our ability to re-charter our vessels on the expiration or termination of their current time charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions in the drybulk shipping market.

An over-supply of drybulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our profitability.

Fluctuations in charter rates and vessel values result from changes in the supply and demand for drybulk cargoes carried internationally at sea, including coal, iron, ore, grains and minerals.  The market supply of drybulk carriers has been increasing, and the number of drybulk carriers on order was recently at near historic highs.  These newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through 2010. While vessel supply will continue to be affected by the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or accidental losses, an over-supply of drybulk carrier capacity, particularly in conjunction with the currently low level of demand, could exacerbate the recent decrease in charter rates or prolong the period during which low charter rates prevail. If the current low charter rate environment persists, or a further reduction occurs, during a period when the current charters for our drybulk carriers expire or are terminated, we may only be able to recharter those vessels at reduced rates or we may not be able to charter our vessels at all. The charters for seven of our vessels expire in 2011.

The factors affecting the supply and demand for vessel capacity are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

The factors that influence demand for vessel capacity include:

· demand for and production of drybulk products;

· global and regional economic and political conditions;

· the distance drybulk cargo is to be moved by sea; and

· changes in seaborne and other transportation patterns.

The factors that influence the supply of vessel capacity include:

· the number of new building deliveries;

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· port and canal congestion;

· the scrapping of older vessels;

· vessel casualties; and

· the number of vessels that are out of service.

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

We anticipate that the future demand for our drybulk carriers will be dependent upon continued economic growth in the world's economies, including China and India, seasonal and regional changes in demand, changes in the capacity of the global drybulk carrier fleet and the sources and supply of drybulk cargo to be transported by sea. The capacity of the global drybulk carrier fleet seems likely to increase and economic growth may not continue. Adverse economic, political, social or other developments could also have a material adverse effect on our business and operating results.

An economic slowdown in the Asia Pacific region could exacerbate the effect of recent slowdowns in the economies of the United States and the European Union and may have a material adverse effect on our business, financial condition and results of operations.

We anticipate a significant number of the port calls made by our vessels will continue to involve the loading or discharging of drybulk commodities in ports in the Asia Pacific region. As a result, any negative changes in economic conditions in any Asia Pacific country, particularly in China, may exacerbate the effect of recent slowdowns in the economies of the United States and the European Union and may have a material adverse effect on our business, financial condition and results of operations, as well as our future prospects. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. While the growth rate of China's gross domestic product increased to approximately 10.3% for the year ended December 31, 2010, as compared to approximately 9.1% for the year ended December 31, 2009, the Chinese GDP growth rate remains below pre-2008 levels. China has recently imposed measures to restrain lending, which may further contribute to a slowdown in its economic growth. It is possible that China and other countries in the Asia Pacific region will continue to experience slowed or even negative economic growth in the near future. Moreover, the current economic slowdown in the economies of the United States, the European Union and other Asian countries may further adversely affect economic growth in China and elsewhere. Our business, financial condition and results of operations, ability to pay dividends as well as our future prospects, will likely be materially and adversely affected by a further economic downturn in any of these countries.

The recent earthquake and tsunami in Japan may have an adverse affect on our business, results of operations, financial condition and ability to pay dividends.

Japan is one of the world's leading importers of oil and dry bulk commodities.  The earthquake and tsunami that occurred in Japan on March 11, 2011 have caused an estimated $180 billion of damage and has threatened to send the Japanese economy into a recession.  As of the date of this annual report, the extent to which the earthquake and tsunami will affect the international shipping industry is unclear.  With the third largest economy in the world, a prolonged recovery period with a relatively stagnant Japanese economy could decrease oil and dry bulk imports to that country.  This, in turn, could have a material adverse effect on our business and results of operations.

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Sharp declines in the spot drybulk charter market may affect our earnings and cash flows from the vessels we operate in the spot market.

We currently employ two of our vessels in the spot market. During 2010, we did not have any revenues derived from the spot market. Vessels trading in the spot market are exposed to increased risk of declining charter rates and freight rate volatility compared to vessels employed on time charters. Since mid-August 2008, the spot day rates in the drybulk charter market have declined significantly, and drybulk vessel values have also declined both as a result of a slowdown in the availability of global credit and the significant deterioration in charter rates. Charter rates and vessel values have been affected in part by the lack of availability of credit to finance both vessel purchases and purchases of commodities carried by sea, resulting in a decline in cargo shipments, and the excess supply of iron ore in China which resulted in falling iron ore prices and increased stockpiles in Chinese ports. Charter rates may remain at depressed levels for some time which will adversely affect our revenue and profitability.

The market values of our vessels have declined and may further decline, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our current or future credit facilities and/or we may incur a loss if we sell vessels following a decline in their market value.

The fair market values of our vessels have generally experienced high volatility and have declined significantly. The market prices for secondhand Capesize and Supramax drybulk carriers have decreased sharply from their historically high levels.  The fair market value of our vessels may continue to fluctuate (i.e., increase and decrease) depending on a number of factors including:

· prevailing level of charter rates;

· general economic and market conditions affecting the shipping industry;

· types and sizes of vessels;

· supply and demand for vessels;

· other modes of transportation;

· cost of newbuildings;

· governmental or other regulations; and

· technological advances.

In addition, as vessels grow older, they generally decline in value. If the fair market value of our vessels declines further, we may not be in compliance with certain provisions of our amended term loans and we may not be able to refinance our debt or obtain additional financing. In addition, if we sell one or more of our vessels at a time when vessel prices have fallen, the vessel or vessels would be classified as assets held for sale, and would result in a loss and a reduction in earnings.

Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea and in the Gulf of Aden off the coast of Somalia. Over the last several years, the frequency of piracy incidents has increased significantly, particularly in the Gulf of Aden off the coast of Somalia and towards the Mozambique Canal in the North Indian Ocean. For example, in April 2010, the M/V Samho Dream, a tanker vessel not affiliated with us, was captured by pirates in the Indian Ocean off the Somali coast while carrying crude oil estimated to be worth $170.0 million. The vessel was in waters not normally known to be high risk seas for pirate attacks and was only released in November 2010 reportedly following a ransom payment in an undisclosed amount.  On January 15, 2011, the M/V Samho Jewelry, a tanker vessel not affiliated with us, was captured by pirates off the coast of Oman and was released following military action on January 21, 2011. According to industry sources as of March 14, 2011 there were approximately 25 vessels and 577 hostages being held by pirates off the coast of Somalia and the average amount of time that vessels and hostages are being detained by pirates is increasing.

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 If these piracy attacks result in regions in which our vessels are deployed being characterized by insurers as "war risk" zones, as the Gulf of Aden temporarily was in May 2008, or Joint War Committee (JWC) "war and strikes" listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain.  Crew costs, including those due to employing onboard security guards, could increase in such circumstances.  In addition, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released.  A charterer may also claim that a vessel seized by pirates was not "on-hire" for a certain number of days and it is therefore entitled to cancel the charter party, a claim that we would dispute.  We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us.  In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition, results of operations and cash flows.

In response to piracy incidents since 2008, particularly in the Gulf of Aden off the coast of Somalia, following consultation with regulatory authorities, we may station guards on some of our vessels in some instances. While our use of guards is intended to deter and prevent the hijacking of our vessels, it may also increase our risk of liability for death or injury to persons or damage to personal property. While we believe we will generally have adequate insurance in place to cover such liability, if we do not, it could adversely impact our business, financial condition, results of operations and cash flows.

Disruptions in world financial markets and the resulting governmental action in the United States and in other parts of the world could have a material adverse impact on our results of operations, financial condition and cash flows, and could cause the market price of our common stock to further decline.

In 2008 and 2009 the United States and other parts of the world exhibited deteriorating economic trends and were in a recession. For example, the credit markets in the United States experienced significant contraction, de-leveraging and reduced liquidity, and the United States federal government and state governments have implemented and are continuing to implement a broad variety of governmental action and/or new regulation of the financial markets. Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations and other requirements. The Commission, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws.

During 2008 and 2009 and recently, a number of financial institutions experienced serious financial difficulties and, in some cases, have entered bankruptcy proceedings or are in regulatory enforcement actions.  These difficulties have resulted, in part, from declining markets for assets held by such institutions, particularly the reduction in the value of their mortgage and asset-backed securities portfolios.  These difficulties have been compounded by a general decline in the willingness by banks and other financial institutions to extend credit. In addition, these difficulties may adversely affect the financial institutions that provide our credit facilities and may impair their ability to continue to perform under their financing obligations to us, which could have an impact on our ability to fund current and future obligations, including our ability to take delivery of our newbuildings.  As of March 21, 2011, we had total outstanding indebtedness of $217.7 million and the ability to draw down an additional $48.6 million under our existing credit facilities.

We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate in the United States and worldwide may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, have caused the trading price of our common shares on the Nasdaq Global Select Market to decline precipitously and could cause the price of our common shares to continue to decline or impair our ability to make distributions to our shareholders.

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Charter rates are subject to seasonal fluctuations and market volatility, which may adversely affect our financial condition and ability to pay dividends.

We charter all of our vessels on medium- to long-term time charters with an average remaining term of approximately 1.9 years, other than the Star Cosmo and Star Omicron that are currently employed in the spot market.   Demand for vessel capacity has historically exhibited seasonal variations and, as a result, fluctuations in charter rates. This seasonality may result in quarter-to-quarter volatility in our operating results for vessels trading in the spot market. The drybulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere. As a result, our revenues from our drybulk carriers may be weaker during the fiscal quarters ended June 30 and September 30, and, conversely, our revenues from our drybulk carriers may be stronger in fiscal quarters ended December 31 and March 31. Seasonality in the sector in which we operate could materially affect our operating results and cash available for dividends in the future.

Rising fuel prices may adversely affect our profits.

Fuel is a significant, if not the largest, expense in our shipping operations when vessels are not under period charter. Changes in the price of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries (OPEC) and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.

Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.

The operation of our vessels is affected by the requirements set forth in the United Nations' International Maritime Organization's International Management Code for the Safe Operation of Ships and Pollution Prevention, or ISM Code. The ISM Code requires shipowners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. If we are subject to increased liability for noncompliance or if our insurance coverage is adversely impacted as a result of noncompliance, we may have less cash available for distribution to our stockholders as dividends. If any of our vessels are denied access to, or are detained in, certain ports, this may decrease our revenues.

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We operate our vessels worldwide and as a result, our vessels are exposed to international risks which may reduce revenue or increase expenses.

The international shipping industry is an inherently risky business involving global operations. Our vessels are at a risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. In addition, changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in market disruptions which may reduce our revenue or increase our expenses.

If our vessels call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our common stock.

From time to time on charterers' instructions, our vessels may call on ports located in countries subject to sanctions and embargoes imposed by the United States government and countries identified by the U.S. government as state sponsors of terrorism. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act ("CISADA"), which expanded the scope of the former Iran Sanctions Act. Among other things, CISADA expands the application of the prohibitions to non-U.S. companies, such as our company, and introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, we may not be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in our company. Additionally, some investors may decide to divest their interest, or not to invest, in our company simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common stock may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Political instability, terrorist attacks and international hostilities can affect the seaborne transportation industry, which could adversely affect our business.

We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and ability to pay dividends if reinstated in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts, including the current political instability in Egypt, terrorist or other attacks, war or international hostilities. Terrorist attacks such as those in New York on September 11, 2001, in London on July 7, 2005, and in Mumbai on November 26, 2008, and the continuing response of the United States and others to these attacks, as well as the threat of future terrorist attacks around the world, continues to cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East and North Africa, and the presence of U.S. and other armed forces in Iraq and Afghanistan may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.

In the past, political conflicts have also resulted in attacks on vessels, such as the attack on the Limburg in October 2002, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea. Any of these occurrences could have a material adverse impact on our business, financial condition, results of operations and ability to pay dividends.

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Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspection procedures may result in the seizure of contents of our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations.

Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a claimant may seek to obtain security for its claim by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of money to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could attempt to assert "sister ship" liability against one vessel in our fleet for claims relating to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes its owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes its charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues and reduce the amount of cash we have available for distribution as dividends to our stockholders.

Company Specific Risk Factors

Substantial debt levels could limit our flexibility to obtain additional financing or pursue other business opportunities.

As of March 21, 2011, we had outstanding indebtedness of $217.7 million and we expect to incur additional indebtedness as we continue to grow our fleet. Currently, we have additional borrowing capacity of $48.6 million under our Credit Agricole Corporate and Investment Bank loan facility. This level of debt could have important consequences to us, including the following:

· we may not be able to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes or such financing may be unavailable on favorable terms;

· we may need to use a substantial portion of our cash from operations to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to our shareholders;

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· our debt level could make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and

· our debt level may limit our flexibility in responding to changing business and economic conditions.

Our ability to service our debt will depend upon, among other things, our financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating income is not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to effect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future.  In addition, our loan agreements may impose operation restrictions on us such as changing the management of our vessels.  Please see "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."

We may be unable to comply with the covenants contained in our loan agreements, which would affect our ability to conduct our business.

Our loan agreements for our borrowings, which are secured by liens on our vessels, contain various financial and other covenants. Among those covenants are requirements that relate to our financial position, operating performance and liquidity. For example, under certain provisions of our loan agreements we are required to maintain a ratio of the fair market value of our vessels to the aggregate amounts outstanding of 120% for the first three years and 135% thereafter.

The market value of drybulk vessels is sensitive, among other things, to changes in the drybulk charter market, with vessel values deteriorating in times when drybulk charter rates are falling and improving when charter rates are anticipated to rise. The current decline in charter rates in the drybulk market coupled with the prevailing difficulty in obtaining financing for vessel purchases have adversely affected drybulk vessel values, including the vessels in our fleet. As a result, we may not meet certain minimum asset coverage covenants in our loan agreements.

In March and December 2009, we entered into agreements with each of our lenders to obtain waivers for certain covenants including minimum asset coverage covenants contained in our loan agreements.

Under the terms of our waiver agreements, as amended, our dividend payments, share repurchases and investments are subject to the prior written consent of our lenders.  In addition, for the duration of the waiver periods the interest spread for each of the above referenced loans will be adjusted to 2% per annum.  Following the waiver period, the interest spread under our $150.0 million and $35.0 million loan facilities will be adjusted to 1.5% and under our $120 million loan facility the interest spread will be adjusted to that provided in the initial loan agreement.  Please see "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."

If we are not in compliance with our covenants and we are not able to obtain additional covenant waivers or modifications, our lenders could require us to post additional collateral, enhance our equity and liquidity, increase our interest payments or pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, or they could accelerate our indebtedness, which would impair our ability to continue to conduct our business. If our indebtedness is accelerated, we might not be able to refinance our debt or obtain additional financing and could lose our vessels if our lenders foreclose their liens. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan agreements.

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Our lenders have imposed a restriction on our dividend payments under the terms of our waiver agreements.

As a result of restrictions imposed by our lenders, including the restriction on dividend payments under the terms of our waiver agreements, we may not be able to pay dividends.

We previously paid regular dividends on a quarterly basis from our operating surplus, in amounts that allowed us to retain a portion of our cash flows to fund vessel or fleet acquisitions, and for debt repayment and other corporate purposes, as determined by our management and board of directors. Under the terms of our waiver agreements with our lenders, payment of dividends and repurchases of our shares and warrants are subject to the prior written consent of our lenders.

With the consent of our lenders, (i) in February 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2009 that was paid on March 11, 2010 to shareholders of record as of March 8, 2010, (ii) in May 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ended March 31, 2010 that was paid on June 4, 2010 to shareholders of record on May 31, 2010,  (iii) in August 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending June 30, 2010 that was paid on August 30, 2010 to shareholders of record as of August 25, 2010, (iv) in November 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending September 30, 2010 that was paid on December 6, 2010 to shareholders of record as of November 30, 2010, and (v) in February 2011, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2010 that was paid on March 9, 2011 to shareholders of record as of March 4, 2011.

In addition, the payment of any future dividends will be subject at all times to the discretion of our board of directors and the consent of our lenders. The timing and amount of dividends will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividends, or if there is no surplus, dividends may be declared or paid out of net profits for the fiscal year.

We are dependent on medium- to long-term time charters in a volatile shipping industry and a decline in charterhire rates would affect our results of operations and ability to pay dividends.

We charter all of our vessels on medium- to long-term time charters with an average remaining term of approximately 1.9 years, other than Star Cosmo and Star Omicron that are currently employed in the spot market. The time charter market is highly competitive and spot market charterhire rates (which affect time charter rates) may fluctuate significantly based upon available charters and the supply of, and demand for, seaborne shipping capacity. Our ability to re-charter our vessels on the expiration or termination of their current time charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions in the drybulk shipping market. The drybulk carrier charter market is volatile, and in the past, time charter and spot market charter rates for drybulk carriers have declined below operating costs of vessels. If future charterhire rates are depressed, we may not be able to operate our vessels profitably or to pay dividends to our shareholders.

Delays or defaults by the shipyards in the construction of our newbuildings could increase our expenses and diminish our net income and cash flows

We currently have newbuilding contracts for the construction of a total of two Capesize drybulk vessels at Hanjin Heavy Industries. These projects are subject to the risk of delay or defaults by the shipyards caused by, among other things, unforeseen quality or engineering problems, work stoppages, weather interference, unanticipated cost increases, delays in receipt of necessary equipment, and inability to obtain the requisite permits or approvals. In accordance with industry practice, in the event the shipyards are unable or unwilling to deliver the vessels, we may not have substantial remedies. Failure to construct or deliver the ships by the shipyards or any significant delays could increase our expenses and diminish our net income and cash flows.

Default by our charterers may lead to decreased revenues and a reduction in earnings.

Consistent with drybulk shipping industry practice, we have not independently analyzed the creditworthiness of the charterers. Our revenues may be dependent on the performance of our charterers and, as a result, defaults by our charterers may materially adversely affect our revenues.

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We depend upon a few significant customers for a large part of our revenues and the loss of one or more of these customers could adversely affect our financial performance.

We derive a significant part of our charterhire from a small number of customers, with 87% of our voyage revenues, as presented in our statement of operations, for the fiscal year ended December 31, 2010 generated from six charterers. Currently, nine of our vessels are employed under fixed rate period charters to seven customers. If one or more of these customers is unable to perform under one or more charters with us and we are not able to find a replacement charter, or if a customer exercises certain rights to terminate the charter, we could suffer a loss of revenues that could materially adversely affect our business, financial condition, results of operations and cash available for distribution as dividends to our shareholders.

We could lose a customer or the benefits of a time charter if, among other things:

· the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;

· the customer terminates the charter because we fail to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, default under the charter; or

· the customer terminates the charter because the vessel has been subject to seizure for more than a specified number of days.

If we lose a key customer, we may be unable to obtain charters on comparable terms or may become subject to the volatile spot market, which is highly competitive and subject to significant price fluctuations.  One of our time charters on which we deploy our vessels provide for charter rates that are significantly above current market rates, particularly spot market rates that most directly reflect the current depressed levels of the drybulk charter market. If it were necessary to secure substitute employment, in the spot market or on time charters, for any of these vessels due to the loss of a customer in these market conditions, such employment would be at a significantly lower charter rate than currently generated by such vessel, or we may be unable to secure a charter at all, in either case, resulting in a significant reduction in revenues. The loss of any of our customers or time charters, or a decline in payments under our charters, could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends.

The failure of our charterers to meet their obligations under our time charter agreements, on which we depend for substantially all of our revenues, could cause us to suffer losses or otherwise adversely affect our business.

 We charter all of our vessels on medium- to long-term time charters with an average remaining term of approximately 1.9 years, other than Star Cosmo and Star Omicron that are currently employed in the spot market.  For the year ended December 31, 2010, 87% of our voyage revenues-net of commissions were generated from six charterers. The ability and willingness of each of our counterparties to perform its obligations under a time charter agreement with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the drybulk shipping industry and the overall financial condition of the counterparties. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities such as iron ore, coal, grain, and other minor bulks. In addition, in these depressed market conditions, certain charterers, including some of our charterers, are renegotiating the terms of the charters or defaulting on their obligations under the charters. The time charters for one of our vessels the Star Zeta provide for charter rates that are significantly above market rates as of March 21, 2011.  Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or through a time charter would be at lower rates because of the currently depressed drybulk carrier charter rate levels. The Star Epsilon and the Star Kappa were previously time chartered until 2014 Star Ypsilon until July 2011 and Star Gamma until November 2011. We withdrew the vessels from their charterers' service because of the charterers' repudiatory breach of time charter agreements.  Arbitration proceedings have commenced against the vessels' charterers in London to pursue damages arising from such breach, which will include the loss of hire. In October 2010, we settled our outstanding claims with respect to the Star Ypsilon. We have employed the vessels under new time charter agreements at rates that are lower than we would have earned under the previous charter agreements.  The Star Sigma was previously fixed for a minimum of 36 months and a maximum of 41 months and following renegotiation with the charterer, we agreed to amend the charter to provide for a minimum of 56 months and a maximum of 61 months at a lower rate.  On February 18, 2011, we received a letter from Korea Line Corporation ("KLC"), the charterer of the Star Gamma, requesting an agreement on adjustment of charter hire. Additionally, we were notified of the commencement of rehabilitation proceedings of KLC in Korea and the related schedule for making claims against KLC in those proceedings.  The charter with KLC has a term that ends in December 2011. Currently, KLC owes us approximately $1.8 million in charterhire for the vessel. We have asserted liens in respect of certain amounts due to KLC under sub-charters relating to the vessel and plan to vigorously pursue all amounts owned to us by KLC under the charter, including any damages for the breach of that charter.  If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future.  We refer you to Item 8. Financial Information – Legal Proceedings for a discussion of the outstanding claims related to our vessels.

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We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business.

We have entered into various contracts, including charterparties and contracts of affreightment, or COAs with our customers, newbuilding contracts with shipyards and our credit facilities. We also enter into time charters and voyage charters as a charterer. These agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime industry, the overall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses.  We seek to minimize our counterparty risk by doing business with well established customers and financial institutions. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Investment in derivative instruments such as freight forward agreements or other derivative instruments could result in losses.

From time to time, we may take positions in derivative instruments including freight forward agreements, or FFAs and other derivative instruments. Generally, FFAs and other derivative instruments may be used to hedge a vessel owner's exposure to the charter market for a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and time period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments we could suffer losses in the settling or termination of the FFA or other derivative instruments. This could adversely affect our results of operation and cash flow.

We may have difficulty managing our planned growth properly.

We intend to continue to expand our fleet. Our growth will depend on:

·           locating and acquiring suitable vessels;

· identifying and consummating acquisitions or joint ventures;

· obtaining required financing;

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· integrating any acquired vessels successfully with our existing operations;

· enhancing our customer base; and

· managing our expansion.

Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty experienced in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may not be successful in executing our growth plans and may incur significant expenses and losses.

Increases in LIBOR could affect our profitability, earnings and cash flow.

Interest in most loan agreements in our industry has been based on published LIBOR rates. The London market for Dollar loans between banks has recently been volatile, with the spread between published LIBOR and the lending rates actually charged to banks in the London interbank market widening significantly at times. For the past two years LIBOR was at historical lows.  Because the interest rates borne by our outstanding indebtedness fluctuate with changes in LIBOR, an increase in LIBOR would affect the amount of interest payable on our debt, which in turn, could have an adverse effect on our profitability, earnings and cash flow.

In addition, in the waiver agreements with our lenders, we have agreed to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate.  This could increase our lending costs significantly, which would have an adverse effect on our profitability, earnings and cash flow.

In the highly competitive international drybulk shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources which may adversely affect our results of operations.

We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than us. Competition for the transportation of drybulk cargoes can be intense and depends on price, location, size, age, condition and the acceptability of the vessel and its managers to the charterers. Due in part to the highly fragmented market, competitors with greater resources could operate larger fleets through consolidations or acquisitions and may be able to offer more favorable terms.

We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.

Our success depends to a significant extent upon the abilities and efforts of our management team. As of March 21, 2011, we had thirty-one employees.  Twenty-nine of our employees, through our wholly owned subsidiaries, Star Bulk Management Inc., or Star Bulk Management, and Starbulk S.A, are engaged in the day to day management of the vessels in our fleet. Our success depends upon our ability to retain key members of our management team and the ability of Star Bulk Management to recruit and hire suitable employees. The loss of any members of our senior management team could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not maintain "key-man" life insurance on any of our officers or employees of Star Bulk Management and/or Starbulk S.A.

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We depend on officers who may engage in other business activities in the international shipping industry which may create conflicts of interest.

Spyros Capralos, our Chief Executive Officer, President and a member of our board of directors, and George Syllantavos, our Chief Financial Officer, Secretary and member of our board of directors participate in business activities not associated with the Company. As a result, Mr. Capralos and Mr. Syllantavos may devote less time to the Company than if they were not engaged in other business activities and may owe fiduciary duties to the shareholders of both the Company as well as shareholders of other companies with which they may be affiliated, which may create conflicts of interest in matters involving or affecting the Company and its customers. It is not certain that any of these conflicts of interest will be resolved in our favor.

In accordance with our code of ethics, which is located on our website at www.starbulk.com, all ongoing and future transactions between us and any of its officers and directors or their respective affiliates, will be on terms believed by us to be no less favorable than are available from unaffiliated third parties, and such transactions will require prior approval, in each instance by a majority of our uninterested "independent" directors or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to its attorneys or independent legal counsel.

We may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business.

Our success depends in large part on the ability of us to attract and retain highly skilled and qualified personnel. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. If we are not able to obtain higher charter rates to compensate for any crew cost increases, it could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends. If we cannot hire, train and retain a sufficient number of qualified employees, we may be unable to manage, maintain and grow our business, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

Our vessels may call in ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims or restrictions which could have an adverse effect on our business, financial condition, results of operations and cash flows.

As we expand our fleet, we will need to expand our operations and financial systems and hire new shoreside staff and seafarers to staff our vessels; if we cannot expand these systems or recruit suitable employees, our performance may be adversely affected.

Our operating and financial systems may not be adequate as we expand our fleet, and our attempts to implement those systems may be ineffective. In addition, we rely on our wholly-owned subsidiaries, Star Bulk Management and Starbulk S.A., to recruit shoreside administrative and management personnel and for crew management. Shoreside personnel are recruited by Star Bulk Management and Starbulk S.A. through referrals from other shipping companies and traditional methods of securing personnel, such as placing classified advertisements in shipping industry periodicals. Star Bulk Management has sub-contracted crew management for Star Cosmo, which includes the recruitment of seafarers to Union Commercial Inc., or Union. Star Bulk Management, Starbulk S.A. and its crewing agent may not be able to continue to hire suitable employees as Star Bulk expands its fleet. If we are unable to operate our financial and operations systems effectively, recruit suitable employees or if our unaffiliated crewing agent encounters business or financial difficulties, our performance may be materially adversely affected.

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Labor interruptions could disrupt our business.

Star Bulk Management and Starbulk S.A. provide the crew for all of our vessels other than Star Cosmo, which are manned by masters, officers and crews that are employed by our shipowning subsidiaries.  If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out normally and could have a material adverse effect on our business, results of operations, cash flows and financial condition.

We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.

Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels.  These requirements include, but are not limited to, the International Convention on Civil Liability for Oil Pollution Damage of 1969, the International Convention for the Prevention of Pollution from Ships of 1975, the International Maritime Organization, or IMO, International Convention for the Prevention of Marine Pollution of 1973, the IMO International Convention for the Safety of Life at Sea of 1974, the International Convention on Load Lines of 1966, the U.S. Oil Pollution Act of 1990, or OPA, the U.S. Clean Air Act, U.S. Clean Water Act and the U.S. Marine Transportation Security Act of 2002.  Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels.  We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions, the management of ballast waters, maintenance and inspection, elimination of tin-based paint, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents.  These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition.  A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations.  Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault.  Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-mile exclusive economic zone around the United States.  An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under other federal, state and local laws, as well as third-party damages.  We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents.  Although we have arranged insurance to cover certain environmental risks, such insurance may not be sufficient to cover all such risks or any claims will not have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends, if any, in the future.

If our vessels fail to maintain their class certification and/or fail any annual survey, intermediate survey, dry-docking or special survey, that vessel would be unable to carry cargo, thereby reducing our revenues and profitability and violating certain covenants under our credit facilities.

The hull and machinery of every commercial drybulk vessel must be classed by a classification society authorized by its country of registry.  The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention, or SOLAS.  All of our vessels are certified as being "in class" by RINA a major classification society.

A vessel must undergo annual surveys, dry-dockings and special surveys.  In lieu of a special survey, a vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period.  Every vessel is also required to be dry-docked every two to three years for inspection of the underwater parts of such vessel.

If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, dry-docking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our credit facilities.  Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

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Our vessels may suffer damage due to the inherent operational risks of the seaborne transportation industry and we may experience unexpected drydocking costs, which may adversely affect our business and financial condition.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy and other circumstances or events. These hazards may result in death or injury to persons, loss of revenues or property, environmental damage, higher insurance rates, damage to our customer relationships, delay or rerouting. If our vessels suffer damage, they may need to be repaired at a drydocking facility. For example, the costs of drydock repairs are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover in full. The loss of earnings while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels' positions. The loss of earnings while these vessels are forced to wait for space or travel to more distant drydocking facilities would decrease our earnings.

The operation of drybulk carriers involves certain unique operational risks.

The operation of drybulk carriers has certain unique operational risks. With a drybulk carrier, the cargo itself and its interaction with the ship can be a risk factor. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk carriers are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the drybulk carrier. Drybulk carriers damaged due to treatment during unloading procedures may be more susceptible to a breach to the sea. Hull breaches in drybulk carriers may lead to the flooding of their holds. If a drybulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the drybulk carrier's bulkheads leading to the loss of the drybulk carrier.

If we are unable to adequately maintain or safeguard our vessels we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, results of operations and ability to pay dividends if reinstated in the future. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Purchasing and operating secondhand vessels may result in increased operating costs and vessel off-hire, which could adversely affect our earnings.

Our inspection of secondhand vessels prior to purchase does not provide us with the same knowledge about their condition and cost of any required or anticipated repairs that we would have had if these vessels had been built for and operated exclusively by us. We will not receive the benefit of warranties on secondhand vessels.

Typically, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers.

Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

We inspected all of our second hand vessels, which we acquired from both related and unrelated third parties, considered the age and condition of the vessels in budgeting for their operating, insurance and maintenance costs, and if we acquire additional secondhand vessels in the future, we may encounter higher operating and maintenance costs due to the age and condition of those additional vessels.

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We may not have adequate insurance to compensate us for the loss of a vessel, which may have a material adverse effect on our financial condition and results of operation.

We have procured hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance coverage and war risk insurance for our fleet. We do not maintain, for our vessels, insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel. We may not be adequately insured against all risks. We may not be able to obtain adequate insurance coverage for our fleet in the future. The insurers may not pay particular claims. Our insurance policies may contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. Moreover, insurers may default on claims they are required to pay. If our insurance is not enough to cover claims that may arise, the deficiency may have a material adverse effect on our financial condition and results of operations.

We may be subject to calls because we obtain some of our insurance through protection and indemnity associations.

We may be subject to increased premium payments, or calls, in amounts based on our claim records and the claim records of our fleet managers as well as the claim records of other members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. In addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Because we generate all of our revenues in dollars but incur a significant portion of our expenses in other currencies, exchange rate fluctuations could have an adverse impact on our results of operations.

We generate all of our revenues in dollars but we incur a portion of our expenses in currencies other than the dollar. This difference could lead to fluctuations in net income due to changes in the value of the dollar relative to the other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the dollar falls in value can increase, decreasing our revenues. Further declines in the value of the dollar could lead to higher expenses payable by us.

We are a holding company, and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or to make dividend payments.

We are a holding company, and our subsidiaries, which are all directly and wholly owned by us, , conduct all of our operations and own all of our operating assets.  As a result, our ability to satisfy our financial obligations and to pay dividends to our shareholders depends on the ability of our subsidiaries to generate profits available for distribution to us and, to the extent that they are unable to generate profits, we may be unable to pay dividends to our shareholders.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability of public shareholders to protect their interests.

We are incorporated under the laws of the Republic of the Marshall Islands, and our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, public shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction.

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All of our assets are located outside of the United States. Our business is operated primarily from our offices in Athens, Greece. In addition, our directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States if you believe that your rights have been infringed under securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict you from enforcing a judgment against our assets or the assets of our directors and officers. Although you may bring an original action against us, our officers and directors in the courts of the Marshall Islands based on U.S. laws, and the courts of the Marshall Islands may impose civil liability, including monetary damages, against us, our officers or directors for a cause of action arising under Marshall Islands law, it may be impracticable for you to do so given the geographic location of the Marshall Islands.

There is a risk that we could be treated as a U.S. domestic corporation for U.S. federal income tax purposes after the merger of Star Maritime with and into Star Bulk, with Star Bulk as the surviving corporation, or the Redomiciliation Merger, which would adversely affect our earnings.

Section 7874(b) of the U.S. Internal Revenue Code of 1986, as amended, or the "Code", provides that, unless certain requirements are satisfied, a corporation organized outside of the United States which acquires substantially all of the assets (through a plan or a series of related transactions) of a corporation organized in the United States will be treated as a U.S. domestic corporation for U.S. federal income tax purposes if shareholders of the U.S. corporation whose assets are being acquired own at least 80% of the non-U.S. acquiring corporation after the acquisition. If Section 7874(b) of the Code were to apply to Star Maritime and the Redomiciliation Merger, then, among other consequences, the Company, as the surviving entity of the Redomiciliation Merger, would be subject to U.S. federal income tax as a U.S. domestic corporation on its worldwide income after the Redomiciliation Merger. Upon completion of the Redomiciliation Merger and the concurrent issuance of stock to TMT Co. Ltd., or "TMT", a shipping company headquartered in Taiwan, under the acquisition agreements, the shareholders of Star Maritime owned less than 80% of the Company. Therefore, the Company believes that it should not be subject to Section 7874(b) of the Code after the Redomiciliation Merger. Star Maritime obtained an opinion of its counsel, Seward & Kissel LLP, or "Seward & Kissel", that Section 7874(b) of the Code should not apply to the Redomiciliation Merger. However, there is no authority directly addressing the application of Section 7874(b) of the Code to a transaction such as the Redomiciliation Merger where shares in a foreign corporation such as the Company are issued concurrently with (or shortly after) a merger. In particular, since there is no authority directly applying the "series of related transactions" or "plan" provisions to the post-acquisition stock ownership requirements of Section 7874(b) of the Code, the U.S. Internal Revenue Service, or the "IRS", may not agree with Seward & Kissel's opinion on this matter. Moreover, Star Maritime has not sought a ruling from the IRS on this point. Therefore, the IRS may seek to assert that we are subject to U.S. federal income tax on our worldwide income for taxable years after the Redomiciliation Merger, although Seward & Kissel is of the opinion that such an assertion should not be successful.

We may have to pay tax on U.S. source income, which would reduce our earnings.

Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as the Company and its subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States is characterized as U.S. source shipping income and such income is subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the regulations promulgated thereunder by the U.S. Department of the Treasury.

We expect that we will qualify for this statutory tax exemption and we have taken this position for U.S. federal income tax return reporting purposes for 2010 and we intend to take this position for 2011. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to U.S. federal income tax on our U.S. source shipping income. For instance, we would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if shareholders with a 5% or greater interest in our common stock owned, in the aggregate, 50% or more of our outstanding common stock for more than half the days during the taxable year. Due to the factual nature of the issues involved, we can give no assurances with regard to our tax-exempt status or that of any of our subsidiaries.

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If we are not entitled to the exemption under Section 883 of the Code for any taxable year, we would be subject during those years to a 4% U.S. federal income tax on our U.S. source shipping income. The imposition of this tax would have a negative effect on our business and would result in decreased earnings.

The preferential tax rates applicable to "qualified dividend income" are temporary, and the enactment of proposed legislation could affect whether dividends paid by us constitute "qualified dividend income" eligible for the preferential tax rates.

Certain of our distributions may be treated as "qualified dividend income" eligible for preferential rates of U.S. federal income tax to U.S. taxpayers. In the absence of legislation extending the term for these preferential tax rates, all dividends received by such U.S. taxpayers in tax years beginning on January 1, 2013 or later will be subject to U.S. federal income tax at the graduated tax rates applicable to ordinary income.

In addition, legislation has been proposed in the U.S. Congress that would, if enacted, deny the preferential rates of U.S. federal income tax currently imposed on "qualified dividend income" with respect to dividends received from a non-U.S. corporation if the non-U.S. corporation is created or organized under the laws of a jurisdiction that does not have a comprehensive income tax system. Because the Marshall Islands imposes only limited taxes on entities organized under its laws, it is likely that if this legislation were enacted, the preferential tax rates of U.S. federal income tax may no longer be applicable to distributions received from us. As of the date hereof, it is not possible to predict with certainty whether this proposed legislation will be enacted.

U.S. tax authorities could treat us as a "passive foreign investment company," which could have adverse U.S. federal income tax consequences to U.S. shareholders.

We will be treated as a "passive foreign investment company," or "PFIC", for U.S. federal income tax purposes if either (1) at least 75% of our gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of our assets produce, or are held for the production of, those types of "passive income," to which the Company refers to as "passive assets." For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of investment property, and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive income." U.S. shareholders of a PFIC may be subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our method of operation, we take the position for U.S. federal income tax purposes that we have not been, and are not currently, a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we take the position that our income from our time chartering activities does not constitute "passive income," and the assets that we own and operate in connection with the production of that income do not constitute "passive assets."

There is, however, no direct legal authority under the PFIC rules addressing our method of operation. In addition, we have not received an opinion of counsel with respect to this issue. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from these time charters as services income for other tax purposes. However, we note that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, there is a risk that the IRS or a court of law may not accept our position, and treat us as a PFIC. Moreover, we may constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations.

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If the IRS or a court were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders may face adverse U.S. federal income tax consequences. Under the PFIC rules, unless such U.S. shareholders make an election available under the Code (which election could itself have adverse consequences), such U.S. shareholders would be subject to U.S. federal income tax at the then highest income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common stock, as if the excess distribution or gain had been recognized ratably over the U.S. shareholder's holding period of our common stock.

Risks Relating to Our Common Stock

There may be no continuing public market for you to resell our common stock.

Our common shares commenced trading on the Nasdaq Global Select Market in December 2007. There may be no continuing active or liquid public market for our common shares. The price of our common stock may be volatile and may fluctuate due to factors such as:

· actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;

· mergers and strategic alliances in the drybulk shipping industry;

· market conditions in the drybulk shipping industry and the general state of the securities markets;

· changes in government regulation;

· shortfalls in our operating results from levels forecast by securities analysts; and

· announcements concerning us or our competitors.

You may not be able to sell your shares of our common stock in the future at the price that you paid for them or at all. In addition, if the price of our common stock falls below $1.00, we may be involuntarily delisted from the Nasdaq Global Select Market.

Certain stockholders hold registration rights, which may have an adverse effect on the market price of our common stock.

Initial stockholders of Star Maritime who purchased common stock and units in private transactions prior to Star Maritime's initial public offering have certain registration rights which require us, under certain circumstances, to register the resale of their shares. Pursuant to those registration rights, we have included in a universal shelf registration statement (File No. 333-156843), which was declared effective by the Commission on February 17, 2009, for the resale registration of 14,305,599 shares of common stock. The resale of these common shares in addition to the registration of other securities included in such registration statement, may have an adverse effect on the market price of our common stock.

Future sales of our common stock could cause the market price of our common stock to decline.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales could occur, may depress the market price for our common stock. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.

As noted above, we have filed a universal shelf registration statement pursuant to which we may offer and sell different types of securities and that includes the resale registration of an aggregate of 11,981,766 common shares.  We may issue additional shares of our common stock, warrants or other equity securities or securities convertible into our equity securities in the future and our stockholders may elect to sell large numbers of shares held by them from time to time. Our amended and restated articles of incorporation authorize us to issue 300,000,000 common shares with par value $0.01 per share. As of December 31, 2010 and March 21, 2011, we had 63,410,360 shares outstanding.  All of our warrants expired worthless and ceased trading on the Nasdaq Global Select Market on March 15, 2010.

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Anti-takeover provisions in our organizational documents could make it difficult for our stockholders to replace or remove our current board of directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.

Several provisions of our amended and restated articles of incorporation and bylaws could make it difficult for our stockholders to change the composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable.

These provisions include:

· authorizing our board of directors to issue "blank check" preferred stock without stockholder approval;

· providing for a classified board of directors with staggered, three year terms;

· prohibiting cumulative voting in the election of directors; and

· authorizing the board to call a special meeting at any time.

The market price of our common shares has fluctuated widely and may fluctuate widely in the future.

The market price of our common shares has fluctuated widely since our common shares began trading in the Nasdaq Global Select Market in December 2007, and may continue to do so as a result of many factors such as actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry, mergers and strategic alliances in the shipping industry, market conditions in the shipping industry, changes in government regulation, shortfalls in our operating results from levels forecast by securities analysts, announcements concerning us or our competitors and the general state of the securities market.

The market price of our common shares has dropped below $5.00 per share, and the last reported sale price on the Nasdaq Global Select Market on March 29, 2011 was $2.43 per share. If the market price of our common shares remains below $5.00 per share, under stock exchange rules, our shareholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to continue to use our common shares as collateral may lead to sales of such shares creating downward pressure on and increased volatility in the market price of our common shares.

The shipping industry has been highly unpredictable and volatile. The market for common shares in this industry may be equally volatile. Therefore, we cannot assure you that you will be able to sell any of our common shares you may have purchased at a price greater than or equal to its original purchase price.

Item 4.    Information on the Company

A.           History and development of the Company

We were incorporated in the Marshall Islands on December 13, 2006. Our executive offices are located at 7 Fragoklisias Street, 2nd floor, Maroussi 151 25, Athens, Greece and our telephone number is 011 30 210 617 8400.

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Star Maritime Acquisition Corp., or Star Maritime, was organized under the laws of the State of Delaware on May 13, 2005 as a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more assets or target businesses in the shipping industry. Following the formation of Star Maritime, our officers and directors were the holders of 9,026,924 shares of common stock representing all of our then issued and outstanding capital stock. On December 21, 2005, Star Maritime consummated its initial public offering of 18,867,500 units, at a price of $10.00 per unit, each unit consisting of one share of Star Maritime common stock and one warrant to purchase one share of Star Maritime common stock at an exercise price of $8.00 per share. In addition, Star Maritime completed during December 2005 a private placement of an aggregate of 1,132,500 units each unit consisting of one share of common stock and one warrant, to Mr. Tsirigakis, our former Chief Executive Officer and one of our directors, Mr. Syllantavos, our Chief Financial Officer and one of our directors, Mr. Pappas our Chairman of the Board and Mr. Erhardt, one of our directors. The gross proceeds of the private placement of $11.3 million were used to pay all fees and expenses of the initial public offering and as a result, the entire gross proceeds of the initial public offering amounting to $188.7 million were deposited in a trust account maintained by American Stock Transfer & Trust Company. Star Maritime's common stock and warrants started trading on the American Stock Exchange under the symbols, SEA and SEA.WS, respectively on December 21, 2005.

On January 12, 2007, Star Maritime and Star Bulk entered into definitive agreements to acquire a fleet of eight drybulk carriers with a combined cargo-carrying capacity of approximately 692,000 dwt. from certain subsidiaries of TMT. These eight drybulk carriers are referred to as the initial fleet. The aggregate purchase price specified in the Master Agreement by and among the Company, Star Maritime and TMT, or the Master Agreement, for the initial fleet was $224.5 million in cash and 12,537,645 shares of our common stock, which were issued on November 30, 2007. As additional consideration for eight vessels, we agreed to issue 1,606,962 shares of our common stock to TMT in two installments as follows: (i) 803,481 additional shares of our common stock, no more than 10 business days following the filing of our Annual Report on Form 20-F for the fiscal year ended December 31, 2007, and (ii) 803,481 additional shares of our common stock, no more than 10 business days following the filing of our Annual Report on Form 20-F for the fiscal year ended December 31, 2008. The shares in respect of the first installment were issued to a nominee of TMT on July 17, 2008 and the shares in respect of the second installment were issued to a nominee of TMT on April 28, 2009.

On November 2, 2007, the Commission declared effective our joint proxy/registration statement filed on Forms F-1/F-4 and on November 27, 2007 we obtained shareholder approval for the acquisition of the initial fleet and for effecting the Redomiciliation Merger as a result of which Star Maritime merged into Star Bulk with Star Maritime merging out of existence and Star Bulk being the surviving entity.  Each share of Star Maritime common stock was exchanged for one share of Star Bulk common stock and each warrant of Star Maritime was assumed by Star Bulk with the same terms and conditions except that each became exercisable for common stock of Star Bulk.  The Redomiciliation Merger became effective after stock markets closed on November 30, 2007 and the common shares and warrants of Star Maritime ceased trading on the American Stock Exchange under the symbols SEA and SEA.WS, respectively.  Star Bulk shares and warrants started trading on the Nasdaq Global Select Market on December 3, 2007 under the ticker symbols SBLK and SBLKW, respectively. Immediately following the effective date of the Redomiciliation Merger, TMT and its affiliates owned 30.2% of our outstanding common stock.  Mr. Nobu Su, a former member of our board of directors, exercises voting and investment control over the securities held of record by F5 Capital, a Cayman Islands corporation, which is a nominee of TMT.  F5 Capital filed a Schedule 13D/A on July 29, 2008 reporting beneficial ownership of 7.0% of our outstanding common stock.  All of our warrants expired worthless and ceased trading on the Nasdaq Global Select Market on March 15, 2010.

We began our operations on December 3, 2007 with the delivery of our first vessel Star Epsilon. Three of the eight vessels comprising our initial fleet were delivered to us by the end of December 2007. Additionally, on December 3, 2007, we entered into an agreement to acquire an additional Supramax vessel, Star Kappa from TMT, which was not included in the initial fleet and was delivered to us on December 14, 2007. In 2008, we took delivery of the remaining five vessels that we purchased from TMT, plus an additional four vessels.

Vessel Acquisitions, Dispositions and Other Significant Transactions

Vessel Acquisitions

On January 22, 2008, we entered into an agreement to acquire Star Sigma, a 1991 built Capesize drybulk carrier with a cargo carrying capacity of approximately 184,403 dwt for the aggregate purchase price of $82.6 million, which includes a discount of $1.1 million related to the late delivery of the vessel to us by the sellers. We financed approximately $65.0 million of the purchase price with borrowings under the Piraeus Bank term loan facility dated April 14, 2008, as amended.  Star Sigma is currently operating on a five-year time charter that commenced in March 2009 at a gross daily average charter rate of $38,000.

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On March 11, 2008, we entered into an agreement to acquire Star Omicron, a 2005 built Supramax drybulk carrier with a cargo carry capacity of approximately 53,489 dwt for the aggregate purchase price of $72.0 million. We financed the purchase price through a combination of the proceeds received from the exercise of our warrants, working capital and borrowings under our Piraeus Bank term loan facility dated April 14, 2008, as amended. Following the delivery of this vessel to us in April 2008, it commenced a three-year time charter at a daily hire rate of $43,000.

On May 22, 2008, we entered into an agreement to acquire Star Cosmo, a 2005 built Supramax drybulk carrier with a cargo carry capacity of approximately 52,247 dwt for the aggregate purchase price of $70.2 million, which includes a $1.4 million payment by us to the seller as additional compensation for the early delivery of the vessel to us. We financed the purchase price through a combination of the proceeds received from the exercise of our warrants and borrowings under our Piraeus Bank term loan facility dated July 1, 2008. We currently employ this vessel in the spot market.

On June 3, 2008, we entered into an agreement to acquire Star Ypsilon, a 1991 built Capsize drybulk carrier with a cargo carry capacity of approximately 150,940 dwt for the aggregate purchase price of $86.9 million, which includes a discount of $0.3 million related to the late delivery of the vessel to us by the sellers. We financed the purchase price through a combination of the proceeds received from the exercise of our warrants and borrowings under our Piraeus Bank term loan facility dated April 14, 2008, as amended.

On February 18, 2010, we entered into an agreement to acquire from an unaffiliated third party, a 2000 built, 171,000 dwt., Capesize drybulk carrier Nord-Kraft (to be renamed Star Aurora) vessel for approximately $42.5 million.  We financed the purchase of this vessel with a combination of cash and borrowings under our Commerzbank AG term loan facility dated September 3, 2010.  In March 2010, we entered into a time charter agreement with Rio Tinto for the Star Aurora for a period of approximately three years at a gross daily rate of $27,500, which commenced upon the delivery of the Star Aurora to us in September 2010.

On March 24, 2010, we entered into an agreement with Hanjin Heavy Industries to build a 180,000 dwt Capesize vessel for $53.6 million with a scheduled delivery in September 2011.  We have also entered into a ten year time charter agreement for this vessel with STX Panocean at a gross daily hire of $24,750.

On April 6, 2010, we entered into an agreement with Hanjin Heavy Industries to build an additional 180,000 dwt Capesize vessel for $53.3 million with a scheduled delivery in November 2011. We plan to finance the construction of our two newbuilding vessels with a combination of cash and borrowings under our Credit Agricole Corporate and Investment Bank term loan facility dated January 20, 2011.

Vessel Dispositions

On April 24, 2008, we entered into an agreement to sell Star Iota for gross proceeds of $18.4 million less $1.8 million of costs associated with the sale. We delivered this vessel to its purchasers on October 6, 2008.

On July 21, 2009, we entered into an agreement to sell the Star Alpha to an unaffiliated third party for gross proceeds of approximately $19.9 million.  We classified the Star Alpha as an asset held for sale during the third quarter 2009 and as a result recorded an impairment loss of $75.2 million during the year ended December 31, 2009. We delivered the vessel to its new owners on December 21, 2009.

On January 18, 2010, we entered into an agreement to sell the Star Beta to an unaffiliated third party for gross proceeds of approximately $22.0 million.  We classified the Star Beta as an asset held for sale during the first quarter 2010 and as a result recorded an impairment loss of $34.9 million during the year ended December 31, 2010. We delivered the vessel to its new owners on July 7, 2010.

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Other Significant Transactions

In March 2009 and December 2009, we entered into agreements with our lenders to obtain waivers for certain covenants including minimum asset coverage covenants contained in our loan agreements.  Please see "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."

On February 23, 2010, our board of directors adopted a new stock repurchase plan for up to $30.0 million to be used for repurchasing the Company's common shares until December 31, 2011.  All repurchased common shares shall be cancelled and removed from the Company's share capital.  We expect the plan to be effective when our lenders remove the relevant covenant from our loan agreements. On March 15, 2010, our 5,916,150 outstanding warrants expired worthless and ceased trading on the Nasdaq Global Select Market.

B.           Business overview

Introduction

We are an international company providing worldwide transportation of drybulk commodities through our vessel-owning subsidiaries for a broad range of customers of major and minor bulk cargoes including iron ore, coal, grain, cement and fertilizer. We were incorporated in the Marshall Islands on December 13, 2006 as a wholly-owned subsidiary of Star Maritime Acquisition Corp., or Star Maritime. We merged with Star Maritime on November 30, 2007 and commenced operations on December 3, 2007, which was the date we took delivery of our first vessel.

Our Fleet

We own and operate a fleet of 13 vessels consisting of five Capesize drybulk carriers, including two Capesize newbuildings that are currently being constructed at Hanjin Heavy Industries, and eight Supramax drybulk carriers with an average age of 10.6years and a combined cargo carrying capacity of approximately 1,287,686 dwt. Our fleet carries a variety of drybulk commodities including coal, iron ore, and grains, or major bulks, as well as bauxite, phosphate, fertilizers and steel products, or minor bulks. We charter all of our vessels on medium- to long-term time charters with an average remaining term of approximately 1.9 years, other than Star Cosmo and Star Omicron that are currently employed in the spot market.

The following table presents summary information concerning our fleet as of March 21, 2011:

Vessel Name	Vessel Type	Size (dwt.)		Year Built		Daily Gross Hire Rate		Type/ Minimum Remaining Term
Star Gamma(1)	Supramax		53,098		2002	$	17,000	Time charter/ 0.3 year
Star Delta	Supramax		52,434		2000	$	14,000	Time charter/ 0.7 year
Star Epsilon	Supramax		52,402		2001	$	16,100	Time charter/ 0.7 year
Star Zeta	Supramax		52,994		2003	$	42,500	Time charter/ 0.1 year
Star Theta	Supramax		52,425		2003	$	19,000	Time charter/ 0.6 year
Star Kappa	Supramax		52,055		2001	$	14,500	Time charter/ 0.5 year
Star Sigma (2)	Capesize		184,403		1991	$	38,000	Time charter/ 2.6 years
Star Omicron	Supramax		53,489		2005	$	Spot
Star Cosmo (4)	Supramax		52,247		2005	$	Spot

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Star Ypsilon	Capesize	150,940	1991	$	13,000	Time charter/ 0.6 years
Star Aurora	Capesize	171,199	2000	$	27,500	Time charter/ 2.3 years
Newbuildings
Hull PN-063 (tbr Star Borealis) (3)	Capesize	180,000	2011	$	24,750	Time charter/ 10 years commencing upon delivery which is expected in September 2011
Hull PN-064 (tbr Star Polaris) (3)	Capesize	180,000	2011			Expected delivery in November 2011

(1)	On February 18, 2011 we received a letter from KLC, the charterer of the vessel Star Gamma, requesting an agreement on adjustment of charter hire. Additionally, we were notified of the commencement of rehabilitation proceedings of KLC in Korea and the related schedule for making claims against KLC in those proceedings. The charter with KLC has a term that ends in December 2011. As of February 18, 2011, KLC owed us approximately $1.8 million in charterhire related to this vessel. We have asserted liens in respect of certain amounts due to KLC under sub-charters relating to this vessel. On March 10, 2011, we received a letter from KLC announcing the termination of the charterparty, effective immediately. Following the termination, we immediately entered into a time charter contract commencing March 10, 2011 with STX Pan Ocean for the vessel for a period of four to six months, at a gross daily rate of $17,000.
(2)	On May 21, 2009, we amended the existing time charter agreement for the Star Sigma with the existing charterer, to a minimum of 56 months and a maximum of 61 months, at a gross daily rate of $38,000. The new time charter agreement was effective as of May 1, 2009 and replaced the existing charter dated March 6, 2008, which was for a minimum of 36 months and a maximum of 41 months, at an average daily rate of $63,000. In addition, the amended time charter agreement includes an index-based profit sharing arrangement effective as of March 1, 2012, pursuant to which the charterer is obligated to pay us, in addition to the above daily rate, 50% of the amount by which the Baltic Capesize Index rate exceeds $49,000.
(3)	On March 24, 2010 and April 6, 2010, we entered into two contracts with Hanjin Heavy Industries for the construction of two Capesize vessels at an aggregate construction price of $106.9 million with scheduled deliveries in September and November 2011, respectively.
(4)	On March 24, 2011, we entered into a time charter contract with SK Shipping for the vessel Star Cosmo, for a period of eleven to thirteen months, at a gross daily rate of $16,500. The new charter party is expected to commence on April 5, 2011.

We actively manage the deployment of our fleet on time charters, which generally can last up to several years. We charter all of our vessels on medium- to long-term time charters with an average remaining term of approximately 1.9 years, other than the Star Cosmo and Star Omicron that are currently employed in the spot market. Under time charters, the charterer pays voyage expenses such as port, canal and fuelcosts.  Wepay for vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, as well as for commissions.  We are also responsible for the drydocking costs relating to each vessel. Our vessels operate worldwide within the trading limits imposed by our insurance terms and do not operate in areas where United States, European Union or United Nations sanctions have been imposed.

Competition

Demand for drybulk carriers fluctuates in line with the main patterns of trade of the major drybulk cargoes and varies according to changes in the supply and demand for these items. We compete with other owners of drybulk carriers in the Capesize, and Supramax size sectors. Ownership of drybulk carriers is highly fragmented and is divided among approximately 1,500 independent drybulk carrier owners. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an owner and operator.

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Our wholly owned subsidiary, Star Bulk Management arranges our charters (whether voyage charters, period time charters, bareboat charters or pools) through the use of a worldwide network of shipbrokers, who negotiate the terms of the charters based on market conditions.  These shipbrokers advise Star Bulk Management on a continuous basis of the availability of cargo for any particular vessel. There may be several shipbrokers involved in any one charter. The negotiation for a charter typically begins prior to the completion of the previous charter in order to avoid any idle time. The terms of the charter are based on industry standards.

Customers

As of December 31, 2010, our vessels were chartered as follows: Rio Tinto for Star Aurora, KLC for Star Gamma and Star Cosmo, GMI for Star Delta and Star Omicron, Cargill for Star Theta and Star Kappa, Norden A/S for Star Zeta and Star Epsilon, Pacific Bulk for Star Sigma, and Augustea for Star Ypsilon.  For the year ended December 31, 2010, we derived 87% of our voyage revenues from six of our customers. See " – Our Fleeet" above for information concerning the charter agreement with KLC for the vessel Star Gamma.

Seasonality

Demand for vessel capacity has historically exhibited seasonal variations and, as a result, fluctuations in charter rates.  This seasonality may result in quarter-to-quarter volatility in our operating results for vessels trading in the spot market.  The drybulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere.  As a result, our revenues from our drybulk carriers may be weaker during the fiscal quarters ended June 30 and September 30, and, conversely, our revenues from our drybulk carriers may be stronger in fiscal quarters ended December 31 and March 31. Seasonality in the sector in which we operate could materially affect our operating results and cash available for dividends in the future.

Management of the Fleet

As of December 31, 2010, we had thirty-one employees. Twenty-nine of our employees, through Star Bulk Management and Starbulk S.A., were engaged in the day to day management of the vessels in our fleet. Star Bulk Management and Starbulk S.A. perform operational and technical management services for the vessels in our fleet, including chartering, marketing, capital expenditures, personnel, accounting, paying vessel taxes and maintaining insurance.  Our Chief Executive Officer and Chief Financial Officer are also the senior management of Star Bulk Management. Star Bulk Management employs such number of additional shore-based executives and employees designed to ensure the efficient performance of its activities.

We reimburse and/or advance funds as necessary to Star Bulk Management and Starbulk S.A. in order for our managers to conduct their activities and discharge their obligations, at cost.  We also maintain working capital reserves as may be agreed between us and Star Bulk Management from time to time.

Star Bulk Management is responsible for the management of the vessels. Star Bulk Management's responsibilities include, inter alia, locating, purchasing, financing and selling vessels, deciding on capital expenditures for the vessels, paying vessels' taxes, negotiating charters for the vessels, managing the mix of various types of charters, developing and managing the relationships with charterers and the operational and technical managers of the vessels. Star Bulk Management subcontracts certain vessel management services to Star Bulk S.A. and Union Commercial Inc.

Starbulk S.A., our wholly owned subsidiary, provides the technical and crew management of all of our vessels other than Star Cosmo.  Technical management includes maintenance, drydocking, repairs, insurance, regulatory and classification society compliance, arranging for and managing crews, appointing technical consultants and providing technical support. Star Bulk Management has entered into an agreement with Union Commercial Inc, or Union to provide the technical and crew management for the Star Cosmo.  Under that agreement, we pay a daily fee of $450, which is reviewed two months before the beginning of each calendar year. The agreement continues indefinitely unless either party terminates the agreement upon two months' written notice or a certain termination event occurs.

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Crewing

Star Bulk Management is responsible for recruiting, either directly or through a technical manager or a crew manager, the senior officers and all other crew members for the vessels in our fleet.  Star Bulk Management has the responsibility to ensure that all seamen have the qualifications and licenses required to comply with international regulations and shipping conventions, and that the vessels are manned by experienced and competent and trained personnel. Star Bulk Management is also responsible for insuring that seafarers' wages and terms of employment conform to international standards or to general collective bargaining agreements to allow unrestricted worldwide trading of the vessels.  Since January 19, 2010, Star Bulk Management and Starbulk S.A., our wholly owned subsidiaries, gradually started to provide in-house crewing management to our vessels. As of March 21, 2011, Star Bulk Management and Starbulk S.A. provide the crewing management for all of our vessels, other than the Star Cosmo.

The International Drybulk Shipping Industry

Drybulk cargo is cargo that is shipped in large quantities and can be easily stowed in a single hold with little risk of cargo damage. In 2010, based on preliminary figures, Clarksons estimates that approximately 5.4 billion tons of drybulk cargo was transported by sea.

The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in turn is influenced by trends in the global economy. The demand for drybulk carriers is determined by the volume and geographical distribution of seaborne dry bulk trade, which in turn is influenced by trends in the global economy. During the 1980s and 1990s seaborne dry bulk trade increased by 1-2% per annum. However, between 2000 and 2010, seaborne dry bulk trade increased at a compound annual growth rate of 4.0%. The global drybulk carrier fleet may be divided into four categories based on a vessel's carrying capacity.  These categories consist of:

· Capesize vessels, which have carrying capacities of more than 85,000 dwt. These vessels generally operate along long-haul iron ore and coal trade routes. There are relatively few ports around the world with the infrastructure to accommodate vessels of this size.

· Panamax vessels have a carrying capacity of between 60,000 and 85,000 dwt. These vessels carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. Panamax vessels are able to pass through the Panama Canal making them more versatile than larger vessels.

· Handymax vessels have a carrying capacity of between 35,000 and 60,000 dwt. The subcategory of vessels that have a carrying capacity of between 45,000 and 60,000 dwt are called Supramax. These vessels operate along a large number of geographically dispersed global trade routes mainly carrying grains and minor bulks. Vessels below 60,000 dwt are sometimes built with on-board cranes enabling them to load and discharge cargo in countries and ports with limited infrastructure.

· Handysize vessels have a carrying capacity of up to 35,000 dwt. These vessels carry exclusively minor bulk cargo. Increasingly, these vessels have operated along regional trading routes. Handysize vessels are well suited for small ports with length and draft restrictions that may lack the infrastructure for cargo loading and unloading.

The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss.  As of March 1, 2011, the global drybulk carrier orderbook amounted to 269.7 million dwt, or 49.4% of the existing fleet at that time, with most vessels on the orderbook expected to be delivered within 48 months. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. Drybulk carriers at or over 25 years old are considered to be scrapping candidate vessels.

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Charterhire Rates

Charterhire rates paid for drybulk carriers are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and between the different drybulk carrier categories. However, because demand for larger drybulk carriers is affected by the volume and pattern of trade in a relatively small number of commodities, charterhire rates (and vessel values) of larger ships tend to be more volatile than those for smaller vessels.

In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption. In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as delivery and redelivery regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues and no canals to transit.

Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

Within the drybulk shipping industry, the charterhire rate references most likely to be monitored are the freight rate indices issued by the Baltic Exchange. These references are based on actual charterhire rates under charter entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. The Baltic Panamax Index is the index with the longest history. The Baltic Capesize Index and Baltic Handymax Index are of more recent origin.

Charterhire rates have fallen sharply from the highs recorded in 2008. The BDI a daily average of charter rates in 26 shipping routes measured on a time charter and voyage basis and covering Supramax, Panamax, and Capesize drybulk carriers, declined from a high of 11,793 in May 2008 to a low of 663 in December 2008, which represents a decline of 94%.  The BDI fell over 70% during the month of October, 2008, alone.  During 2009, the BDI remained volatile, reaching a low of 772 on January 5, 2009 and a high of 4,661 on November 19, 2009. During 2010, the BDI ranged from a high of 4,209 in May 2010 to a low of 1,700 in July 2010. Following a short period of increase in the third quarter of 2010, the BDI fell to near July 2010 levels at the end of 2010. The BDI decreased further in 2011 to 1,262 as of March 1, 2011. This downturn in drybulk charter rates and their volatility, which has resulted from the economic dislocation worldwide and the disruption of the credit markets, has had and may continue to have a number of adverse consequences for drybulk shipping.

Vessel Prices

Newbuilding prices are determined by a number of factors, including the underlying balance between shipyard output and capacity, raw material costs, freight markets and sometimes exchange rates. In the last few years high levels of new ordering were recorded across all sectors of shipping. As a result, most of the major shipyards in Japan, South Korea and China had full orderbooks until the end of 2010, although the downturn in freight rates and the lack of funding to the wider global financial crisis will lead to some of these orders being cancelled or delayed.

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Newbuilding prices have increased significantly since 2003, due to tightness in shipyard capacity, high levels of new ordering and stronger freight rates. However, with the sudden and steep decline in freight rates, after August 2008, secondhand values and lack of new vessel ordering, started to decline. In the secondhand market, the steep increase in newbuilding prices and the strength of the charter market have also affected values, to the extent that prices rose sharply in 2004/2005, before dipping in the early part of 2006, only to rise thereafter to new highs in the first half of 2008. However, the sudden and sharp downturn in freight rates since August 2008 has had a very negative impact on secondhand values. Since then secondhand values have risen by more than 39%.  Currently secondhand values are approximately 14% above the low reached during 2008 and remain well below the highs of 2008.

Environmental and Other Regulations in the Drybulk Shipping Industry

Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.

A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard, harbor master or equivalent), classification societies; flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or temporarily suspend the operation of one or more of our vessels.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact, such as the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, could result in additional legislation or regulation that could negatively affect our profitability.

International Maritime Organization

The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by ships, or the IMO, has adopted the International Convention for the Prevention of Marine Pollution, 1973, as modified by the related Protocol of 1978 relating thereto, which has been updated through various amendments, or the MARPOL Convention. The MARPOL Convention establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. The IMO adopted regulations that set forth pollution prevention requirements applicable to drybulk carriers. These regulations have been adopted by over 150 nations, including many of the jurisdictions in which our vessels operate.

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In September 1997, the IMO adopted Annex VI to the MARPOL Convention, Regulations for the Prevention of Pollution from Ships, to address air pollution from ships. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits deliberate emissions of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. We believe that all our vessels are currently compliant in all material respects with these regulations. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition. In October 2008, the IMO adopted amendments to Annex VI regarding nitrogen oxide and sulfur oxide emissions standards which are expected to enter into force on July 1, 2010. The amended Annex VI would reduce air pollution from vessels by, among other things, (i) implementing a progressive reduction of sulfur oxide emissions from ships, with the global sulfur cap reduced initially to 3.50% (from the current cap of 4.50%), effective from January 1, 2012, then progressively to 0.50%, effective from January 1, 2020, subject to a feasibility review to be completed no later than 2018; and (ii) establishing new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. U.S. air emissions standards are now equivalent to these amended Annex VI requirements, and once these amendments become effective, we may incur costs to comply with these revised standards.

Safety Management System Requirements

IMO also adopted the International Convention for the Safety of Life at Sea, or SOLAS and the International Convention on Load Lines, or the LL Convention, which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards. We believe that all our vessels are in substantial compliance with SOLAS and LL Convention standards.

Under Chapter IX of SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, our operations are also subject to environmental standards and requirements contained in the ISM Code promulgated by the IMO. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical manager have developed for compliance with the ISM Code. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. As of the date of this filing, each of our vessels is ISM code-certified.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel's management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by classification societies under the authority of each flag state, under the ISM Code. Both Starbulk S.A. and our appointed ship managers have obtained documents of compliance for their offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance, or the DOC, and safety management certificate, or the SMC, are renewed every five years but the DOC is subject to audit verification annually and the SMC at least every 2.5 years.

Pollution Control and Liability Requirements

IMO has negotiated international conventions that impose liability for oil pollution in international waters and the territorial waters of the signatory to such conventions. For example, IMO adopted an International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast water exchange requirements (beginning in 2009), to be replaced in time with mandatory concentration limits. The BWM Convention will not become effective until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping. To date there has not been sufficient adoption of this standard for it to take force.  However, the IMO's Marine Environment Protection Committee passed a resolution in March 2010 encouraging the ratification of the Convention and calling upon those countries that have already ratified to encourage the installation of ballast water management systems. If mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe that the costs of compliance with a mandatory mid-ocean ballast exchange would be material, it is difficult to predict the overall impact of such a requirement on our operations.

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Although the United States is not a party to these conventions, many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended in 2000, or the CLC. Under this convention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel's registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain defenses. The limits on liability outlined in the 1992 Protocol use the International Monetary Fund currency unit of Special Drawing Rights, or SDR. Under an amendment to the 1992 Protocol that became effective on November 1, 2003, for vessels between 5,000 and 140,000 gross tons (a unit of measurement for the total enclosed spaces within a vessel), liability is limited to approximately $7.01 million (4.51 million SDR) plus $980.44 (631 SDR) for each additional gross ton over 5,000. For vessels of over 140,000 gross tons, liability is limited to $139.48 million (89.77 million SDR). As the convention calculates liability in terms of a basket of currencies, these figures are based on currency exchange rates of 0.643590 SDR per U.S. dollar on February 3, 2010. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner's actual fault and under the 1992 Protocol where the spill is caused by the shipowner's intentional or reckless conduct. Vessels trading with states that are parties to these conventions must provide evidence of insurance covering the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or in a manner similar to that of the convention. We believe that our protection and indemnity insurance will cover the liability under the plan adopted by the IMO.

In March 2006, the IMO amended Annex I to MARPOL, including a new regulation relating to oil fuel tank protection, which became effective August 1, 2007. The new regulation will apply to various ships delivered on or after August 1, 2010. It includes requirements for the protected location of the fuel tanks, performance standards for accidental oil fuel outflow, a tank capacity limit and certain other maintenance, inspection and engineering standards.

The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on shipowners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention, which became effective on November 21, 2008, requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship's bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.

IMO regulations also require owners and operators of vessels to adopt Ship Oil Pollution Emergency Plans. Periodic training and drills for response personnel and for vessels and their crews are required.

Compliance Enforcement

The flag state, as defined by the United Nations Convention on Law of the Sea, has overall responsibility for the implementation and enforcement of international maritime regulations for all ships granted the right to fly its flag. The "Shipping Industry Guidelines on Flag State Performance" evaluates flag states based on factors such as sufficiency of infrastructure, ratification of international maritime treaties, implementation and enforcement of international maritime regulations, supervision of surveys, casualty investigations and participation at IMO meetings. All of our vessels are flagged in the Marshall Islands.  Marshall Islands flagged vessels have historically received a good assessment in the shipping industry. We recognize the importance of a credible flag state and do not intend to use flags of convenience or flag states with poor performance indicators.

Noncompliance with the ISM Code or other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code by the applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificate will be maintained.

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The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

The U.S. Oil Pollution Act of 1990 and Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, whether on land or at sea. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels. OPA defines these other damages broadly to include:

· natural resources damage and the costs of assessment thereof;

· real and personal property damage;

· net loss of taxes, royalties, rents, fees and other lost revenues;

· lost profits or impairment of earning capacity due to property or natural resources damage;

· net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and

· loss of subsistence use of natural resources.

Effective July 31, 2009, the U.S. Coast Guard adjusted the limits of OPA liability for non-tank vessels to the greater of $1,000 per gross ton or $0.85 million per non-tank (e.g. drybulk) vessel that is over 3,000 gross tons (subject to periodic adjustment for inflation). CERCLA, which applies to owners and operators of vessels, contains a similar liability regime and provides for cleanup, removal and natural resource damages. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $0.5 million for any other vessel. These OPA and CERCLA limits of liability do not apply if an incident was directly caused by violation of applicable U.S. federal safety, construction or operating regulations or by a responsible party's gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.

OPA and the U.S. Coast Guard also require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the limit of their potential liability under OPA and CERCLA. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, self-insurance or a guaranty. We plan to comply with the U.S. Coast Guard's financial responsibility regulations by providing a certificate of responsibility evidencing sufficient self-insurance.

We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage it could have an adverse effect on our business and results of operation.

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OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states, which have enacted such legislation, have not yet issued implementing regulations defining vessels owners' responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call. We believe that we are in substantial compliance with all applicable existing state requirements. In addition, we intend to comply with all future applicable state regulations in the ports where our vessels call.

Other Environmental Initiatives

The U.S. Clean Water Act, or CWA, prohibits the discharge of oil or hazardous substances in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In addition, most U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

The U.S. Environmental Protection Agency, or the EPA, regulates the discharge of ballast water and other substances in U.S. waters under the CWA.  Effective February 6, 2009, EPA regulations require vessels 79 feet in length or longer (other than commercial fishing and recreational vessels) to comply with a Vessel General Permit authorizing ballast water discharges and other discharges incidental to the operation of vessels.  The Vessel General Permit imposes technology and water-quality based effluent limits for certain types of discharges and establishes specific inspection, monitoring, recordkeeping and reporting requirements to ensure the effluent limits are met. U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U..S. waters, and the Coast Guard recently proposed new ballast water management standards and practices, including limits regarding ballast water releases.  Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, and/or otherwise restrict our vessels from entering U.S. waters.

The U.S. Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1977 and 1990, or the CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Our vessels that operate in such port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft State Implementation Plans, or SIPs, designed to attain national health-based air quality standards in primarily major metropolitan and/or industrial areas. Several SIPs regulate emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. As indicated above, our vessels operating in covered port areas are already equipped with vapor recovery systems that satisfy these existing requirements.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.

Greenhouse Gas Regulation

The IMO is evaluating various mandatory measures to reduce greenhouse gas emissions from international shipping, which may include market-based instruments or a carbon tax.  Any passage of climate control legislation or other regulatory initiatives by the IMO, EU, the U.S. or other countries where we operate that restrict emissions of greenhouse gases could require us to make significant financial expenditures that we cannot predict with certainty at this time.

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Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the U.S. Maritime Transportation Security Act of 2002, or the MTSA came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new chapter became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly created International Ship and Port Facility Security Code, or the ISPS Code. The ISPS Code is designed to protect ports and international shipping against terrorism. After July 1, 2004, to trade internationally, a vessel must attain an International Ship Security Certificate from a recognized security organization approved by the vessel's flag state. Among the various requirements are:

· on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;

· on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;

· the development of a ship security plan;

· ship identification number to be permanently marked on a vessel's hull;

· a continuous synopsis record kept onboard showing a vessel's history including the name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and

· compliance with flag state security certification requirements, which are reviewed every five years and are subject to intermediate verification every 2.5 years.

The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt from MTSA vessel security measures non-U.S. vessels that have on board, as of July 1, 2004, a valid International Ship Security Certificate attesting to the vessel's compliance with SOLAS security requirements and the ISPS Code. Our managers intend to implement the various security measures addressed by MTSA, SOLAS and the ISPS Code, and we intend that our fleet will comply with applicable security requirements. We have implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Code.

Inspection by Classification Societies

Every oceangoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

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For maintenance of the class certification, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:

Annual Surveys. For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant and where applicable for special equipment classed, at intervals of 12 months from the date of commencement of the class period indicated in the certificate.

Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys may be carried out on the occasion of the second or third annual survey.

Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including the electrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a shipowner has the option of arranging with the classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle. Upon a shipowner's request, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.

All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years. Vessels under five years of age can waive drydocking in order to increase available days and decrease capital expenditures, provided the vessel is inspected underwater.

Most vessels are also drydocked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a "recommendation" which must be rectified by the shipowner within prescribed time limits.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society which is a member of the International Association of Classification Societies. All our vessels are certified as being "in class" by RINA a major classification society..  All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Liability Insurance

The operation of any drybulk vessel includes risks such as mechanical failure, hull damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental incidents, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market.

We maintain hull and machinery insurance, war risks insurance, protection and indemnity cover, and freight, demurrage and defense cover for our fleet in amounts that we believe to be prudent to cover normal risks in our operations. However, we may not be able to achieve or maintain this level of coverage throughout a vessel's useful life. Furthermore, while we believe that the insurance coverage that we will obtain is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

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Hull & Machinery and War Risks Insurance

We maintain marine hull and machinery and war risks insurance, which includes the risk of actual or constructive total loss, for all of our vessels. Our vessels are each covered up to at least fair market value with deductibles of $100,000—$150,000 per vessel per incident. We also maintain increased value coverage for most of our vessels. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, which insure liabilities to third parties in connection with our shipping activities. This includes third-party liability and other related expenses resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal. Our P&I coverage is subject to and in accordance with the rules of the P&I Association in which the vessel is entered. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or "clubs." Our coverage is limited to approximately $4.25 billion, except for pollution which is limited $1 billion and passenger and crew which is limited to $3 billion.

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The fourteen P&I Associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each P&I Association has capped its exposure to this pooling agreement at $4.25 billion. As a member of a P&I Association which is a member of the International Group, we are subject to calls payable to the associations based on the group's claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Associations comprising the International Group.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and the age of a vessel. We have been able to obtain all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business.

C.           Organizational structure

As of December 31, 2010, we are the sole owner of all of the outstanding shares of the subsidiaries listed in Note 1 of our consolidated financial statements under Item 18. "Financial Statements."

D.           Property, plant and equipment

We do not own any real property. Our interests in the vessels in our fleet are our only material properties. See Item 4. "Information on the Company—Our Fleet."

Item 4A.  Unresolved Staff Comments

None.

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Item 5.    Operating and Financial Review and Prospects

Overview

The following management's discussion and analysis of financial condition and results of operations should be read in conjunction with "Item 3. Key Information – Selected Financial Data", "Item 4. Information on the Company" and our historical consolidated financial statements and accompanying notes included elsewhere in this report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled "Risk Factors" and elsewhere in this report.

We are an international company providing worldwide transportation solutions in the drybulk sector through our vessels-owning subsidiaries for a broad range of customers of major and minor bulk cargoes including iron ore, coal, grain, cement, and fertilizer, along worldwide shipping routes.

A.           Operating Results

Factors Affecting Our Results of Operations

We charter all of our vessels on medium- to long-term time charters with terms of approximately one to four years, other than the Star Cosmo and Star Omicron that are currently employed in the spot market.  Under our time charters, the charterer typically pays us a fixed daily charterhire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and canal charges. We remain responsible for paying the chartered vessel's operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, and we also pay commissions to affiliated and unaffiliated ship brokers and to in-house brokers associated with the charterer for the arrangement of the relevant charter.

On January 20, 2009, we entered into a COA with Vale or the First Vale COA.  Under the terms of the First Vale COA, we transported approximately 700,000 metric tons of iron ore between Brazil and China in four separate Capesize vessel shipments. In November 2009, we chartered-in a Capesize vessel from a third party for a minimum of three months and a maximum of five months at a gross daily rate of $50,000 to complete the fourth shipment under the First Vale COA. We completed all shipments related to the First Vale COA during 2010.  On July 14, 2009, we entered into a second COA with Vale, or the Second Vale COA. Under the terms of the Second Vale COA, we expect to transport approximately 1,280 to 1,360 metric tons of iron ore between Brazil and China in eight separate Capesize vessel shipments, four shipments of which are complete.  On April 13, 2010, we entered into an agreement with Augustea Atlantica SpA  to perform the remaining first four shipments under the Second Vale COA. COAs relate to the carriage of multiple cargoes over the same route and enables the COA holder to nominate different ships to perform individual voyages. Essentially, it constitutes a number of voyage charters to carry a specified amount of cargo during the term of the COA, which usually spans a number of years. All of the vessel's operating, voyage and capital costs are borne by the ship owner. The freight rate is generally set on a per cargo ton basis.  Although the vessels in our fleet are primarily employed on medium- to long-term time charters ranging from one to five years, we may employ these and additional vessels under COAs, bareboat charters, in the spot market or in drybulk carrier pools in the future.

We believe that the important measures for analyzing trends in the results of operations consist of the following:

· Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

· Ownership days are the total calendar days each vessel in the fleet was owned by us for the relevant period.

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· Available days are the total calendar days the vessels were in possession for the relevant period after subtracting for off-hire days  relating to drydocking or special or intermediate surveys.

· Voyage days are the total days the vessels were in our possession for the relevant period after subtracting all off-hire days incurred for any reason (including off-hire for drydocking, major repairs, special or intermediate surveys).

· Fleet utilization is calculated by dividing voyage days by available days for the relevant period and takes into account the dry-docking periods.

The following table reflects our voyage days, ownership days, fleet utilization and TCE rates for the periods indicated:

(TCE rates expressed in U.S. dollars)	Year Ended		Year Ended
	December 31, 2009		December 31, 2010
Average number of vessels		11.97		10.81
Number of vessels in operation (as of the last day of the periods reported)		11		11
Average age of operational fleet (in years)		10.0		10.4
Ownership days		4,370		3,945
Available days		4,240		3,847
Voyage days for fleet		4,117		3,829
Fleet Utilization		97%		99%
Time charter equivalent rate	$	29,450	$	26,859

Time Charter Equivalent (TCE)

Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses and amortization of fair value of above/below market acquired time charter agreements) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts..  We included below TCE revenues, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Investors also consider TCE rate in order to compare our Company's earnings performance with our peer group of companies. Our calculation of TCE may not be comparable to that reported by other companies.

The following table reflects the calculation of our TCE rates and reconciliation of TCE revenue to voyage revenue as reflected in the consolidated statement of operations:

(In thousands of Dollars)	Year Ended December 31, 2008			Year Ended December 31, 2009			Year Ended December 31, 2010
Voyage revenues		238,883			142,351			121,042
Less:
Voyage expenses		(3,504	)		(15,374	)		(16,839)
Amortization of fair value of above/below market acquired time charter agreements		(80,533	)		(5,735	)		(1,360)

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Time Charter equivalent revenues	154,846	121,242	102,843
Total voyage days for fleet	3,618	4,117	3,829
Time charter equivalent (TCE) rate (in Dollars)	42,799	29,450	26,859

Voyage Revenues

Voyage revenues are driven primarily by the number of vessels in our fleet, the number of voyage days and the amount of daily charterhire, or time charter equivalent, that our vessels earn under period charters, which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the seaborne transportation market and other factors affecting spot market charter rates for vessels.

Vessels operating on time charters for a certain period of time provide more predictable cash flows over that period of time, but can yield lower profit margins than vessels operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in charter rates although we would be exposed to the risk of declining vessel rates, which may have a materially adverse impact on our financial performance. If we employ vessels on period time charters, future spot market rates may be higher or lower than the rates at which we have employed our vessels on period time charters.

Vessel Voyage Expenses

Voyage expenses include hire paid for chartered-in vessels, port and canal charges, fuel (bunker) expenses and brokerage commissions payable to related and third parties.

Our voyage expenses primarily consist of hire paid for chartered-in vessels and commissions paid for the chartering of our vessels.

Vessel Operating Expenses

Vessel operating expenses include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes, regulatory fees, technical management fees and other miscellaneous expenses. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crew wages, bunkers and insurance, may also cause these expenses to increase. Technical vessel managers established an operating expense budget for each vessel and perform the day-to-day management of the vessels. Star Bulk Management monitors the performance of each of the technical vessel managers by comparing actual vessel operating expenses with the operating expense budget for each vessel. We are responsible for the costs of any deviations from the budgeted amounts.

Depreciation

We depreciate our vessels on a straight-line basis over their estimated useful lives determined to be 25 years from the date of their initial delivery from the shipyard. Depreciation is based on cost less the estimated residual value.

Vessel Management

Our vessels operate worldwide within the trading limits imposed by our insurance terms and do not operate in areas where United States, European Union or United Nations sanctions have been imposed.

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We reimburse and/or advance funds as necessary to Star Bulk Management and Starbulk S.A. in order for them to conduct their activities and discharge their obligations, at cost. We also maintain working capital reserves as may be agreed between us and Star Bulk Management and Starbulk S.A. from time to time.

Star Bulk Management our wholly owned subsidiary is responsible for the management of the vessels. Star Bulk Management's responsibilities include, inter alia, locating, purchasing, financing and selling vessels, deciding on capital expenditures for the vessels, paying vessels' taxes, negotiating charters for the vessels, managing the mix of various types of charters, developing and managing the relationships with charterers and the operational and technical managers of the vessels. Star Bulk Management subcontracts certain vessel management services to Star Bulk S.A. and Union Commercial Inc.

Starbulk S.A., our wholly owned subsidiary provides the technical and crew management of all of our vessels other than Star Cosmo.  Technical management includes maintenance, drydocking, repairs, insurance, regulatory and classification society compliance, arranging for and managing crews, appointing technical consultants and providing technical support.  Star Bulk Management has entered into an agreement with Union Commercial Inc, or Union to provide the technical and crew management for the Star Cosmo.  Under that agreement, we pay a daily fee of $450, which is reviewed two months before the beginning of each calendar year. The agreement continues indefinitely unless either party terminates the agreement upon two months' written notice or a certain termination event occurs.

Please see Item 4. "Information on the Company – History and development of the Company – Management of the Fleet" for a discussion of our management fees.

General and Administrative Expenses

We incur general and administrative expenses, including our onshore personnel related expenses, legal and accounting expenses.

Interest and Finance Costs

We defer financing fees and expenses incurred upon entering into our credit facility and amortize them to interest and financing costs over the term of the underlying obligation using the effective interest method.

Interest income

We earn interest income on our cash deposits with our lenders.

Inflation

Inflation does not have a material effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrative and financing costs.

Foreign Exchange Fluctuations

Please see Item 11.  "Quantitative and Qualitative Disclosures about Market Risk."

Special or Intermediate Survey and Drydocking Costs

We utilize the direct expense method, under which we expense all drydocking costs as incurred.

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Lack of Historical Operating Data for Vessels before Their Acquisition by Us

Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, there is no historical financial due diligence process when we acquire vessels. Accordingly, we do not obtain the historical operating data for the vessels from the sellers because that information is not material to our decision to make vessel acquisitions, nor do we believe it would be helpful to potential investors in our stock in assessing our business or profitability. Most vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel's classification society records. The standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, the technical management agreement between the seller's technical manager and the seller is automatically terminated and the vessel's trading certificates are revoked by its flag state following a change in ownership.

Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired with or without charter) as the acquisition of an asset rather than a business, which we believe to be in accordance with applicable US GAAP and Commission rules. Where a vessel has been under a voyage charter, the vessel is delivered to the buyer free of charter, and it is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. All of the vessels in our current fleet have been acquired with time charters attached, with the exception of the Star Beta, the Star Sigma, the Star Aurora and the Star Omicron. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer's consent and the buyer entering into a separate direct agreement (called a "novation agreement") with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter because it is a separate service agreement between the vessel owner and the charterer.

Where we identify any intangible assets or liabilities associated with the acquisition of a vessel, we allocate the purchase price of acquired tangible and intangible assets based on their relative fair values. Where we have assumed an existing charter obligation or entered into a time charter with the existing charterer in connection with the purchase of a vessel with the time charter agreement at charter rates that are less than market charter rates, we record a liability, based on the difference between the assumed charter agreement rate and the market charter rate for an equivalent charter agreement. Conversely, where we assume an existing charter obligation or enter into a time charter with the existing charterer in connection with the purchase of a vessel with the charter agreement at charter rates that are above prevailing market charter rates, we record an asset, based on the difference between the market charter rate and the assumed contracted charter rate for an equivalent vessel. This determination is made at the time the vessel is delivered to us, and such assets and liabilities are amortized to revenue over the remaining period of the charter.

When we purchase a vessel and assume or renegotiate a related time charter, we must take the following steps before the vessel will be ready to commence operations:

· obtain the charterer's consent to us as the new owner;

· obtain the charterer's consent to a new technical manager;

· in some cases, obtain the charterer's consent to a new flag for the vessel;

· arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;

· replace all hired equipment on board, such as gas cylinders and communication equipment;

· negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;

· register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;

· implement a new planned maintenance program for the vessel; and

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· ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

The following discussion is intended to help you understand how acquisitions of vessels affect our business and results of operations.

Our business is comprised of the following main elements:

· employment and operation of our drybulk vessels; and

· management of the financial, general and administrative elements involved in the conduct of our business and ownership of our drybulk vessels.

The employment and operation of our vessels require the following main components:

· vessel maintenance and repair;

· crew selection and training;

· vessel spares and stores supply;

· contingency response planning;

· onboard safety procedures auditing;

· accounting;

· vessel insurance arrangement;

· vessel chartering;

· vessel security training and security response plans (ISPS);

· obtain ISM certification and audit for each vessel within the six months of taking over a vessel;

· vessel hire management;

· vessel surveying; and

· vessel performance monitoring.

The management of financial, general and administrative elements involved in the conduct of our business and ownership of our vessels requires the following main components:

· management of our financial resources, including banking relationships (i.e., administration of bank loans and bank accounts);

· management of our accounting system and records and financial reporting;

· administration of the legal and regulatory requirements affecting our business and assets; and

· management of the relationships with our service providers and customers.

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  The principal factors that affect our profitability, cash flows and shareholders' return on investment include:

· rates and periods of charterhire;

· levels of vessel operating expenses;

· depreciation and amortization expenses;

· financing costs; and

· fluctuations in foreign exchange rates.

Critical Accounting Policies

We make certain estimates and judgments in connection with the preparation of our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States, or US GAAP, that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. We have described below what it believes will be the most critical accounting policies that involve a high degree of judgment and the methods of their application.

Impairment of long-lived assets.  We follow guidance related to Impairment or Disposal of Long-lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, we should evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value. In this respect, management regularly reviews the carrying amount of the vessels on vessel by vessel basis when events and circumstances indicate that the carrying amount of the vessels might not be recoverable.  As of December 31, 2008, 2009 and 2010, we performed an impairment review of our vessels due to the global economic downturn and the prevailing conditions in the shipping industry.  We compared undiscounted cash flows to the carrying values for our vessels to determine if the assets were impaired.  Our management's subjective judgment is required in making assumptions that are used in forecasting future operating results used in this method.  Such judgment is based on historical trends as well as future expectations regarding future charter rates, vessel operating expenses and fleet utilization that were applied over the remaining useful life of the vessel.  Expected expenditures for scheduled vessels' maintenance and vessels' operating expenses are based on historical data and adjusted annually for inflation.  The Company has assumed no change in the remaining useful life of the current fleet.  These estimates are consistent with the plans and forecasts used by management to conduct our business.  As a result of this analysis, no assets were considered to be impaired, and we did not recognize any impairment charge for our vessels other than Star Iota which was classified as held for sale during the year ended December 31, 2008 Star Alpha during the year ended December 31, 2009 and Star Beta during the year ended December 31, 2010.

Vessel Acquisitions.  Vessels are stated at cost, which consists of the purchase price and any material expenses incurred upon acquisition, such as initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage. Financing costs incurred during the construction period of the vessels are also capitalized and included in the vessels' cost. Otherwise these amounts are charged to expense as incurred.

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The aggregate purchase price paid for the eight vessels in our initial fleet from certain subsidiaries of TMT consisted of cash and our common shares. The stock consideration was measured based on the fair market value of  the shares at the time each vessel was delivered.  The additional stock consideration of 1,606,962 common shares was measured when TMT's performance under the Master Agreement was complete when it delivered the last of the eight vessels in our initial fleet on March 7, 2008. The aggregate purchase price, which consisted of cash and stock consideration, was allocated to the acquired vessels based on the relative fair values of the vessels on their respective dates of delivery to us.

Depreciation. The cost of each of our vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value. Management estimates the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted. Depreciation expense is calculated based on cost less the estimated residual scrap value. We estimate scrap value by taking the cost of steel times the weight of the ship noted in lightweight ton, or lwt. There was no change in this estimate during the years ending December 31, 2008, 2009 and 2010 and we believe there will be no change in the near future.

Fair value of above/below market acquired time charter: We record all identified tangible and intangible assets associated with the acquisition of a vessel or liabilities at their relative fair value.  Fair value of above or below market acquired time charters is determined by comparing existing charter rates in the acquired time charter agreements with the market rates for equivalent time charter agreements prevailing at the time the foregoing vessels are delivered. The present values representing the fair value of the above or below market acquired time charters are recorded as an intangible asset or liability, respectively.  Such intangible asset or liability is recognized ratably as an adjustment to revenues over the remaining term of the assumed time charter.

As a result of downturn in the shipping industry during the fourth quarter of 2008, we revised our original assumptions of the latest available redelivery dates used in determining the term of its below and above market acquired time charter agreements. Under the guidance related to Accounting Changes and Error Corrections this revision was treated as a change in accounting estimate and was accounted for prospectively beginning October 1, 2008. The unamortized balance of below market acquired time charter agreements was amortized on an accelerated basis assuming the earliest redelivery dates of vessels under existing time charter agreements. This change had a positive impact on revenue of $13.0 million for the year ended December 31, 2008.

Due to early time charter terminations the remaining unamortized balances of the intangible assets and liabilities associated with such below or above market acquired time charters where recognized as "Gain on time charter agreement termination" or "Loss on time charter agreement termination" in the consolidated statements of operations for years ended December 31, 2008 and 2009. Refer to note 7 of our consolidated financial statements.

Equity incentive plan awards.Stock-based compensation represents vested and non-vested restricted shares granted to employees and directors, for their services as directors, and is included in "General and administrative expenses" in the consolidated statements of operations. These shares are measured at their fair value equal to the market value of our common stock on the grant date. The shares that do not contain any future service vesting conditions are considered vested shares and a total fair value of such shares is expensed on the grant date. The shares that contain a time-based service vesting conditions are considered non-vested shares on the grant date and a total fair value of such shares is recognized using the accelerated method.

We currently assume that all non-vested shares will vest. We do not include estimated forfeitures in determining the total stock-based compensation expense because we estimate the forfeitures of non-vested shares to be immaterial and we did not have forfeitures in the past. We will, however, re-evaluate the reasonableness of our assumption at each reporting period. We pay dividends on all non-vested shares regardless of whether they have has vested and there is an obligation of the employee to return the dividend when employment ceases. The retained dividends on restricted share grantee awards that are expected to vest were charged to retained earnings.

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Results of Operations

Year ended December 31, 2010 compared to the year ended December 31, 2009

Voyage Revenues: Voyage revenues for the years ended December 31, 2010 and 2009, were approximately $121.0 million and $142.4 million, respectively.  This decrease is mainly due to lower average TCE rates, a non-US GAAP measure representing time charter equivalent daily cash rates earned from chartering of our vessels, during the year ended December 2010 as compared to the year ended December 31, 2009. During the year ended December 31, 2010, we earned $26,859 TCE rate per day as compared to $29,450 TCE rate per day for the year ended December 31, 2009 due to the decrease in prevailing charter rates at which a number of our vessels were chartered. Charterhire rates were volatile in 2009 and 2010 and continue to be volatile. During 2009, the BDI remained volatile, reaching a low of 772 on January 5, 2009 and a high of 4,661 on November 19, 2009. The BDI decreased to 2,571 on February 12, 2010 primarily due to uncertainty in the freight markets. The BDI experienced a modest recovery again in 2010 based on strong demand for commodities from Asia and a recovering global market. During 2010, the BDI went from a high on May 26, 2010 of 4,209 and fell to a low of 1,700 on July 15, 2010.  At December 31, 2010, the index was 1,773. This decrease is primarily due to increases in vessel supply. Furthermore the average number of vessels operated decreased from 12.0 in 2009 to 10.8 in 2010. In addition, we recorded lower revenue of $4.3 million associated with the amortization of fair value of below market acquired time charters, attached to vessels acquired, over the remaining period of the time charters.

Voyage Expenses: For the years ended December 31, 2010 and 2009, voyage expenses, were approximately $16.8 million and $15.4 million, respectively. Consistent with drybulk industry practice, we paid broker commissions ranging from 0% to 2.50% of the total daily charterhire rate of each charter to ship brokers associated with the charter, depending on the number of brokers involved with arranging the charter. Voyage expenses also consist of hire paid for chartered-in vessels, port, canal and fuel costs. There was an increase of $1.4 million in voyage expenses in 2010 as compared to 2009. The increase is mainly due to higher charter-in vessels expenses during 2010 amounting to $11.2 million as compared to $6.7 million for the year 2009. All other voyage expenses such as bunkers, port expenses and commissions were lower in 2010 amounting to $5.6 million in aggregate as compared to $8.7 million in 2009.

Vessel Operating Expenses: For the years ended December 31, 2010 and 2009, our vessel operating expenses were approximately $22.3 million and $30.2 million, respectively. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. The decrease is mainly due to more cost efficient in-house management which was fully implemented during the year ended December 31, 2010 and the decrease in the number of vessels that operated during the year ended December 31, 2010, compared to the same period of 2009.

Drydocking Expenses: For the year ended December 31, 2010 and 2009, our drydocking expenses were $6.6 million and $6.1 million, respectively. Four vessels underwent their periodic drydocking survey during both years ended December 31, 2010 and 2009.

Depreciation: We depreciate our vessels based on a straight line basis over the expected useful life of each vessel, which is 25 years from the date of their initial delivery from the shipyard. Depreciation is based on the cost of the vessel less its estimated residual value, which is estimated at $200 per lwt, at the date of the vessel's acquisition. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. For the years ended December 31, 2010 and 2009, we recorded vessel depreciation charges of approximately $46.9 million and $58.3 million, respectively. The decrease was primarily due to the operation of a smaller fleet.

Vessel Impairment Loss: On January 18, 2010, we agreed to sell the Star Beta, a vessel from our initial fleet, to a third party for a contracted sales price of $22.0 million.  We delivered this vessel to its purchasers on July 7, 2010.  Star Beta was classified as asset held for sale during the first quarter of 2010 which resulted in an impairment loss of $34.9 million as the vessel was recorded at the lower of its carrying amount or fair value less cost to sell.

On July 21, 2009, we agreed to sell the Star Alpha, a vessel from our initial fleet, to a third party for a contracted sale price of $19.9 million.  We delivered this vessel to its purchasers on December 21, 2009.  Star Alpha was classified as asset held for sale during the third quarter of 2009 which resulted in an impairment loss of $75.2 million as the vessel was recorded at the lower of its carrying amount or fair value less cost to sell.

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Gain/loss on derivative: During the years ended December 31, 2010 and 2009, the change in fair market value and the settlements of our FFAs and bunker swaps resulted in a loss of $2.1 million and a loss of $2.2 million, respectively.

Gain on time charter agreement termination:During the year ended December 31, 2010, we did not record any gain on time charter agreement termination. However, during the year ended December 31, 2009:

i) Star Alpha, which was on time charter at a gross daily charter rate of $47,500 per day for the period from January 9, 2008 until March 18, 2009, and was redelivered to us by its charterers approximately two months prior to the earliest redelivery date per the time charter agreement.  Under the accounting provisions applicable to intangible assets, we recognized a gain on a time charter agreement termination of $10.1 million, which relates to the unamortized fair value of below market acquired time charter on the vessel redelivery date.

ii) Star Theta was also redelivered to us by its charterers on March 15, 2009, approximately twenty-nine days prior to the earliest redelivery date per the time charter agreement.  We recognized a gain on time charter agreement termination amounting to $0.8 million.  In addition, we received $0.3 million from its charterers relating to the early termination of this charter party, which was also recorded as a gain on time charter termination in the consolidated statements of operations for the year ended December 31, 2009.

Loss on time charter agreement termination: During the year ended December 31, 2010 we did not record any loss on time charter agreement termination. However, during the year ended December 31, 2009:

i) The vessel Star Kappa, which was on time charter at an average gross daily charter rate of $25,500 per day for the period from April 12, 2009 until July 12, 2014, was redelivered to us by its charterers prior to the earliest redelivery date per the time charter agreement. We recognized the loss on time charter agreement termination of $0.9, which relates to the unamortized fair value of above-market acquired time charter on the vessel redelivery date.

ii) The vessel Star Ypsilon, which was on time charter at an average gross daily charter rate of $91,932 per day for the period from September 18, 2008 until July 4, 2011, was redelivered to us by its charterers prior to the earliest redelivery date per the time charter agreement. We recognized the loss on time charter agreement termination of $10.1 million, which relates to the unamortized fair value of above-market acquired time charter on the vessel redelivery date. In addition, we recognized a gain amounting to $5.0 million which represents the deferred revenue from the terminated time charter contract.

Other Operating income: During the fourth quarter of 2010, we recognized a gain of $21.6 million from a claim settlement related to the early termination of the time charter of the vessel Star Ypsilon that occurred in July 2009 and $5 million from our sale of a 45% interest in the future proceeds related to the settlement of several commercial claims.

Loss on bad debts: The amount of $2.1 million is related to unpaid hire from a charterer of the vessel Star Alpha that was written off during the year 2010.

General and Administrative Expenses: For the years ended December 31, 2010 and 2009, we incurred general and administrative expenses of approximately $15.4 million and $8.7 million, respectively. This increase is mainly due to higher professional fees and increased stock-based compensation expenses.For the year ended December 31, 2010, our general and administrative expenses include the salaries and other related costs of the executive officers and other employees ($3.7 million), rents, legal, accounting costs and consultancy fees, regulatory compliance costs and other miscellaneous expenses ($5.2 million) and costs related to non-vested stock grants under the equity incentive plan ($6.5 million).  For the year ended December 31, 2009, our general and administrative expenses include the salaries and other related costs of the executive officers and other employees ($3.3 million), our office renovation costs and rents, legal, accounting costs and consultancy fees, regulatory compliance costs ($3.6 million)  and costs related to non-vested stock grants under the equity incentive plan ($1.8 million).

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Interest Expenses and Finance Costs: For the year ended December 31, 2010 and 2009, our interest and finance costs under our term loan facilities totaled approximately $5.9 million and $9.9 million, respectively. This decrease is mainly due to lower weighted average interest rates in 2010 amounting to 2.66% as compared to 3.33% for 2009, as well as due to lower average loan balances outstanding in 2010 amounting to $220.1 million as compared to $273.1 million for 2009.

Interest Income: For the years ended December 31, 2010 and 2009, interest income was $0.5 million and $0.8 million, respectively.

Year ended December 31, 2009 compared to the year ended December 31, 2008

Voyage Revenues: Voyage revenues for the years ended December 31, 2009 and 2008 were approximately $142.4 million and $238.9 million, respectively.  This decrease is mainly due to the decreased amortization of fair value of below/above market acquired time charters to $5.7 million for the year ended December 31, 2009 compared to $80.5 million for the year ended December 31, 2008.  Although the average number of vessels was increased to 11.97 vessels for the year ended December 31, 2009 as compared to 10.76 vessels for the year ended December 31, 2008, lower charter rates earned for most of our vessels during 2009 resulted in a decrease in the average TCE rate, a non US GAAP measure, which was $29,450 per day during the year ended December 31, 2009 as compared to $42,799 per day for the year ended December 31, 2008. For further information concerning our calculation of TCE rate, please see Item 5. "Operating and Financial Review and Prospects - Operating Results."

Voyage Expenses: For the years ended December 31, 2009 and 2008, voyage expenses, which mainly consisted of commissions payable to brokers for the year 2008, were approximately $15.4 million and $3.5 million, respectively. Consistent with drybulk industry practice, we paid broker commissions ranging from 0% to 2.50% of the total daily charterhire rate of each charter to ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. Voyage expenses also consist of hire paid for chartered-in vessels, port, canal and fuel costs. There was an increase of $11.9 million in voyage expenses in 2009 as compared to 2008. The increase is mainly due to the fact that on September 13, 2009 we chartered-in the vessel Star Beta from its charterer to serve the third shipment under the COA with Vale and on November 6, 2009 we also chartered-in a third party vessel to serve the fourth shipment under the same COA.

Vessel Operating Expenses: For the years ended December 31, 2009 and 2008, our vessel operating expenses were approximately $30.2 million and $26.2 million, respectively. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. The increase in operating expenses during the year ended December 31, 2009, was primarily due to the operation of a larger fleet, higher initial storing and spares purchasing as a matter of necessity for shortages identified following the change of management of our vessels.

Drydocking Expenses: For the year ended December 31, 2009 and 2008, our drydocking expenses were $6.1 million and $7.9 million. During the years ended December 31, 2009 and 2008, four and five vessels, respectively, underwent their periodic drydocking survey. In 2008 one vessel underwent unscheduled repairs.

Depreciation: For years ended December 31, 2009 and 2008, we recorded vessel depreciation charges of approximately $58.3 million and $51.1 million, respectively. The increase was primarily due to the operation of a larger fleet.

Vessel Impairment Loss: On July 21, 2009, we agreed to sell the Star Alpha, a vessel from our initial fleet, to a third party for a contracted sale price of $19.9 million.  We delivered this vessel to its purchasers on December 21, 2009.  Star Alpha was classified as asset held for sale during the third quarter of 2009 which resulted in an impairment loss of $75.2 million as the vessel was recorded at the lower of its carrying amount or fair value less cost to sell.

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On April 24, 2008, we entered into an agreement to sell the Star Iota for gross proceeds of $18.4 million less $1.8 million of costs associated with the sale.  We delivered this vessel to its purchasers on October 6, 2008.  The Star Iota was classified as a vessel held for sale during the first quarter of 2008 which resulted in an impairment loss of $3.6 million as the vessel was recorded at the lower of its carrying amount or fair value less cost to sell.

Gain/loss on derivative: Effective December 2008, we entered into several FFAs on the Capesize and Panamax index.  We also entered into bunkers swap agreements during the fourth quarter of 2009. During the years ended December 31, 2009 and 2008, both the change in fair market value and the settlements of our FFAs and bunker swaps resulted in a loss of $2.2 million and a gain of $0.25 million, respectively.

Gain on time charter agreement termination:Star Alpha, which was on time charter at a gross daily charter rate of $47,500 per day for the period from January 9, 2008 until March 18, 2009, and was redelivered to us by its charterers approximately two month prior to the earliest redelivery date per the time charter agreement.  Under the accounting provisions applicable to intangible assets, we recognized a gain on a time charter agreement termination of $10.1 million, which relates to the unamortized fair value of below market acquired time charter on the vessel redelivery date.

Star Theta was also redelivered to us by its charterers on March 15, 2009, approximately twenty-nine days prior to the earliest redelivery date per the time charter agreement.  We recognized a gain on time charter agreement termination amounting to $0.8 million.  In addition, we received $0.3 million from its charterers relating to the early termination of this charter party, which was also recorded as a gain on time charter termination in the consolidated statements of operations for the year ended December 31, 2009.

The Star Sigma, which was on time charter to a Japanese charterer at a gross daily charter rate of $100,000 per day from April 2008 until March 2009 (earliest redelivery), was redelivered to us earlier, in mid-November 2008, pursuant to an agreement whereby the charterer agreed to pay the contracted rate less $8,000 per day, which is the approximate operating cost for the vessel, from the date of the actual redelivery in November 2008 through March 1, 2009.  This amount net of commissions was approximately $9.7 million, which was collected and recorded as a gain on time charter termination in the consolidated statements of operations for the year ended December 31, 2008.

Loss on time charter agreement termination: The vessel Star Kappa, which was on time charter at an average gross daily charter rate of $25,500 per day for the period from April 12, 2009 until July 12, 2014, was redelivered to us by its charterers prior to the earliest redelivery date per the time charter agreement. We have recognized the loss on time charter agreement termination of $0.9, which relates to the unamortized fair value of above-market acquired time charter on the vessel redelivery date.

The vessel Star Ypsilon, which was on time charter at an average gross daily charter rate of $91,932 per day for the period from September 18, 2008 until July 4, 2011, was redelivered to us by its charterers prior to the earliest redelivery date per the time charter agreement. We have recognized the loss on time charter agreement termination of $10.1 million, which relates to the unamortized fair value of above-market acquired time charter on a vessel redelivery date. In addition, we recognized a gain amounting to $5.0 million which represents the deferred revenue from the terminated time charter contract.

General and Administrative Expenses: For the years ended December 31, 2009 and 2008, we incurred general and administrative expenses of approximately $8.7 million and $12.4 million, respectively. For the year ended December 31, 2009, our general and administrative expenses include the salaries and other related costs of the executive officers and other employees ($3.3 million), our office renovation costs and rents, legal, accounting costs and consultancy fees, regulatory compliance costs ($3.6 million related to professional fees) and costs related to non-vested stock grants under the equity incentive plan ($1.8 million). Furthermore, for the year ended December 31, 2008, our general and administrative expenses include the salaries and other related costs of the executive officers and other employees ($2.9 million), our office renovation costs and rents, legal, accounting costs and consultancy fees, regulatory compliance costs ($3.8 million related to professional fees) and costs related to non-vested stock grants under the equity incentive plan ($4.0 million).

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Interest Expenses and Finance Costs: For the year ended December 31, 2009 and 2008, our interest and finance costs under our term loan facilities totaled approximately $9.9 million and $10.2 million, respectively. Although the weighted average interest decreased in 2009 to 3.33% from 4.39% for 2008, the average loan outstanding increased in 2009 to $273.1 million as compared to $217.1 million for 2008.

Interest Income: For the years ended December 31, 2009 and 2008, interest income was $0.8 million and $1.2 million, respectively.

B.           Liquidity and Capital Resources

Our principal source of funds has been equity provided by our shareholders, long-term borrowing, and operating cash flow.  Our principal use of funds has been capital expenditures to establish and grow our fleet, maintain the quality of our drybulk carriers, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, make interest and principal repayments on outstanding loan facilities, and pay dividends.

Our short-term liquidity requirements relate to servicing our debt, payment of operating costs, funding working capital requirements and maintaining cash reserves against fluctuations in operating cash flows and paying cash dividends when permissible. Sources of short-term liquidity include our revenues earned from our charters.

We believe that our current cash balance, our operating cash flows and our undrawn amounts under our Credit Agricole Corporate and Investment Bank Loan Facility dated January 20, 2010 will be sufficient to meet our 2011 liquidity needs despite that the drybulk charter market declined sharply beginning in the third quarter of 2008 and has remained at depressed levels throughout 2009, 2010 and 2011 to date. Our results of operations have been and may in the future be adversely affected if market conditions do not improve.

Our medium- and long-term liquidity requirements include funding the equity portion of any possible investments in additional vessels and repayment of long-term debt balances. Sources of funding for our medium- and long-term liquidity requirements include new loans or equity issuance or vessel sales. As of December 31, 2010, we had outstanding borrowings of $204.8 million. As of March 21, 2011, we had outstanding borrowings of $217.7 million under our loan facilities.  Under our current credit facilities, $48.6 million is still undrawn which is the maximum available amount under our current loan facilities. We expect to drawdown this amount during 2011.  If the current conditions in the credit market continue, we may not be able to refinance our existing credit facilities or secure new credit facilities at all or on terms agreeable to us.

We may fund possible growth through our cash balances, operating cash flows, additional long-term borrowing and the issuance of new equity.  Our practice has been to acquire drybulk carriers using a combination of funds from operations and bank debt secured by mortgages on our drybulk carriers. Our business is capital-intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newer drybulk carriers and the selective sale of older drybulk carriers. These acquisitions will be principally subject to management's expectation of future market conditions as well as our ability to acquire drybulk carriers on favorable terms.  As of December 31, 2010, we had no capital committments to acquire vessels but had capital commitments of $64.1 million related to the construction of our two newbuildings. We intend to finance the construction of these two newbuildings with a combination of cash and borrowings under our Credit Agricole Corporate and Investment Bank term loan facility dated January 20, 2011.

As of December 31, 2010, we had cash and cash equivalents of approximately $12.8 million excluding $25.6 million of restricted cash due to minimum liquidity covenants and cash collateral requirements contained in our amended loan agreements.

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Cash Flows

For the year ended December 31, 2010, cash and cash equivalents decreased to $12.8 million compared to $40.1 million for the year ended December 31, 2009, which is primarily due to increased capital expenditures in 2010 compared to 2009. Our working capital is equal to current assets minus current liabilities, including the current portion of long-term debt.  Our working capital deficit was $19.3 million for the year ended December 31, 2010, compared to a working capital deficit of $10.3 million for the year ended December 31, 2009.  Our working capital deficit primarily increased due to the significant decrease of both cash and cash equivalents and short term restricted cash by $34.1 million.  This decrease during 2010 is mainly from the payment of the equity portion related to our newbuildings which amounted to $42.8 million and the equity portion related to the acquisition of the second hand vessel Star Aurora which amounted to $18.0 million. In addition, short term loan payable also decreased from $59.7 million as at December 31, 2009 to $33.8 million as at December 31, 2010.

If our working capital deficit continues to exist, lenders may be unwilling to provide future financing or will provide future financing at significantly increased interest rates, which will negatively affect our earnings, liquidity and capital position.

For the year ended December 31, 2010, current and non-current restricted cash decreased to $25.6 million compared to $38.3 million as of December 31, 2009. For further information please see Item 5. "Operating and Financial Review and Prospects – Senior Secured Credit Facilities".  We believe that our current cash balance and our operating cash flow will be sufficient to meet our current liquidity needs.

Year ended December 31, 2010 compared to year ended December 31, 2009

 Net Cash Provided By Operating Activities

Net cash provided by operating activities for the year ended December 31, 2010 and 2009, was $87.9 million and $65.9 million, respectively. Cash flows generated by the operation of our fleet increased mainly due to $21.6 million in cash collected in connection with the settlement of the Star Ypsilon claim in 2010 and our sale of a 45% interest in the future proceeds related to the settlement of several commercial claims for $5 million. Furthermore, vessels operating expenses decreased by approximately 26% for the year ended December 31, 2010 mainly due to more efficient in-house management and the operation of a smaller fleet. This was offset by the operation of a lower average number of vessels of 10.8 for the year ended December 31, 2010 compared to 12.0 for the year ended December 31, 2009 and lower average TCE rates, (a non-US GAAP measure representing TCE daily cash rates earned from chartering our vessels) as a result of the decline in the drybulk vessel shipping industry. During the year ended December 31, 2010, we earned $26,859 TCE rate per day as compared to $29,450 TCE rate per day for the year ended December 31, 2009.

Net Cash Used In Investing Activities

Net cash used in investing activities for the year ended December 31, 2010 and 2009 was $60.2 million and $1.4 million, respectively.  Net cash used in investing activities for the year ended December 31, 2010, was primarily due to increased to vessel costs mainly related to the acquisition of the Star Aurora amounting to $44.1 million plus installments related to our two newbuildings amounting to $43.5 million in aggregate and offset by a net decrease in restricted cash amounting to $7.0 million and by the proceeds from the sale of Star Beta amounting to $20.3 million. Net cash used in investing activities for the year ended December 31, 2009, was primarily a result of the proceeds from the sale of vessel Star Alpha amounting to $19.1 million offset by an increase in restricted cash of $20.5 million relating to the waivers obtained for existing loan agreements.

Net Cash Used In Financing Activities

Net cash used in financing activities for the year ended December 31, 2010 and 2009 was $55.1 million and $53.8 million respectively. For the year ended December 31, 2010, net cash used in financing activities consisted of loan installment payments amounting to $68.4 million, cash dividend payments of $12.4 million and financing fees amounting to $0.3 million offset by proceeds from new loans related to the acquisition of Star Aurora amounting to $26.0 million. For the year ended December 31, 2009, net cash used in financing activities consisted of loan installment payments amounting to $49.3 million and cash dividend payments of $6.2 million, offset by cash provided from our directors' dividend reinvestment of $1.9 million.

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Year ended December 31, 2009 compared to year ended December 31, 2008

Net Cash Provided By Operating Activities

Net cash provided by operating activities for the year ended December 31, 2009 and 2008 was $65.9 million and $110.7 million, respectively. The decrease in cash provided by operating activities was primarily due to a decrease in cash flows generated by the operation of our fleet despite an increase in the average number of vessels to 11.97 for the year ended December 31, 2009 from 10.76 for the year ended December 31, 2008 due to lower average TCE rates as a result of the decline in the drybulk vessel shipping industry. During the year ended December 31, 2009, we earned $29,450 TCE rate per day as compared to $42,799 TCE rate per day for the year ended December 31, 2008 mainly due to lower charter rates for most of our vessels as imposed by the market. In accordance with the terms of the charter parties for the vessels operating under time charters, hire is received approximately 15 days in advance, whereas freight voyages are settled during or at the end of the voyage. Collection terms have not changed compared to prior years.  Furthermore, vessel operating expenses increased by approximately 15% for the year ended December 31, 2009 mostly due to operation of a larger fleet. In addition, during the year ended December 31, 2008, we collected approximately $9.7 million in charter agreement termination fees from a charterer due to early vessel redelivery.

Net Cash Used In Investing Activities

Net cash used in investing activities for the years ended December 31, 2009 and 2008 was $1.4 million and $423.3 million, respectively.  Net cash used in investing activities for the year ended December 31, 2009 was primarily a result of the proceeds from sale of vessel Star Alpha amounting to $19.1 million offset by an increase in restricted cash of $20.5 million relating to the waivers obtained for existing loan agreements.  For the year ended December 31, 2008 the cash used in investing activities related mainly to the payment of the cash consideration of $413.5 million for our initial fleet and additional vessels, $14.4 million related to the purchase price allocated to the above-market time charters and 12.0 million related to an increase in restricted cash, which was offset by $16.6 million which represented proceeds from the sale of the Star Iota.

Net Cash Provided By/ Used In Financing Activities

Net cash used in financing activities for the year ended December 31, 2009 was $53.8 million as compared to $323.0 million of net cash provided by financing activities for the year ended December 31, 2008. For the year ended December 31, 2009, net cash used in financing activities consisted of loan installment payments amounting to $49.3 million and cash dividend payments of $6.2 million, offset by cash provided from our directors' dividend reinvestment of $1.9 million. For the year ended December 31, 2008 net cash provided by financing activities consisted of the drawdown of $317.5 million related to our loan facilities and the proceeds from exercise of warrants of $94.2 million mainly offset by $52.6 million of cash dividends paid, $21.0 million of repayments under our loan agreements and payments of $13.4 million in connection with our repurchase of common stock and warrants.

Senior Secured Credit Facilities

As of December 31, 2010, we had total indebtedness of $204.8 million.

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Commerzbank AG Loan Facility dated December 27, 2007, as amended

On December 27, 2007, we entered into a loan agreement with Commerzbank AG, Commerzbank, in the amount of up to $120.0 million to partially finance the acquisition of the secondhand vessels the Star Gamma, the Star Delta, the Star Epsilon, the Star Zeta, andthe Star Theta, which also provide the security for this loan agreement.  Under the terms of this loan facility, the repayment of $120.0 million is over a nine year term and divided into two tranches. The first tranche of up to $50.0 million is repayable in twenty-eight consecutive quarterly installments commencing twenty-seven months after the initial borrowings but no later than March 31, 2010 as follows: (i) the first four installments amount to $2.25 million each, (ii) the next thirteen installments amount to $1.0 million each (iii) the remaining eleven installments amount to $1.3 million each and a final balloon payment of $13.7 million is payable together with the last installment. The second tranche of up to $70.0 million is repayable in twenty-eight consecutive quarterly installments commencing twenty-seven months after draw down but no later than March 31, 2010 as follows: (i) the first four installments amount to $4.0 million each (ii) the remaining twenty-four installments amount to $1.75 million each and a final balloon payment of $12.0 million is payable together with the last installment. The loan bears interest at LIBOR plus a margin at a minimum of 0.8% per annum to a maximum of 1.25% per annum depending on whether the aggregate drawdown ranges from 60% up to 75% of the aggregate market value of the 'initial fleet'.

This loan contains financial covenants, including requirements to maintain (i) a minimum liquidity of $10.0 million or $1.0 million per vessel, whichever is greater (ii) a market value adjusted equity ratio of not less than 25%, as defined therein and (iii) an aggregate market value of the vessels pledged as security under this loan agreement of not less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

On June 10, 2009, we entered into a supplemental agreement with Commerzbank. Under the terms of this agreement during the waiver period from December 31, 2008 to January 31, 2010, the required loan to value ratio, which is the ratio of outstanding indebtedness to the aggregate market value of the collateral vessels, was amended to 90% from 80% including the value of the additional security that will be provided by us pursuant to the waiver.  In connection with this waiver, as further security for this facility, we agreed to provide a first preferred mortgage on the Star Alpha and a pledge account containing $6.0 million.  During the waiver period LIBOR will be adjusted to the cost of funds, the interest spread was increased to 2%, and the payment of dividend and the repurchase of our common shares and warrants are subject to the prior written consent of the lenders.

On January 27, 2010, we entered into a second supplemental agreement with Commerzbank (we were committed to this agreement as of December 24, 2009). Under the terms of this agreement during the waiver period from February 1, 2010 to June 30, 2010 and from July 1, 2010 to January 31, 2011 the security cover was amended to 111% and 118%, respectively and 135% thereafter. Pursuant to the waiver agreement (i) the bank consented to the sale of the Star Alpha; (ii) we are permitted to pay dividends not exceeding $0.05 per share in each quarter; (iii) the minimum liquidity requirement was reduced from $1.0 million to $0.7 million per vessel (total minimum liquidity of $7.2 million); and (iv) the amount deposited in the pledged account was increased by $1.3 million from $6.0 million to $7.3 million. The interest spread was also maintained to 2.00% per annum for the duration of the waiver period. After the waiver period the minimum liquidity will increase from $0.7 million to $1.0 million for each vessel in our fleet and the pledged amount of $7.3 million will be released.

We were in compliance with the financial covenants in the supplemental agreements as of December 31, 2010.

As of March 21, 2011, the Company had outstanding borrowings of $92.3 million which is the maximum amount of borrowings permitted under this loan facility.

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Piraeus Bank A.E. Loan Facility dated April 14, 2008, as amended

On April 14, 2008, we entered into a loan agreement with Piraeus Bank A.E., or Piraeus Bank, as agent, which was subsequently amended on April 17, 2008 and September 18, 2008. Under the amended terms, the agreement provides for a term loan of $150.0 million to partially finance the acquisition of the Star Omicron, the Star Sigma and the Star Ypsilon.  This loan agreement is secured by the Star Omicron, the Star Beta, andthe Star Sigma. Under the terms of this term loan facility, the repayment period is six years, beginning three months after our first draw down and is divided into twenty-four consecutive quarterly installments as follows: (i) the first installment amounts to $7.0 million, (ii) the second through fifth installments amount to $10.5 million each, (iii) the sixth to eighth installments amount to $8.8 million each, (iv) the ninth through fourteenth installments amount to $4.4 million each, (v) the fifteenth through twenty-fourth installments amount to $2.7 million each, and a final balloon payment in the amount of $21.2 million is payable together with the last installment. The loan bears interest at LIBOR plus a margin of 1.3% per annum. This loan agreement contains financial covenants, including requirements to maintain (i) a minimum liquidity of $0.5 million per vessel, (ii) total indebtedness over the market value of all vessels owned not greater than 0.6:1, (iii) the interest coverage ratio not less than 2:1 and (iv) an aggregate market value of the vessels pledged as security under this loan agreement of not less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

On May 7, 2009, we entered into an agreement with Piraeus Bank to obtain waivers for certain covenants on the following terms: during the waiver period from December 31, 2008 to February 28, 2010, the required security cover ratio, which is the ratio of the aggregate market value of the collateral vessels and the outstanding loan amount, will be waived and for the period ended February 28, 2011, the minimum security cover requirement will be reduced to 110% from 125% of the outstanding loan amount. The lenders also waived the required 60% corporate leverage ratio, which is the ratio of our total indebtedness net of any unencumbered cash divided by the market value of our vessels, through February 28, 2010. In connection with this waiver, as further security for this facility we agreed to provide (i) first preferred mortgages on and first priority assignments of all earnings and insurances of the Star Kappa and the Star Ypsilon; (ii) corporate guarantees from each of the collateral vessel owning limited liability companies; (iii) a subordination of the technical and commercial manager's rights to payment; and (iv) a pledge account containing $9.0 million.

In addition, during the waiver period the interest spread was increased to 2% per annum and thereafter will be adjusted to 1.5% per annum until the margin review date of the facility, and the payment of dividend and the repurchase of our common shares and warrants are subject to the prior written consent of the lenders.

In July 2010 Piraeus Bank consented to the sale of vessel Star Beta. Consequently the first priority mortgage was released and we prepaid $7.0 million in July 2010. The facility is payable beginning on September 1, 2010, in seventeen consecutive quarterly installments: (i) the first installment in the amount of $8.1 million (ii) the second to seventh installments amount to $4.0 million each and (ii) the final ten installments in the amount of $2.5 million each plus a balloon payment of $19.4 million is payable together with the last installment.

We were in compliance with the financial covenants in the amended waiver agreements as of December 31, 2010.

As of March 21, 2011, we had outstanding borrowings of $60.3 million which is the maximum amount of borrowings permitted under this loan facility.

Piraeus Bank A.E. Loan Facility dated July 1, 2008

On July 1, 2008, we entered into a loan agreement with Piraeus Bank, as lender, in the amount of $35.0 to partially finance the acquisition of the Star Cosmo, which also provides the security for this loan agreement. Under the terms of this term loan facility, the repayment of $35.0 million is over six years and begins three months following the full drawn down of the loan amount, which was July 1, 2008, and is divided into twenty-four consecutive quarterly installments as follows: (i) the first through fourth installments amount to $1.5 million each, (ii) the fifth through eighth installments amount to $1.250 million each, (iii) the ninth to twelfth installments amount to $0.875 million each, (iv) the thirteenth through twenty-fourth installments amount to $0.5 million each and a final balloon payment of $14.5 is payable together with the last installment. The loan bears interest at LIBOR plus a margin of 1.325% per annum.

The loan agreement contains financial covenants, including requirements to maintain (i) a minimum liquidity of $0.5 million per vessel, (ii) the total indebtedness of the borrower over the market value of all vessels owned shall not be greater than 0.6:1, (iii) the interest coverage ratio shall not be less than 2:1 and (iv) an aggregate market value of the vessels pledged as security under this loan agreement not less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

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On May 25, 2009, we entered into an amending and restating agreement with Piraeus Bank. Under the terms of this agreement it was agreed during the waiver period from December 31, 2008 to February 28, 2010, the required security cover ratio will be waived. After the end of the waiver period, for the period from February 28, 2010 to February 28, 2011 the minimum security cover requirement will be reduced to 110% from 125% of the outstanding loan amount. The lender will also waive the required 60% corporate leverage ratio through February 28, 2010. In connection with this waiver, as further security for this facility we agreed to provide (i) second preferred mortgages on and second priority assignments of all earnings and insurances of the Star Alpha; (ii) a corporate guarantee from Star Alpha's vessel owning limited liability company; (iii) a subordination of the technical and commercial managers rights to payment; and (iv) a pledge account containing $5.0 million.  This facility is repayable beginning on April 2, 2009, in 22 consecutive quarterly installments: (i) the first two installments in the amount of $2.0 million each; (ii) the third installment in the amount of $1.75 million; (iii) the fourth installment in the amount of $1.25 million; (iv) the fifth through tenth installment in the amount of $875,000 each; and (v) the final 12 installments in the amount of $500,000 each plus a balloon payment of $13.75 million payable with the final installment.

In addition, during the waiver period the interest spread was increased to 2% per annum and thereafter will be adjusted to 1.5% per annum until the margin review date of the facility, and the payment of dividend and the repurchase of our common shares and warrants are subject to the prior written consent of the lenders. In December 2009, Piraeus Bank released the second priority mortgage on the Star Alpha and consented to its sale.

On September 29, 2010 the loan was further amended.  Under the terms of this agreement the security cover shall be at all times 125% of the outstanding loan amount. In addition, this lender released to us $5.0 million that was previously pledged, after we prepaid $2.0 million on October 1, 2010. The facility is payable beginning on October 1, 2010, in sixteen consecutive quarterly installments: (i) the first four installments in the amount of $0.8 million each; and (ii) the final twelve installments in the amount of $0.5 million each plus a balloon payment of $12.6 million is payable together with the last installment.   In addition, the interest spread was adjusted to 3% per annum applicable for the period from August 1, 2010 to December 31, 2011, and thereafter shall be adjusted to 2.5% per annum until the final maturity date of the facility.

We were in compliance with the financial covenants in the amended waiver agreements as of December 31, 2010.

As of March 21, 2011, we had outstanding borrowings of $19.7 million, which is the maximum amount of borrowings permitted under this loan facility.

Commerzbank AG Loan Facility dated September 3, 2010

On September 3, 2010 we entered into a loan agreement with Commerzbank AG in the amount of up to $26.0 million with a term of six years to partially finance the acquisition cost of the secondhand vessel, Star Aurora which was provided as security for this loan agreement.  The loan is payable in twenty-four consecutive quarterly installments of $950,000 commencing three months after the drawdown, and a final balloon payment of $3.2 million payable together with the last installment. The loan bears interest at LIBOR plus a margin of 2.6%.

The loan contains financial covenants, including requirements to maintain (i) a minimum liquidity of $10.0 million or $1.0 million per vessel, whichever is greater (ii) the market value adjusted equity ratio shall not be less than 25%, as defined therein and (iii) a minimum liquidity of $650,000 for this vessel that will increase to $1.0 million when cash pledged due to the Commerzbank waiver dated December 24, 2009 is released (iii) an aggregate market value of the vessel pledged as security under this loan agreement not less than 135% at all times.

As of March 21, 2011, we had outstanding borrowings of $24.1 million, which is the maximum amount of borrowings permitted under this loan facility.

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Credit Agricole Corporate and Investment Bank Loan Facility dated January 20, 2011

On January 20, 2011, we entered into a term loan agreement with Credit Agricole Corporate and Investment Bank for up to $70.0 million to partially finance the construction costs of Hull PN-063 and Hull PN-064 which have also been provided as security for this loan agreement.  The loan will be drawn in three advances per hull, as follows: upon completion of the keel laying, the launching and the delivery of each hull. The loan is for a term of seven years and is payable beginning three months after the delivery of each vessel and is divided into twenty eight consecutive quarterly installments per vessel of $513,000 each and a final balloon payment of $20.65 million which is payable together with the last installment.  The loan bears interest at LIBOR plus a margin of 2.7% per annum.

The loan agreement contains financial covenants, including requirements to maintain (i) a minimum liquidity of $10.0 million or $500,000 per fleet vessel, whichever is greater (ii) the total indebtedness of the borrower over the market value of all vessels owned shall not be greater than 0.7:1, (iii) the minimum asset cover ratio shall not be less than (a)120% during the first two years from delivery of each vessel and (b) 125% of the then outstanding borrowings thereafter.

As of March 21, 2011, we had outstanding borrowings of $21.4 million and $48.6 million of available borrowing capacity under this facility.

Dividend Payments

Under the terms of our waiver agreements with our lenders, payment of dividends and the repurchasing of our common shares is subject to the prior written consent of our lenders.  Please see "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."

With the consent of our lenders, (i) in February 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2009 that was paid on March 12, 2010 to shareholders of record as of March 8, 2010, (ii) in May 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ended March 31, 2010 that was paid on June 4, 2010 to shareholders of record on May 31, 2010,  (iii) in August 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending June 30, 2010 that was paid on August 30, 2010 to shareholders of record as of August 25, 2010, (iv) in November 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending September 30, 2010 that was paid on December 3, 2010 to shareholders of record as of November 30, 2010, and (v) in February 2011, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2010 that was paid on March 9, 2011 to shareholders of record as of March 4, 2011.

C.           Research and Development, Patents and Licenses

Not Applicable.

D.           Trend Information

Please see Item 5.A, "Operating Results - Factors Affecting Our Results of Operations."

E.           Off-balance Sheet Arrangements

As of the date of this annual report, we do not have any off-balance sheet arrangements.

F.           Tabular Disclosure of Contractual Obligations

The following table presents our contractual obligations as of December 31, 2010:

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In thousands of Dollars	Payments due by period
Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years (After January 1, 2016)
Principal Loan Payments(1)		274,829		34,298		62,808		80,686		97,037
Interest payments (1) (2)		28,607		5,941		11,223		6,971		4,472
Operating lease obligation(3)		2,436		211		455		500		1,270
Newbuildings		64,128		64,128		-		-		-
Total		370,000		104,578		74,486		88,157		102,779

(1)	Based on our outstanding indebtedness as of December 31, 2010 including the term loan with Credit Agricole Corporate and Investment Bank, which we agreed to enter in December 2010. We have assumed that the maximum available amount will be drawn down under all of our credit facilities for purposes of this calculation.
(2)	Based on an estimated interest rate of 2.66% which is the weighted average interest rate on all our outstanding indebtedness for the year ended December 31, 2010.
(3)	In April 2008, we entered into a twelve-year operating lease for our new office facilities which will expire in April 2020.  For the first year our monthly lease payments are $21,300 (€14,500). In December 2010, the operating lease was amended. The new agreement provides for an approximate 12% decrease in the monthly lease. Our monthly payments are adjusted annually according to the inflation rate (which is estimated at 3%) plus 2% as provided per the lease agreement.

G.           Safe Harbor

See section "forward looking statements" at the beginning of this annual report.

Item 6.   Directors, Senior Management and Employees

A.           Directors, Senior Management and Employees

Set forth below are the names, ages and positions of our directors, executive officers and key employees. The board of directors is elected annually on a staggered basis, and each director elected holds office until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected.

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Messrs Tsirigakis and Syllantavos were re-elected as Class C directors at the 2010 annual general meeting in November 2010. In accordance with the Company's Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, on February 1, 2011, the Board decided to increase the number of its directors from seven (7) to eight (8) and appointed Mr. Spyros Capralos, our Chief Executive Officer and President to fill the vacancy created by the increase in the size of the Board until his successor is duly elected and qualified at our 2011 annual general meeting.

Name	Age	Position
Spyros Capralos	55	Chief Executive Officer, President and Director
George Syllantavos	47	Chief Financial Officer, Secretary and Class C Director
Petros Pappas	57	Chairman and Class A Director
Prokopios (Akis) Tsirigakis	55	Class C Director
Tom Søfteland	49	Class A Director
Peter Espig	44	Class B Director
Koert Erhardt	53	Class B Director
Milena Pappas	27	Class B Director

Spyros Capralos serves and has served since February 7, 2011 as our Chief Executive Officer, President and director. From October 2004 to October 2010, Mr. Capralos served as Chairman of the Athens Exchange and Chief Executive Officer of the Hellenic Exchanges Group and was the President of the Federation of European Securities Exchanges. He was formerly Vice Chairman of the National Bank of Greece, Vice Chairman of Bulgarian Post Bank, Managing Director of the Bank of Athens and has a ten year banking experience with Bankers Trust Company (now Deutsche Bank) in Paris, New York, Athens, Milan, London. He is the current President of the Hellenic Olympic Committee and served as Secretary General of the Athens 2004 Olympics Games and Executive Director and Deputy Chief Operating Officer of the Organizing Committee for the Athens 2004 Olympic Games. He studied Economics at the University of Athens and earned his Master Degree in Business Administration from INSEAD University in France.

George Syllantavos serves and has served since our inception as our Chief Financial Officer, Secretary and director. He served as Star Maritime's Chief Financial Officer, Secretary and a member of its board of directors since its inception. From May 1999 to December 2007, he was the President and General Manager of Vortex Ltd., an aviation consulting firm specializing in strategic and fleet planning. From January 1998 to April 1999, he served as a financial advisor to Hellenic Telecommunications Organization S.A., where, on behalf of the Chief Executive Officer, he coordinated and led the company's listing on the New York Stock Exchange (NYSE:OTE) and where he had responsibilities for the strategic planning and implementation of multiple acquisitions of fixed-line telecommunications companies, including RomTelecom. Mr. Syllantavos served as a financial and strategic advisor to both the Greek Ministry of Industry & Energy (from June 1995 to May 1996) and the Greek Ministry of Health (from May 1996 to January 1998), where, in 1997 and 1998, he helped structure the equivalent of a US$700 million bond issuance for the payment of outstanding debts to the supplier of the Greek National Health System. Mr. Syllantavos has a B.Sc. in Industrial Engineering from Roosevelt University and an MBA in Operations Management, International Finance and Transportation Management from Northwestern University (Kellogg).

Petros Pappas serves and has served since our inception as our non executive Chairman of the board of directors. He served as a member of Star Maritime's board of directors since its inception. Throughout his career as a principal and manager in the shipping industry, Mr. Pappas has been involved in over 120 vessel acquisitions and disposals. In 1989, he founded Oceanbulk Maritime S.A., a dry cargo shipping company that has operated managed vessels aggregating as much as 1.6 million deadweight tons of cargo capacity. He also founded the Oceanbulk Group of affiliated companies, which are involved in the service sectors of the shipping industry. The Oceanbulk Group is comprised of Oceanbulk Maritime S.A., Interchart Shipping Inc., Oceanbulk Shipping and Trading S.A., Oceanbulk S&P, Combine Marine Inc., More Maritime Agencies Inc., and Sentinel Marine Services Inc.  Additionally, Mr. Pappas ranked among the top 25 Greek ship owners (by number of ocean going vessels) as evaluated by the U.S. Department of Commerce's 2004 report on the Greek shipping industry. Mr. Pappas has been a Director of the UK Defense Club, a leading insurance provider of legal defense services in the shipping industry worldwide, since January 2002, and is a member of the Union of Greek Shipowners (UGS). Mr. Pappas received his B.A. in Economics and his MBA from The University of Michigan, Ann Arbor.

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Prokopios (Akis) Tsirigakis serves and has served since our inception as one of our directors. He served as Star Bulk's Chief Executive Officer and President from its inception to February 7, 2011.  He also served as Star Maritime's Chairman of the Board, Chief Executive Officer and President since its inception. Mr. Tsirigakis is experienced in ship management, ship ownership and overseeing new shipbuilding projects. Since November 2003, he has been the Joint Managing Director of Oceanbulk Maritime S.A., a dry cargo shipping company that has operated and managed vessels aggregating as much as 1.6 million deadweight tons of cargo capacity and which is part of the Oceanbulk Group of affiliated companies involved in the service sectors of the shipping industry. Since November 1998, Mr. Tsirigakis has been the Managing Director of Combine Marine Inc., a company which he founded that provides ship management services to third parties and which is part of the Oceanbulk Group. From 1991 to 1998, Mr. Tsirigakis was the Vice-President and Technical Director of Konkar Shipping Agencies S.A. of Athens, after having served as Konkar's Technical Director from 1984 to 1991, which at the time managed 16 drybulk carriers, multi-purpose vessels and tanker/combination carriers. From 1982 to 1984, Mr. Tsirigakis was the Technical Manager of Konkar's affiliate, Arkon Shipping Agencies Inc. of New York, a part of the Archirodon Construction Group. He is a member of the Technical Committee (CASTEC) of Intercargo, the International Association of Dry Cargo Shipowners, and of the Technical Committees of Classification Societies. Mr. Tsirigakis received his Masters and B.Sc. in Naval Architecture from The University of Michigan, Ann Arbor and has three years of seagoing experience. Mr. Tsirigakis formerly served on the board of directors of Dryships Inc., a company listed on the Nasdaq Global Select Market which provides international seaborne transportation services carrying various dry-bulk cargoes.

Tom Søfteland serves and has served since our inception as a member of our board of directors. He served as a member of Star Maritime's board of directors since its inception. Since October 1996, he has been the Chief Executive Officer of Capital Partners A.S. of Bergen, Norway, a financial services firm that he founded and which specializes in shipping and asset finance. From 1990 to October 1996, he held various positions at Industry & Skips Banken, ASA, a bank specializing in shipping, most recently as its Deputy Chief Executive Officer. Mr. Søfteland received his B.Sc. in Economics from the Norwegian School of Business and Administration (NHH).

Peter Espig serves and has served since November 2007 as a member of our board of directors.  Mr. Espig is experienced in the analysis of investment opportunities, raising capital, deal sourcing and financial structuring. In August 2006, he founded and currently serves as CEO of Advance Capital Japan, a private equity and consulting firm focused on raising capital for mid-sized companies and pre-IPO investment and consulting. From 2005 to 2006, Mr. Espig served as Vice-President of the Principal Finance and Securitization Group and Asia Special Situations Group for Goldman Sachs Japan where he was responsible for sourcing and analyzing investment opportunities, balance sheet restructuring and IPO and exit preparations for various corporate and real estate investments. Prior to joining Goldman Sachs, Mr. Espig served from 2004 to 2005 as Vice-President of the New York private equity firm, Olympus Capital, where he participated in corporate restructurings, investment analysis and financing negotiations for both domestic and international investments. From 2003 to 2004, Mr. Espig worked as a leveraged finance, special situations banker for Shinsei bank where he participated in leverage buyouts and debt restructurings. In 1989, Mr. Espig received his B.A. from the University of British Columbia and in 2003, Mr. Espig received his MBA from Columbia Business School where he was honored as a Chazen Society International Scholar.

Koert Erhardt serves and has served since our inception as a member of our board of directors. He served as a member of Star Maritime's board of directors since its inception. From September 2004 to December 2004, he served as the Chief Executive Officer and a member of the board of directors of CC Maritime S.A.M., an affiliate of the Coeclerici Group, an international conglomerate whose businesses include shipping and transoceanic transportation of drybulk materials. From 1998 to September 2004, he served as General Manager of Coeclerici Armatori S.p.A. and Coeclerici Logistics S.p.A., affiliates of the Coeclerici Group, where he created a shipping pool that commercially managed over 130 vessels with a carrying volume of 72 million tons and developed the use of Freight Forward Agreement trading as a hedging mechanism to the pool's exposure and positions. From 1994 to 1998, he served as the General Manager of Bulkitalia, a prominent shipping concern which at the time owned and operated over 40 vessels. From 1990 to 1994, Mr. Erhardt served in various positions with Bulk Italia. From 1988 to 1990, he was the Managing Director and Chief Operating Officer of Nedlloyd Drybulk, the drybulk arm of the Nedlloyd Group, an international conglomerate whose interests include container ship liner services, tankers, oil drilling rigs, pipe laying vessels and ship brokering. Mr. Erhardt received his Diploma in Maritime Economics and Logistics from Hogere Havenen Vervoersschool (now Erasmus University), Rotterdam, and received his MBA International Executive Program at INSEAD, Fontainebleau, France. Mr. Erhardt has also studied at the London School of Foreign Trade.

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Milena Pappas has serves and has served since October 1, 2009 as a member of our board of directors.  Milena Pappas is the daughter of the Chairman of the Board, Mr. Petros Pappas.  Since 2008, Ms. Pappas has served as a chartering broker.  Ms. Pappas also serves as a consultant in the commercial department of Interchart Shipping Inc., a company affiliated with the Oceanbulk Group, a group of companies founded by Mr. Petros Pappas.  From 2006 until the end of 2007, Ms. Pappas worked for Oceanbulk Maritime S.A., a company affiliated with the Oceanbulk Group, in its financial and analyst departments.  From 2004 to 2005, she served as a trainee with both Merrill Lynch in its private wealth department and with the CoeClerici Group in its risk management department. In 2004, while at Merrill Lynch, she assisted in the foundation of the "Women's Milestones" program.  In 2005, Ms. Pappas received a bachelor of arts degree from Cornell University, N.Y. and in 2007 she received a master of science (MSc) in Shipping, Trade and Finance from Cass University, London.

B.           Compensation of Directors and Senior Management

For the year ended December 31, 2010, Prokopios Tsirigakis, our former Chief Executive Officer and President, and George Syllantavos, our Chief Financial Officer and Secretary, received aggregate compensation from the Company in the amount of $516,891 and $357,110, respectively.  Mr. Tsirigakis was succeeded as Chief Executive Officer and President by Mr. Spyros Capralos as of February 7, 2011.  Non-employee directors of Star Bulk receive an annual cash retainer of $15,000, plus a fee of $1,000 for each board and committee meeting attended, including meetings attended telephonically. The chairman of the audit committee receives an additional $7,500 per year and each chairman of our other standing committees will receive an additional $5,000 per year. In addition, each director is reimbursed for out-of-pocket expenses in connection with attending meetings of the board of directors or committees. We do not have a retirement plan for our officers or directors. During the third quarter of 2010 two of our non-executive directors received an amount of $30,000 each for participating in a special committee.  The table below summarizes the fees of the board of directors for the year ended December 31, 2010.

In Dollars
Prokopios Tsirigakis	-
George Syllantavos	5,000
Petros Pappas	23,000
Tom Softeland	67,500
Peter Espig	53,000
Koert Erhardt	35,000
Milena Pappas	23,000
	206,500

Equity Incentive Plan

On February 23, 2010, we adopted an equity incentive plan, which we refer to as the 2010 Equity Incentive Plan, under which officers, key employees, directors and consultants of the Company and its subsidiaries will be eligible to receive options to acquire shares of common stock, stock appreciation rights, restricted stock and other stock-based or stock-denominated awards. We reserved a total of 2,000,000 shares of common stock for issuance under the plan, subject to adjustment for changes in capitalization as provided in the plan. The purpose of the 2010 Equity Incentive Plan is to encourage ownership of shares by, and to assist us in attracting, retaining and providing incentives to, its officers, key employees, directors and consultants whose contributions to us are or will be important to our success and to align the interests of such persons with our stockholders. The various types of incentive awards that may be issued under the 2010 Equity Incentive Plan will enable us to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its business. The plan is administered by our compensation committee, or such other committee of our board of directors as may be designated by the board to administer the plan. The plan permits grants of options to purchase common stock, stock appreciation rights, restricted stock, restricted stock units and unrestricted stock.

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Under the terms of the plan, stock options and stock appreciation rights granted under the plan will have an exercise price per common share equal to the fair market value of a common share on the date of grant, unless otherwise determined by the plan administrator, but in no event will the exercise price be less than the fair market value of a common share on the date of grant. Options and stock appreciation rights are exercisable at times and under conditions as determined by the plan administrator, but in no event will they be exercisable later than ten years from the date of grant.

The plan administrator may grant shares of restricted stock and awards of restricted stock units subject to vesting and forfeiture provisions and other terms and conditions as determined by the plan administrator. Upon the vesting of a restricted stock unit, the award recipient will be paid an amount equal to the number of restricted stock units that then vest multiplied by the fair market value of a common share on the date of vesting, which payment may be paid in the form of cash or common shares or a combination of both, as determined by the plan administrator. The plan administrator may grant dividend equivalents with respect to grants of restricted stock units.

Adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a "change in control" (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding shall become fully vested and exercisable in full.

The Board may amend or terminate the plan and may amend outstanding awards, provided that no such amendment or termination may be made that would materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award. Stockholder approval of plan amendments may be required in certain definitive, pre-determined circumstances if required by applicable rules of a national securities exchange or the Commission. Unless terminated earlier by the board of directors, the plan will expire ten years from the date on which the plan was adopted by the board of directors.

In 2007, we adopted the 2007 Equity Incentive Plan and reserved for issuance 2,000,000 shares of our common stock under that plan.  The terms and conditions of the 2007 Equity Incentive Plan are substantially similar to those of the 2010 Equity Incentive Plan.  All of the shares that were reserved for issuance under the 2007 Equity Incentive Plan were issued and those grants remain in full force and effect.

Pursuant to the 2007 and 2010 Equity Incentive Plans, we have issued the following securities:

· On December 3, 2007, 90,000 restricted non-vested common shares to Prokopios (Akis) Tsirigakis, our former President and Chief Executive Officer, subject to applicable vesting of 30,000 common shares on each of July 1, 2008, 2009 and 2010;

· On December 3, 2007, 75,000 restricted non-vested common shares to George Syllantavos, our Chief Financial Officer and Secretary, subject to applicable vesting of 25,000 common shares on each of July 1, 2008, 2009 and 2010;

· On March 31, 2008, 150,000 restricted non-vested common shares to Peter Espig, our Director, subject to applicable vesting of 75,000 common shares on each of April 1, 2008 and 2009;

· On December 5, 2008, an aggregate of 130,000 restricted non-vested common shares to all of our employees and an aggregate of 940,000 non-vested restricted common shares to the members of our board of directors.  All of these shares vested on January 31, 2009;

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· On February 4, 2010, an aggregate of 115,600 restricted non-vested common shares to all of our employees subject to applicable vesting of 69,360 common shares on June 30, 2010 and 46,240 common shares on June 30, 2011; and

· On February 24, 2010, an aggregate of 980,000 restricted non-vested common shares to the members of our board of directors subject to applicable vesting of 490,000 common shares on each of June 30 and September 30, 2010.

· .On October 20, 2010, an aggregate of 1,070,000 restricted non-vested common shares to the members of our board of directors and 140,000 restricted non-vested common shares to all of our employees.  All of these shares vested on December 31, 2010

As of March 21, 2011, 309,400 shares of our common stock were available for issuance under the 2010 Equity Incentive Plan.

C.           Board Practices

Our board of directors is divided into three classes with only one class of directors being elected in each year and following the initial term for each such class, each class will serve a three-year term. The initial term of our board of directors is as follows:

· The term of the Company's Class A directors expires in 2011;

· The term of Class B directors expires in 2012; and

· The term of Class C directors expires in 2013.

Employment and Consultancy Agreements

In 2007, Star Bulk Management entered into an employment agreement, as amended, with Mr. Prokopios Tsirigakis, our former President and Chief Executive Officer, for work performed for Star Bulk. In 2007, Star Bulk also entered into a separate consulting agreement with a company owned and controlled by Mr. Tsirigakis for work performed for by him outside of Greece.  Each of these agreements had a term of three years.  Under the employment agreement Mr. Tsirigakis received an annual base salary of €80,000, that was subject to increase based on annual review by the compensation committee of our board of directors. Under the consulting agreement, the company controlled by Mr. Tsirigakis received an annual consulting fee of €370,000, a discretionary bonus and additional incentive compensation as determined annually by the compensation committee of our board of directors and a monthly car allowance in the amount of €1,500, all of which were in addition to any grant of shares as part of the annual incentive compensation program.

On February 7, 2011, Mr. Tsirigakis was succeeded by Mr. Spyros Capralos as our President and Chief Executive Officer.  Pursuant to the agreements, Mr. Tsirigakis received a payment from us upon this succession and is prohibited for a period of three months after the end of his employment from participating in business activities with publicly traded companies in competition with us.

Star Bulk Management has entered into employment agreements with Mr. Spyros Capralos in February 2011 and Mr. George Syllantavos in 2007 for work performed for Star Bulk.  Star Bulk has also entered into separate consulting agreements with companies owned and controlled by Mr. Capralos in February 2011 and Mr. Syllantavos in 2007, respectively, for work performed for by them outside of Greece.  Each of these agreements has a term of three years unless terminated earlier or renewed in accordance with the terms of such agreements.  Under their employment agreements, Messrs. Capralos and Syllantavos will each receive an annual base salary which is subject to increase based on annual review by the compensation committee of our board of directors. Under the consulting agreements, each company controlled by Messrs. Capralos and Syllantavos is entitled to receive an annual consulting fee. Messrs. Capralos and Syllantavos will also receive additional incentive compensation as determined annually by the compensation committee of our board of directors, In accordance with the terms and subject to the conditions of their respective consultancy agreements. Under the terms of our consultancy agreement with a company controlled by Mr. Capralos, he is entitled to receive a minimum incentive award of 140,000 common shares, subject to the terms and conditions of the consultancy agreement.

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Pursuant to the agreements, Messrs. Capralos and Syllantavos may engage in other business activities with companies in the international shipping industry provided that such companies are not publicly traded drybulk shipping companies. Messrs. Capralos and Syllantavos will be prohibited for a period of three months after the termination of their employment from participating in business activities with publicly traded companies in competition with Star Bulk unless they obtain Star Bulk's prior written consent.

Messrs. Capralos and Syllantavos are also entitled to receive benefits under each of their consultancy agreements with Star Bulk, including, receipt of annual bonuses and discretionary bonuses to be determined by our board of directors in its sole discretion, stock options and other equity grants pursuant to the our equity incentive plan and a monthly car allowance.

Messrs. Capralos and Syllantavos are entitled to severance payments upon the termination of their respective positions.  In the event they are terminated without cause, Messrs. Capralos and Syllantavos will each receive under their respective employment and consultancy agreements all accrued and unpaid salary through the date of termination, an amount equal to two times their annual salary plus the average of their annual incentive awards for each of the three years preceding the year of the termination and a pro rata bonus for the year in which the termination occurs.  Mr. Tsirigakis, our former Chief Executive Officer and President received a severance payment from us when he was succeeded by Mr. Capralos as of February 7, 2011 pursuant to the terms of his employment and consultancy agreements with the Company.

Officers of Star Bulk will be eligible to receive discretionary bonus awards and/or awards under Star Bulk's equity incentive plan in such amounts, if any, as determined by the board of directors of Star Bulk, in its sole discretion. In making such determinations, Star Bulk's board of directors will consider the then prevailing operations and financial condition of Star Bulk, including any contingencies that are then known, as well as the amount of compensation paid to similarly situated officers of other companies in the seaborne transportation industry.

Committees of the Board of Directors

Our audit committee is responsible for, among other things, (i) reviewing our accounting controls, (ii) making recommendations to the board of directors with respect to the engagement of our outside auditors and (iii) reviewing all related party transactions for potential conflicts of interest and all those related party transactions and subject to approval by our audit committee.  Our compensation committee, which is comprised of three directors, two of which are independent, is responsible for, among other things, recommending to the board of directors our senior executive officers' compensation and benefits.  Our nominating and corporate governance committee, which is comprised of two independent directors, is  responsible for, among other things, recommending to the board of directors nominees for director and directors for appointment to board committees and advising the board with regard to corporate governance practices. Shareholders may also nominate directors in accordance with procedures set forth in our amended and restated bylaws.

The members of the audit, compensation and nominating and corporate governance committees are Mr. Tom Softeland, who also serves as the chairman of our audit committee, Mr. Koert Erhardt who also acts as the chairman of our nominating and corporate governance committee, and Mr. George Syllantavos who serves only on the compensation committee and acts as its chairman.

D.           Employees

As of December 31, 2010 and March 21, 2011, we had 31 employees, including our Chief Executive Officer and Chief Financial Officer, of which 29 employees, were engaged in the day to day management of the vessels in our fleet.

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As of December 31, 2009 and 2008, we had 31 and 22 employees, respectively, including our Chief Executive Officer and Chief Financial Officer, of which 29 and 20 employees, respectively, were engaged in the day to day management of the vessels in our fleet.

E.            Share Ownership

With respect to the total amount of common stock owned by all of our officers and directors, individually and as a group, see Item 7 "Major Shareholders and Related Party Transactions."

Item 7.   Major Shareholders and Related Party Transactions

A.           MAJOR SHAREHOLDERS

The following table presents certain information as of March 29, 2011 regarding the ownership of our shares of common stock with respect to each shareholder, who we know to beneficially own more than five percent of our outstanding shares of common stock, and our directors.

Beneficial Owner	Shares of common stock
	Amount (1)		Percentage (1)
Petros Pappas		8,472,094		13.4	%
Giovine Capital Group LLC (2)		7,660,227		12.1	%
F5 Capital (3)		3,803,481		6.0	%
Prokopios Tsirigakis		2,000,999		3.3	%
George Syllantavos		972,515		1.5	%
Koert Erhardt		783,471		1.2	%
Tom Softeland		435,135		*	%
Peter Espig		333,452		*	%
Milena Pappas		170,000		*	%

(1)	Percentage amounts based on 63,410,360 shares of our common stock outstanding as of March 29, 2011.
(2)	Information derived from the Schedule 13G/A of Giovine Capital Group LLC which was filed with the Commission on January 7, 2011.
(3)	Information derived from the Schedule 13D/A of F5 Capital which was filed with the Commission on July 29, 2008.  According to such filing, Mr. Nobu Su, a former member of our board of directors, exercises voting and investment control over the securities held of record by F5 Capital, a Cayman Islands corporation, which is the nominee of TMT.
*	Less than 1%

Our major shareholders have the same voting rights as our other shareholders.  No corporation or foreign government owns more than 50% of our outstanding shares of common stock.  We are not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of Star Bulk.

B.           Related Party Transactions

Oceanbulk Maritime, S.A., a related party, has paid for certain expenses on behalf of Star Maritime. Star Bulk's director Mr. Petros Pappas is also the Honorary Chairman of Oceanbulk, a ship management company of drybulk vessels.  Star Bulk's former Chief Executive Officer, Mr. Prokopios (Akis) Tsirigakis, as well as its officer Mr. Christos Anagnostou had been employees of Oceanbulk until November 30, 2007.   We also paid to Oceanbulk a brokerage commission in the amount of $660,000 in connection with the sale of Star Beta in 2010.  As of December 31, 2010 we did not had an outstanding receivable balance with Oceanbulk Maritime, S.A.

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Interchart Shipping Inc. or Interchart, a company affiliated with Oceanbulk, a company controlled by our Chairman, acts as a chartering broker for all of the Company's vessels except for the vessel Star Kappa.  As of December 31, 2010 Star Bulk had an outstanding liability of $454,396 to Interchart. During the year ended December 31,2010the brokerage commission of 1.25% on charter revenue paid to Interchart amounted $1,539,898 and is included in "Voyage expenses" in the consolidated statements of operations.

On July 10, 2007, we entered into separate employment agreements with each of Mr. Tsirigakis and Mr. Syllantavos to employ them as our Chief Executive Officer and President, and our Chief Financial Officer and Secretary, respectively.  Each of these agreements has a term of three years unless terminated earlier in accordance with their respective terms. Each of these agreements provides for an annual salary and additional incentive compensation as determined annually by the compensation committee of our board of directors.  The aggregate related expenses for 2010 were $199,500 and are included in general and administrative expenses in the consolidated statement of operations.

On October 3, 2007, we also entered into separate consulting agreements with companies owned and controlled by our Chief Executive Officer and Chief Financial Officer respectively. Each of these agreements has a term of three years unless terminated earlier in accordance with the terms of such agreements. Under the consulting agreements, each company controlled by Messrs. Tsirigakis and Syllantavos received an annual consulting fee  Messrs. Tsirigakis and Syllantavos received incentive compensation as determined annually by the compensation committee of our board of directors.  The aggregate related expenses for 2010 were $874,001 and are included in general and administrative expenses in the consolidated statement of operations.

On February 2, 2011, we entered into an agreement with Mr. Tsirigakis relating to his employment with the Company. On February 7, 2011, Mr. Tsirigakis was succeeded by Mr. Spyros Capralos as our Chief Executive Officer and President.  Mr. Tsirigakis received a severance payment from the Company pursuant to the terms and subject to the conditions of his employment and consultancy agreements with the Company.

On February 28, 2011, we entered into an employment agreement with Mr. Capralos to employ him as our Chief Executive Officer and President.  This agreement has a term of three years unless terminated earlier in accordance with its terms. Under the employment agreement, Mr. Capralos is entitled to receive an annual salary and additional incentive compensation as determined annually by the compensation committee of our board of directors.

On February 28, 2011, we also entered into a separate consulting agreement with a company owned and controlled by Mr. Capralos.  This agreement has a term of three years unless terminated earlier in accordance with its terms. Under the consulting agreement, the company controlled by Mr. Capralos is entitled to receive an annual consulting fee. Mr. Capralos will also receive additional incentive compensation as determined by the compensation committee of our board of directors.

Messrs. Capralos and Syllantavos are also subject to non-competition and non-solicitation covenants during the terms of their employment and consultancy agreements and for a period of three months following termination for any reason.  The expenses related to these agreements will be included in general and administrative expenses in the consolidated statement of operations.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates, including loans by our officers and directors, if any, will be on terms believed by us to be no less favorable than are available from unaffiliated third parties, and such transactions or loans, including any forgiveness of loans, will require prior approval, in each instance by a majority of our uninterested "independent" directors or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel.

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C.           Interests of Experts and Counsel

Not Applicable.

Item 8.   Financial Information

A.           Consolidated statements and other financial information.

See Item 18. "Financial Statements."

Legal Proceedings

In 2011, all arbitration proceedings between the charterers of the Star Alpha and us and between the charterers and third parties have been discontinued pursuant to a settlement agreement with the charterers and the sub-charterers. Each party has been released from the proceedings and claims have been waived.  An amount of $2.1 million under "Loss on bad debts" in our consolidated statements of operations is associated with a write-off of this charterer's balance.

We commenced an arbitration proceeding as complainant against Oldendorff Gmbh & Co. KG of Germany, or Oldendorff, seeking damages resulting from Oldendorff's repudiation of a charter relating to the Star Beta. The Star Beta had been time chartered by a subsidiary of the Company to Industrial Carriers Inc. of Ukraine, or ICI.  Under that time charter, ICI was obligated to pay a gross daily charterhire rate of $106,500 until February 2010. In January 2008, ICI sub-chartered the vessel to Oldendorff for one year at a gross daily charterhire rate of $130,000 until February 2009. In October 2008, ICI assigned its rights and obligations under the sub-charter to one of our subsidiaries in exchange for ICI being released from the remaining term of the ICI charter. Oldendorff notified us that it considers the assignment of the sub-charter to be an effective repudiation of the sub-charter by ICI.  ICI subsequently filed an application for protection from its creditors in a Greek insolvency proceeding which was dismissed. ICI 's appeal was also dismissed.  In August 2010, we arrested the ship Sophie Oldendorff in South Africa on an associate ship basis, as security for the above claims and security was provided. We believe that the assignment was valid and that Oldendorff has erroneously repudiated the sub-charter.  An arbitration hearing has been scheduled for April 2011.

Vinyl Navigation Inc., which is acting for and on behalf of the Company, commenced arbitration proceedings against TMT Bulk Corp., or TMT Bulk, for repudiatory breach of the charterparty due to the nonpayment of charterhire related to the Star Ypsilon. Vinyl Navigation Inc. pursued an award for such nonpayment of charterhire and an award for the loss of charterhire for the remaining period of the charterparty. During 2010, we received an aggregate of $24.30 million for full and final settlement of this claim.

During the fourth quarter of 2009 we commenced an arbitration proceeding against Ishaar Overseas FZE of Dubai, or Ishaar, for repudiatory breach of the charterparty due to the nonpayment of charterhire related to the Star Epsilon.  The Company has commenced an arbitration proceeding against Ishhar for repudiatory breach of the charterparty due to the nonpayment of charterhire related to the Star Kappa.  Both the Company and Ishaar have appointed arbitrators and the Company has filed claim submissions against the charterers Ishaar.  In the fourth quarter of 2010, we commenced additional arbitration proceedings against the parent company of Ishhar, Bhatia International Limited ("Bhatia"), on the grounds that Ishhar acted as an agent for the undisclosed principal Bhatia.  In December 2010 we arrested the vessel Harkripa in South Africa on an associate ship basis as security for the claim of Star Epsilon and the vessel remains arrested.   A hearing to set aside the arrest order filed by Fleetmar, the registered owners of the vessel Harkripa, is scheduled for March 29, 2011.

During third quarter of 2010 we commenced arbitration proceedings with Dieulemar over a dispute with the charterers of the Star Beta.  The dispute concerns (i) breach of the charterparty by Dieulemar and resulting damages incurred by us due to the late delivery of such vessel, which was delivered after the applicable redelivery date under that charterparty, and (ii) such charterers' allegations that the vessel's performance did not meet the requirements set forth in the charterparty.  The arbitration proceedings are developing and security has been provided.

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On February 18, 2011, we received a letter from KLC, the charterer of the Star Gamma, notifying us of the commencement of rehabilitation proceedings of KLC in Korea and the related schedule for making claims against KLC in those proceedings. The receivers for KLC terminated the charterparty on March 9, 2011. The charter with KLC had an initial term that ends in December 2011. Currently, KLC owes us approximately $1.8 million in charterhire.  We have asserted liens against KLC in respect of certain amounts due to KLC under sub-charters relating to the Star Gamma.  Letters setting out our claims for due hire and damages have been sent to the Seoul Court handling the rehabilitation proceedings of KLC. The disposition of the claims for the due amounts will determined by the Korea Court at a future date.

On September 29, 2010 we agreed with a third party to sell a 45% interest in the future proceeds related to the settlement of certain of the commercial claims for $5 million which is included under "Other operating income" in the accompanying consolidated statements of operations. This amount was collected in October 2010.

We have not been involved in any legal proceedings which we believe may have, or have had, a significant effect on our business, financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which we believe may have a significant effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

Dividend Policy

Under the terms of our waiver agreements with our lenders, payment of dividends and repurchases of our shares are subject to the prior written consent of our lenders. Please see "– Senior Secured Credit Facilities."  We previously paid regular dividends on a quarterly basis from our operating surplus, in amounts that allowed us to retain a portion of our cash flows to fund vessel or fleet acquisitions, and for debt repayment and other corporate purposes, as determined by our management and board of directors. The declaration and payment of dividends will be subject at all times to the discretion of our board of directors. The timing and amount of dividends will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividends, or if there is no surplus, dividends may be declared or paid out of net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year.

We believe that, under current law, our dividend payments from earnings and profits would constitute "qualified dividend income" and as such will generally be subject to a 15% United States federal income tax rate with respect to non-corporate individual stockholders. Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of a United States stockholder's tax basis in its common stock on a Dollar-for-Dollar basis and thereafter as capital gain. Please see Item 10 "Additional Information—Taxation" for additional information relating to the tax treatment of our dividend payments.

Under the terms of our waiver agreements with our lenders, payment of dividends and the repurchasing of our common shares is subject to the prior written consent of our lenders.  Please see "Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."

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With the consent of our lenders, (i) in February 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2009 that was paid on March 12, 2010 to shareholders of record as of March 8, 2010, (ii) in May 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending March 31, 2010 that was paid on June 4, 2010 to shareholders of record on May 31, 2010,  (iii) in August 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending June 30, 2010 that was paid on August 30, 2010 to shareholders of record as of August 25, 2010, (iv) in November 2010, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending September 30, 2010 that was paid on December 3, 2010 to shareholders of record as of November 30, 2010 and (v) in February 2011, we declared a dividend of $0.05 per outstanding share of our common stock for the three months ending December 31, 2010 that was paid on March 10, 2010 to shareholders of record as of March 4, 2011.

B.           Significant Changes.

There have been no significant changes since the date of the annual consolidated financial statements included in this annual report.

Item 9.  The Offer and Listing

A.           Offer and Listing Details

The Company's common stock is traded on the Nasdaq Global Select Market under the symbol "SBLK."  The following table sets forth, for the five most recent fiscal years, the high and low prices for the common stock on the Nasdaq Global Select Market.

COMMON STOCK

Fiscal year ended December 31,	High		Low
2010	$	3.20	$	2.24
2009	$	5.37	$	1.21
2008	$	14.34	$	1.80
2007	$	14.05	$	9.86
2006	$	10.16	$	9.45

The following table sets forth, for each full financial quarter for the two most recent fiscal years, the high and low prices of the common stock on the Nasdaq Global Select Market.

Fiscal year ended December31, 2010	High		Low
1st Quarter ended March 31, 2010	$	3.20	$	2.53
2nd Quarter ended June 30, 2010	$	2.99	$	2.42
3rd Quarter ended September 30, 2010	$	2.94	$	2.24
4th Quarter ended December 31, 2010	$	3.17	$	2.67

Fiscal year ended December 31, 2009	High		Low
1st Quarter ended March 31, 2009	$	3.34	$	1.21
2nd Quarter ended June 30, 2009	$	5.37	$	2.29
3rd Quarter ended September 30, 2009	$	3.97	$	3.18
4th Quarter ended December 31, 2009	$	3.65	$	2.69

The following table sets forth, for the most recent six months, the high and low prices for the common stock on the Nasdaq Global Select Market.

	High		Low
March 2011*		2.59		2.36
February 2011		2.60		2.40
January 2011		2.79		2.59
December 2010		3.07		2.67
November 2010		3.17		2.80
October 2010		2.92		2.77
September 2010		2.91		2.84

*Through March 28, 2011

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Item 10.  Additional Information

A.           Share Capital

Not Applicable.

B.           Memorandum and Articles of Association

Directors

Our directors are elected by a majority of the votes cast by stockholders entitled to vote in an election. Our amended and restated articles of incorporation provide that cumulative voting shall not be used to elect directors. Our board of directors must consist of at least three members. The exact number of directors is fixed by a vote of at least 66 2/3% of the entire board. Our amended and restated articles of incorporation provide for a staggered board of directors whereby directors shall be divided into three classes: Class A, Class B and Class C which shall be as nearly equal in number as possible. Shareholders, acting as at a duly constituted meeting, or by unanimous written consent of all shareholders, initially designated directors as Class A, Class B or Class C with only one class of directors being elected in each year and following the initial term for each such class, each class will serve a three-year term. The initial term of our board of directors is as follows: (i) the term of the Company's Class A directors expires in 2011; (ii) the term of Class B directors expires in 2012; and (iii) the term of Class C directors expires in 2010. Each director serves his respective term of office until his successor has been elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. Our board of directors has the authority to fix the amounts which shall be payable to the members of the board of directors for attendance at any meeting or for services rendered to us.

On November 23, 2009 at our annual meeting of shareholders, our shareholders voted to approve an amendment to our Amended and Restated Articles of Incorporation as set forth below that would grant the Chairman of our Board of Directors a tie- breaking vote in the event the Board vote is evenly split or deadlocked on a matter presented for vote. The BCA did not provide for granting the Chairman a tie-breaking vote where, as in the Company's case, there is only one class of shares outstanding.  The Board deferred authorizing the necessary actions to effect such amendment to our Amended and Restated Articles of Incorporation until such time as the BCA has been amended to permit such amendment. The BCA was subsequently amended to permit such amendment.  Accordingly, we intend to file Third Amended and Restated Articles of Incorporation which shall include the following provision:

"To the fullest extent permitted by law, the Chairman of the Corporation's Board of Directors shall be entitled, in his or her sole discretion, to cast an additional vote in any situation where the votes of directors (including the first vote of the Chairman and abstentions, if any) are evenly split on a matter, including, without limitation, if such even split results from:

(a)	a vote of the entire membership of the Board of Directors;
(b)	a vote of the Directors constituting a quorum at a meeting of the Board of Directors, or
(c)	a vote of Directors actually voting at a meeting of the Board of Directors."

The form of Third Amended and Restated Articles of Incorporation is field as Exhibit 1.1 to this Annual Report on Form 20-F.

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Stockholder Meetings

Under our amended and restated bylaws, annual stockholder meetings will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by the board of directors, chairman of the board or by the president. Our board of directors may set a record date between 10 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting.

Dissenters' Rights of Appraisal and Payment

Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or consolidation, sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any further amendment of our amended and restated articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which the Company's shares are primarily traded on a local or national securities exchange.

Stockholders' Derivative Actions

Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Indemnification of Officers and Directors

Our amended and restated bylaws includes a provision that entitles any our directors or officers to be indemnified by us upon the same terms, under the same conditions and to the same extent as authorized by the BCA if he acted in good faith and in a manner reasonably believed to be in and not opposed to our best interests, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

We are also authorized to carry directors' and officers' insurance as a protection against any liability asserted against our directors and officers acting in their capacity as directors and officers regardless of whether we would have the power to indemnify such director or officer against such liability bylaw or under the provisions of our bylaws. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The indemnification provisions in our amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-takeover Provisions of our Charter Documents

Several provisions of our amended and restated articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti -takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and (2) the removal of incumbent officers and directors.

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Blank Check Preferred Stock

Under the terms of our amended and restated articles of incorporation, our board of directors has authority, without any further vote or action by our stockholders, to issue up to 25.0 million shares of blank check preferred stock. Our board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Classified Board of Directors

Our amended and restated articles of incorporation provide for a board of directors serving staggered, three-year terms. Approximately one-third of our board of directors will be elected each year. The classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the board of directors from removing a majority of the board of directors for two years.

Election and Removal of Directors

Our amended and restated articles of incorporation prohibit cumulative voting in the election of directors. Our articles of incorporation also require shareholders to give advance written notice of nominations for the election of directors. Our articles of incorporation further provide that our directors may be removed only for cause and only upon affirmative vote of the holders of at least 70% of the outstanding voting shares of the Company. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited Actions by Stockholders

Our bylaws provide that if a quorum is present, and except as otherwise expressly provided by law, the affirmative vote of a majority of the shares of stock represented at the meeting shall be the act of the shareholders. Shareholders may act by way of written consent in accordance with the provisions of Section 67 of the BCA.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our amended and restated articles of incorporation provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder's notice must be received at our principal executive offices not less than 120 days nor more than 180 days prior to the one year anniversary of the preceding year's annual meeting. Our articles of incorporation also specify requirements as to the form and content of a shareholder's notice. These provisions may impede shareholders' ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

C.           Material Contracts

We have entered into four credit facilities with Commerzbank A.G., Credit Agricole Corporate and Investment Bank and Piraeus Bank, as agent and as lender. For a discussion of our term loan facilities, please see the section of this annual report entitled "Operating and Financial Review and Prospects – Liquidity and Capital Resources – Senior Secured Credit Facilities."  We have no other material contracts, other than contracts entered into in the ordinary course of business, to which the Company or any member of the group is a party.

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D.           Exchange Controls

Under Marshall Islands and Greek law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

E.           Taxation

The following is a discussion of the material Marshall Islands and U.S. federal income tax regimes relevant to an investment decision with respect to our common stock.

U.S. Taxation

The following discussion is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended, or the "Code", existing and proposed regulations promulgated thereunder by the U.S. Department of the Treasury, or the "Treasury Regulations," administrative rulings, pronouncements and judicial decisions, all as of the date of this Annual Report, and all of which are subject to change, possibly with retroactive effect.

Tax Classification of the Company

Star Maritime was a Delaware corporation which merged into the Company pursuant to the Redomiciliation Merger as more specifically described above.

Section 7874(b) of the Code, or "Section 7874(b)," provides that a corporation organized outside the United States, such as the Company, which acquires (pursuant to a "plan" or a "series of related transactions") substantially all of the assets of a corporation organized in the United States, such as Star Maritime, will be treated as a U.S. domestic corporation for U.S. federal income tax purposes if shareholders of the U.S. corporation whose assets are being acquired own at least 80% of the non-U.S. acquiring corporation after the acquisition. If Section 7874(b) were to apply to Star Maritime and the Redomiciliation Merger, then the Company, as the surviving entity of the Redomiciliation Merger, would be subject to U.S. federal income tax as a U.S. domestic corporation on its worldwide income after the Redomiciliation Merger. In addition, as a U.S. domestic corporation, any dividends paid by us to a Non-U.S. Holder, as defined below, would be subject to a U.S. federal income tax withholding at the rate of 30% or such lower rate as provided by an applicable U.S. income tax treaty.

After the completion of the Redomiciliation Merger, the shareholders of Star Maritime owned less than 80% of the Company. Star Maritime received an opinion of its counsel, Seward & Kissel LLP or "Seward & Kissel", that Star Bulk should not be subject to Section 7874(b) after the Redomiciliation Merger. Based on the structure of the Redomiciliation Merger, the Company believes that it is not subject to U.S. federal income tax as a U.S. domestic corporation on its worldwide income for taxable years after the Redomiciliation Merger. However, there is no authority directly addressing the application of Section 7874(b) to a transaction such as the Redomiciliation Merger where shares in a foreign corporation, such as the Company, are issued concurrently with (or shortly after) a merger. In particular, since there is no authority directly applying the "series of related transactions" or "plan" provisions to the post-acquisition stock ownership requirements of Section 7874(b), there is no assurance that the IRS or a court will agree with Seward & Kissel's opinion on this matter. Moreover, Star Maritime has not sought a ruling from the IRS on this point. Therefore, there is no assurance that the IRS would not seek to assert that the Company is subject to U.S. federal income tax on its worldwide income after the Redomiciliation Merger, although the Company believes that such an assertion should not be successful.

The remainder of this discussion assumes that the Company will not be treated as a U.S. domestic corporation for any taxable year.

Taxation of the Company's Shipping Income

We anticipate that we will derive substantially all of our gross income from the use and operation of vessels in international commerce and that this income will principally consist of freights from the transportation of cargoes (including COAs), hire or lease from time or voyage charters and the performance of services directly related thereto, which we refer to collectively as "shipping income."

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Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the United States. We are not permitted by law to engage in transportation that gives rise to 100% U.S. source shipping income. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived entirely from sources outside the United States will not be subject to U.S. federal income tax.

Based upon our anticipated shipping operations, our vessels will operate in various parts of the world, including to or from U.S. ports. Unless exempt from U.S. federal income tax under Section 883 of the Code, we will be subject to U.S. federal income tax, in the manner discussed below, to the extent our shipping income is considered derived from sources within the United States.

Application of Section 883 of the Code

Under the relevant provisions of Section 883 of the Code and the Treasury Regulations promulgated thereunder, we will be exempt from U.S. federal income tax on our U.S. source shipping income if:

(i) we are organized in a "qualified foreign country," which is one that grants an equivalent exemption from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883 of the Code, and which we refer to as the "Country of Organization Requirement"; and

(ii) we can satisfy any one of the following two (2) stock ownership requirements:

(a) more than 50% of our stock, in terms of value, is beneficially owned by individuals who are residents of a "qualified foreign country," which the Company refers to as the "50% Ownership Test"; or

(b) our stock is "primarily and regularly" traded on an "established securities market" located in the United States or in a "qualified foreign country," which we refer to as the "Publicly-Traded Test".

The IRS has recognized the Marshall Islands, our country of incorporation and the country of incorporation of our ship-owning subsidiaries, as "qualified foreign countries." Accordingly, we satisfy the Country of Organization Requirement.

Therefore, our eligibility for exemption under Section 883 of the Code is wholly dependent upon being able to satisfy one of the stock ownership requirements.

The Treasury Regulations provide that stock of a foreign corporation will be considered to be "primarily traded" on an "established securities market" if the number of shares of each class of stock that are traded during any taxable year on all "established securities markets" in that country exceeds the number of shares in each such class that are traded during that year on "established securities markets" in any other single country. Our common stock is "primarily traded" on the Nasdaq Global Select Market.

Under the Treasury Regulations, our common stock will be considered to be "regularly traded" on an "established securities market" if one or more classes of our common stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market, which we refer to as the "listing requirement."  Since our common stock is listed on the Nasdaq Global Select Market, we will satisfy the listing requirement.

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The Treasury Regulations further require that with respect to each class of common stock relied upon to meet the listing requirement: (i) such class of the common stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or 1/6 of the days in a short taxable year, which we refer to as the "trading frequency test;" and (ii) the aggregate number of shares of such class of common stock traded on such market is at least 10% of the average number of shares of such class of common stock outstanding during such year, or as appropriately adjusted in the case of a short taxable year, which we refer to as the "trading volume test." We believe that our common stock will satisfy the trading frequency and volume tests. Even if this were not the case, the Treasury Regulations provide that the trading frequency and volume tests will be deemed satisfied by a class of stock if, as we expect to be the case with our common stock, such class of stock is traded on an "established securities market" in the United States and such class of stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, our common stock would not be considered to be "regularly traded" on an "established securities market" if 50% or more of the outstanding shares of our common stock is owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of our common stock, which we refer to as the "5% Override Rule."

For purposes of determining the persons who own 5% or more of our common stock, or "5% Stockholders," the Treasury Regulations permit us to rely on Schedule 13G and Schedule 13D filings with the U.S. Securities and Exchange Commission, or the "SEC," to identify persons who have a 5% or greater beneficial interest in our common stock. The Treasury Regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Stockholder for such purposes.

In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will nevertheless not apply if we can establish, in accordance with specified ownership certification procedures, that within the group of 5% Stockholders there are sufficient "qualified shareholders" for purposes of Section 883 of the Code to preclude "non-qualified shareholders" in such group from owning actually or constructively 50% or more of our common stock for more than half the number of days during the taxable year.

For the 2010 taxable year, we were not subject to the 5% Override Rule and, therefore, we believe that we satisfied the Publicly-Traded Test.  Accordingly, we believe that we were exempt from U.S. federal income tax on our U.S. source shipping income for the 2010 taxable year, and we intend to take this position on our 2010 U.S. federal income tax return.  However, there is no assurance that we will continue to qualify for the benefits of Section 883 of the Code for any future taxable year.

Taxation in Absence of Exemption under Section 883 of the Code

To the extent the benefits of Section 883 of the Code are unavailable with respect to any item of U.S. source shipping income, our U.S. source shipping income, to the extend not considered to be "effectively connected" with a U.S. trade or business, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, or the "4% gross basis tax regime." Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.

Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to U.S. federal income tax with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

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U.S. Federal Income Taxation of Holders of Common Stock

The following is a discussion of the material U.S. federal income tax consequences applicable to a U.S. Holder and a Non-U.S. Holder, each as defined below, of the ownership and disposition of our common stock. This discussion does not purport to deal with the tax consequences of owning common stock to all categories of investors, some of which, such as dealers in securities, investors whose functional currency is not the U.S. Dollar and investors that own, actually or under applicable constructive ownership rules, 10% or more of our common stock, may be subject to special rules. This discussion deals only with holders who own our common stock as a capital asset. Holders of our common stock are encouraged to consult their own tax advisors concerning the overall tax consequences arising in their particular situation under U.S. federal, state, local or foreign law of the ownership of our common stock.

U.S. Federal Income Taxation of U.S. Holders

As used herein, the term "U.S. Holder" means a beneficial owner of our common stock that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

If a partnership holds our common stock, the U.S. federal income tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common stock, you are encouraged to consult your tax advisor.

Distributions

Subject to the discussion of "passive foreign investment companies" below, any distributions made by us with respect to our common stock to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income," as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder's tax basis in its common stock on a Dollar-for-Dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common stock will generally be treated as "passive category income" or, in the case of certain types of U.S. Holders, "general category income" for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

Dividends paid on our common stock to a U.S. Holder who is an individual, trust or estate, which we refer to as a "U.S. Individual Holder," will generally be treated as "qualified dividend income" that is taxable to such U.S. Individual Holders at preferential tax rates (through 2012) provided that (1) the common stock is readily tradable on an established securities market in the United States (such as the Nasdaq Global Select Market, on which our common stock is listed); (2) we are not a "passive foreign investment company" for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or will be); (3) the U.S. Individual Holder has owned the common stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock becomes ex-dividend; and (4) certain other conditions are met. There is no assurance that any dividends paid on our common stock will be eligible for these preferential rates in the hands of a U.S. Individual Holder. Legislation has been previously introduced in the U.S. Congress which, if enacted in its present form, would preclude our dividends from qualifying for such preferential rates prospectively from the date of its enactment. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Individual Holder.

Special rules may apply to any "extraordinary dividend," generally, a dividend in an amount which is equal to or in excess of 10% of a stockholder's adjusted basis (or fair market value in certain circumstances) in our common stock. If we pay an "extraordinary dividend" on our common stock that is treated as "qualified dividend income," then any loss derived by a U.S. Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.

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Sale, Exchange or other Disposition of Common Stock

Assuming we do not constitute a "passive foreign investment company", or "PFIC", for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common stock in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in such common stock. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in such common stock is greater than one year at the time of the sale, exchange or other disposition. Otherwise, such capital gain or loss will be treated as short-term capital gain or loss. Such capital gain or loss will generally be treated as U.S. source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Individual Holder's ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Status and Significant Tax Consequences

Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a "passive foreign investment company" for U.S. federal income tax purposes. In general, we will be treated as a passive PFIC with respect to a U.S. Holder if, for any taxable year in which such U.S. Holder held our common stock, either:

· at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or

· at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as "passive assets."

For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute "passive income" unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.

Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive, or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the tankers, should not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a "qualified electing fund," which election we refer to as a "QEF election." As an alternative to making a QEF election, a U.S. Holder could make a "mark-to-market" election with respect to our common stock, as discussed below.

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Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an "Electing Holder," the Electing Holder must report each year for U.S. federal income tax purposes its pro rata share of our ordinary earnings and net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received by the Electing Holder from us. The Electing Holder's adjusted tax basis in the common stock would be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits previously taxed would result in a corresponding reduction in the adjusted tax basis in the common stock and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common stock. A U.S. Holder would make a QEF election with respect to any taxable year that our company is a PFIC by filing IRS Form 8621 with its U.S. federal income tax return. If we became aware that we were to be treated as a PFIC for any taxable year, we intend to provide each U.S. Holder with all necessary information in order to make the QEF election described above.

Taxation of U.S. Holders Making a "Mark-to-Market" Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate, our common stock is treated as "marketable stock," a U.S. Holder could make a "mark-to-market" election with respect to our common stock, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common stock at the end of the taxable year over such U.S. Holder's adjusted tax basis in the common stock. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common stock over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in its common stock would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common stock would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common stock would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.

Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a "mark-to-market" election for that year, whom we refer to as a "Non-Electing Holder," would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period in the common stock), and (2) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:

· the excess distribution or gain would be allocated ratably over the Non-Electing Holders' holding period in the common stock;

· the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and

· the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that taxable year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

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These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common stock. If a Non-Electing Holder who is an individual dies while owning our common stock, such Non-Electing Holder's successor generally would not receive a step-up in tax basis with respect to such common stock.

U.S. Federal Income Taxation of Non-U.S. Holders

A beneficial owner of our common stock (other than a foreign partnership) that is not a U.S. Holder is referred to herein as a "Non-U.S. Holder."

Dividends on Common Stock

Non-U.S. Holders generally will not be subject to U.S. federal income or withholding tax on dividends received from us with respect to our common stock, unless that income is "effectively connected" with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is subject to U.S. federal income tax only if attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Common Stock

Non-U.S. Holders generally will not be subject to U.S. federal income or withholding tax on any gain realized upon the sale, exchange or other disposition of our common stock, unless:

· the gain is "effectively connected" with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to that gain, that gain is subject to U.S. federal income tax only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or

· the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

If a Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, income from the common stock, including dividends and gain from the sale, exchange or other disposition of the common stock, that is "effectively connected" with the conduct of that trade or business will generally be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the U.S. federal income taxation of U.S. Holders. In addition, if you are a corporate Non-U.S. Holder, your earnings and profits that are attributable to the "effectively connected" income, subject to certain adjustments, may be subject to an additional "branch profits" tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States will be subject to information reporting requirements. Such payments will also be subject to "backup withholding" if you are a non-corporate U.S. Holder and you:

· fail to provide an accurate taxpayer identification number;

· are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or

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· in certain circumstances, fail to comply with applicable certification requirements.

Non-U.S. Holders may be required to establish their exemption from information reporting and "backup withholding" by certifying their status on IRS Form W-8BEN, W-8ECI or W-8IMY, as applicable.

If a stockholder sells its common stock to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. "backup withholding" and information reporting unless you certify, under penalties of perjury, that you are a non-U.S. person or you otherwise establish an exemption. If a stockholder sells its common stock through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid outside the United States, then information reporting and "backup withholding" generally will not apply to that payment. However, U.S. information reporting requirements, but not "backup withholding", will apply to a payment of sales proceeds, even if that payment is made outside the United States, if a stockholder sells its common stock through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States.

"Backup withholding" is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under "backup withholding" rules that exceed the taxpayer's U.S. federal income tax liability by filing a refund claim with the IRS.

Marshall Islands Tax Consequences

We are incorporated in the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our stockholders.

F.           Dividends and paying agents

Not Applicable.

G.           Statement by experts

Not Applicable.

H.           Documents on display

We file reports and other information with the Commission. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549, or from the Commission's website http://www.sec.gov. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330 and you may obtain copies at prescribed rates.

I.           Subsidiary information

Not Applicable.

Item 11.  Quantitative and Qualitative Disclosures about Market Risk

Interest Rates

The international drybulk industry is a capital intensive industry, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our debt contains interest rates that fluctuate with LIBOR. During the waiver period, LIBOR is adjusted to the cost of funds. Increasing interest rates could adversely impact future earnings.

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Our interest expense for the year ended December 31, 2010 was $5.6 million (including deferred finances fees).  Our estimated interest expense for the year ending December 31, 2011is expected to be $5.9 million (including deferred finance fees).  Our interest expense estimate is based on the amount of our outstanding borrowings under our term loan facilities as of December 31, 2010 and the new loan facility signed in January 2011, and the weighted average interest rate of our term loan facilities for the year ended December 31, 2010, which amounted to 2.66%.  Our interest expense is affected by changes in the general level of interest rates. As an indication of the extent of our sensitivity to interest rate changes, an increase of 100 basis points will increase our interest expense for the year ending December 31, 2011 by $2.3 million assuming the same debt profile throughout the year.

The following table sets forth the sensitivity of loans in millions of Dollars to a 100 basis points increase in LIBOR during the next five years:

For the year ending December 31,	Estimated amount of interest expense	Estimated amount of interest expense after an increase of 100 basis points	Sensitivity
2011	5.9	8.2	2.3
2012	6.0	8.3	2.3
2013	5.2	7.2	2.0
2014	4.1	5.6	1.5
2015	2.9	4.0	1.1

Currency and Exchange Rates

We generate all of our revenues in Dollars and operating expenses in currencies other than the Dollar are approximately 32% of total operation expenses. Further, 68% of our general and administrative expenses, excluding expenses of $6.5 million relating to the amortization of stock based compensation recognized in connection with the restricted shares issued to directors and employees, including consulting fees, salaries and traveling expenses were incurred in Euros. For accounting purposes, expenses incurred in Euros are converted into Dollars at the exchange rate prevailing on the date of each transaction. Because a significant portion of our expenses are incurred in currencies other than the Dollar, our expenses may from time to time increase relative to our revenues as a result of fluctuations in exchange rates, particularly between the Dollar and the Euro, which could affect the amount of net income that we report in future periods. As of December 31, 2010, the effect of a 1% adverse movement in Dollar/Euro exchange rates would have resulted in an increase of $60,624 and $58,469 in our general and administrative expense and our operating expenses, respectively. While we historically have not mitigated the risk associated with exchange rate fluctuations through the use of financial derivatives, we may determine to employ such instruments from time to time in the future in order to minimize this risk. The use of financial derivatives, including foreign exchange forward agreements, would involve certain risks, including the risk that losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.

Forward Freight Agreements

From time to time, we may take positions in derivative instruments including freight forward agreements, or FFAs. Generally, FFAs and other derivative instruments may be used to hedge a vessel owner's exposure to the charter market for a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and time period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments we could suffer losses in the settling or termination of the FFA. This could adversely affect our results of operation and cash flow.

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During the years ended December 31, 2010 and 2009, we entered into a limited number of FFAs on the Capesize and Panamax indexes.  The FFAs are intended to serve as an approximate hedge for our vessels trading in the spot market for 2009, 2010, effectively locking-in the approximate amount of revenue that we expect to receive from such vessels for the relevant periods. Our FFAs do not qualify as cash flow hedges for accounting purposes and therefore gains or losses are recognized in the accompanying consolidated statements of operations.  As all of our FFAs are settled on a daily basis through London Clearing House (LCH), the fair value of these instruments as of December 31, 2010 was $0.  During the years ended December 31, 2010 and 2009, the loss from FFAs amounted to $2.1 million and $2.4 million, respectively.  As of December 31, 2010, we had no open positions on FFAs.

Bunker swap agreements

Bunker swaps are agreements between two parties to exchange cash flows at a fixed price on bunkers, where volume, time period and price are agreed in advance. Our bunker swaps are traded as a derivative on the over-the-counter (OTC) market. During 2009 and 2010, we entered into several bunker swaps contracts up to December 31, 2011. As of December 31, 2010, we had no open positions on bunkers swaps.

During the year ended December 31, 2010 and 2009 loss/gain from bunker swaps amounted to $0.005 million (loss) and $0.3 million (gain).

Item 12.  Description of Securities Other than Equity Securities

A.           Debt securities

Not Applicable.

B.           Warrants and rights

Not Applicable.

C.           Other securities

Not Applicable.

D.           American depository shares

Not Applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.  Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15.  Controls and Procedures

(a)           Disclosure Controls and Procedures

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As of December 31, 2010, our management (with the participation of our chief executive officer and chief financial officer) conducted an evaluation pursuant to Rule 13a-15(b) and 15d-15 promulgated under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), of the effectiveness of the design and operation of our disclosure controls and procedures. Our management, including our chief executive and chief financial officer, recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the partnership have been detected. Further, in the design and evaluation of our disclosure controls and procedures our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

However, based on this evaluation, our chief executive officer and chief financial officer concluded that as of December 31, 2010, our disclosure controls and procedures, which include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to the management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure, were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

(b)           Management's Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and carried out by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with US GAAP. Our internal control over financial reporting includes policies and procedures that:

· Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with US GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

Management has conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2010 is effective.

(c)           Attestation Report of the Registered Public Accounting Firm

Deloitte, Hadjipavlou Sofianos & Cambanis S.A., our independent registered public accounting firm, as auditors of the consolidated financial statements of the Company for the year ended December 31, 2010, has also audited the effectiveness of our internal control over financial reporting as stated in their audit report which is included below.

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(d)           Changes in Internal Control over Financial Reporting

There were no other changes in our internal controls over financial reporting that occurred during the period covered by this Annual Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management, including our Chief Executive Officer and the Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Star Bulk Carriers Corp.

Majuro, Republic of the Marshall Islands

We have audited the internal control over financial reporting of Star Bulk Carriers Corp. and subsidiaries (the "Company") as of December 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2010 of the Company and our report dated March 29, 2011 expressed an unqualified opinion on those financial statements.

/s/ Deloitte.

Hadjipavlou, Sofianos & Cambanis S.A.

Athens, Greece

March 29, 2011

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Item 16A.   Audit Committee Financial Expert

The Board of Directors of the Company has determined that Mr. Softeland, whose biographical details are included in Item 6. "Directors and Senior Management," a member of our Audit Committee qualifies as a financial expert and is considered to be independent according to the Commission rules.

Item 16B.  Code of Ethics

The Company has adopted a code of ethics that applies to its directors, officers and employees. A copy of our code of ethics is posted in the "Investor Relations" section of the Star Bulk Carriers Corp. website, and may be viewed at http://www.starbulk.com. Shareholders may be direct their requests to the attention of Investor Relations, Star Bulk Carriers Corp., 7, Fragoklisias Street, 2nd floor, Maroussi 151 25, Athens, Greece.

Item 16C.  Principal Accountant Fees and Services

Deloitte, Hadjipavlou, Sofianos & Cambanis S.A., Certified Auditors Accountants S.A, or Deloitte, have audited our annual consolidated financial statements acting as our Independent Registered Public Accounting Firm for the fiscal years ended December 31, 2007, 2008, 2009 and 2010.

The table below sets forth the total fees for the services performed by Deloitte in 2008, 2009 and 2010, and breaks these amounts by category of services.

(In thousands of Dollars)	2009	2010
Audit fees	738	411
Audit-related fees	-	83
Tax fees	-	-
All other fees	-	-
Total fees	738	494

The Audit Committee is responsible for the appointment, replacement, compensation, evaluation and oversight of the work of the independent auditors. As part of this responsibility, the Audit Committee pre-approves the audit and non-audit services performed by the independent auditors in order to assure that they do not impair the auditor's independence from the Company. The Audit Committee has adopted a policy which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditors may be pre-approved.

Item 16D.  Exemptions from the Listing Standards for Audit Committees

Not Applicable.

Item 16E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not Applicable.

Item 16F.  Change in Registrants Certifying Accountant

Not Applicable.

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Item 16G.  Corporate Governance

As a foreign private issuer, we are permitted to follow home country practices in lieu of certain Nasdaq corporate governance requirements. We have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands.  We are exempt from many of Nasdaq's corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq corporate governance practices and the establishment and composition of an audit committee and a formal written audit committee charter. The practices we follow in lieu of Nasdaq's corporate governance requirements are as follows:

· Our board of directors is comprised of directors a majority of whom are independent; however, we cannot assure you that in the future we will have a majority of independent directors.  Our board of directors does not hold annual meetings at which only independent directors are present.

· Consistent with Marshall Islands law requirements, in lieu of obtaining an independent review of related party transactions for conflicts of interests, our amended and restated bylaws require any director who has a potential conflict of interest to identify and declare the nature of the conflict to the board of directors at the next meeting of the board of directors. Our code of ethics and amended and restated bylaws additionally provide that related party transactions must be approved by a majority of the independent and disinterested directors.  If the votes of such independent and disinterested directors are insufficient to constitute an act of the Board then the related party transaction may be approved by a unanimous vote of the disinterested directors.

· In lieu of obtaining shareholder approval prior to the issuance of designated securities, we plan to obtain the approval of our board of directors for such share issuances.

· In lieu of an audit committee comprised of a minimum of three directors all of which are independent and a compensation committee comprised solely of independent directors, our audit committee consists of two independent directors and our compensation committee consists of an executive director and two independent directors.

As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law.  Consistent with Marshall Islands law and as provided in our amended and restated bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting.  This notification will contain, among other things, information regarding business to be transacted at the meeting.  In addition, our amended and restated bylaws provide that shareholders must give between 150 and 180 days advance notice to properly introduce any business at a meeting of the shareholders.

Other than as noted above, we are in full compliance with applicable Nasdaq corporate governance standard requirements for U.S. domestic issuers.

PART III

Item 17.  Financial Statements

See Item 18. "Financial Statements."

Item 18.  Financial Statements

The following consolidated financial statements, beginning on page F-1, together with the report of Deloitte thereon, are filed as a part of this report.

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Item 19. Exhibits

Number	Description of Exhibition
1.1	Form of Third Amended and Restated Articles of Incorporation of Star Bulk Carriers Corp.
1.2	Amended and Restated bylaws of the Company (1)
2.1	Form of Share Certificate (2)
2.2	Form of Warrant Certificate (3)
2.3	Form of 2007 Equity Incentive Plan (4)
2.4	2010 Equity Incentive Plan
2.5	Form of Warrant Agreement between American Stock Transfer & Trust Company and the Registrant (5)
2.6	Registration Rights Agreement (6)
4.1	Management Agreement with Combine Marine Inc. (7)
4.2	Master Agreement, as amended (8)
4.3	Supplemental Agreement (9)
4.4	Loan Agreement with Commerzbank AG dated December 27, 2007 (10)
4.5	First Supplemental Agreement with Commerzbank AG dated June 10, 2009
4.6	Second Supplemental Agreement with Commerzbank AG dated January 27, 2010
4.7	Loan Agreement with Piraeus Bank A.E. dated April 14, 2008 (11)
4.8	Amendment No. 1 to Loan Agreement with Piraeus Bank A.E. dated April 17, 2008 (12)
4.9	Amendment No. 2. to Loan Agreement with Piraeus Bank A.E. dated September 18, 2008 (13)
4.10	First Supplemental Agreement with Piraeus Bank A.E. dated May 7, 2009
4.11	Loan Agreement with Piraeus Bank A.E. dated July 1, 2008 (14)
4.12	Amending and Restating Agreement with Piraeus Bank A.E. dated May 25, 2009
4.13	First Supplemental Agreement with Piraeus Bank A.E. dated September 29, 2010
4.14	Waiver Agreement with Commerzbank AG dated March 12, 2009 (15)
4.15	Waiver Agreement with Piraeus Bank A.E., as Agent, dated March 10, 2009 (16)
4.16	Waiver Agreement with Piraeus Bank A.E. dated March 10, 2009 (17)
4.17	Amendment No. 1 to the Waiver Agreement with Commerzbank AG dated December 11, 2009 (18)
4.18	Loan Agreement with Commerzbank AG dated September 3, 2010
4.19	Loan Agreement with Credit Agricole Corporate and Investment Bank dated January 20, 2011
8.1	Subsidiaries of the Company
12.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
12.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
13.1	Certification of the Principal Executive Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of the Principal Financial Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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15.1	Consent of Independent Registered Public Accounting Firm (Deloitte)
(1)	Incorporated by reference to Exhibit 3.1 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on March 14, 2007.
(2)	Incorporated by reference to Exhibit 4.1 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on March 14, 2007.
(3)	Incorporated by reference to Exhibit 4.3 of Star Maritime's Registration Statement (File No. 333-125662), which was filed with the Commission on October 26, 2005.
(4)	Incorporated by reference to Exhibit 10.2 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on March 14, 2007.
(5)	Incorporated by reference to Exhibit 4.4 of Star Maritime's Registration Statement (File No. 333-125662), which was filed with the Commission on June 9, 2005.
(6)	Incorporated by reference to Exhibit 10.13 of Star Maritime's Registration Statement (File No. 333-125662), which was filed with the Commission on June 9, 2005.
(7)	Incorporated by reference to Exhibit 10.16 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on May 24, 2007.
(8)	Incorporated by reference to Exhibit 10.19 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on October 12, 2007.
(9)	Incorporated by reference to Exhibit 10.11 of the Company's Joint Proxy/Registration Statement (File No. 333-141296), which was filed with the Commission on March 14, 2007.
(10)	Incorporated by reference to Exhibit 4.5 of the Company's Annual Report for the year ended December 31, 2007 (File No. 001-33869), which was filed with the Commission on June 30, 2008.
(11)	Incorporated by reference to Exhibit 4.6 of the Company's Annual Report for the year ended December 31, 2007 (File No. 001-33869), which was filed with the Commission on June 30, 2008.
(12)	Incorporated by reference to Exhibit 4.7 of the Company's Annual Report for the year ended December 31, 2007 (File No. 001-33869), which was filed with the Commission on June 30, 2008.
(13)	Incorporated by reference to Exhibit 10.24 of the Company's Registration Statement on Form F-3 (File No. 333-153304), which was filed with the Commission on October 10, 2008.
(14)	Incorporated by reference to Exhibit 10.23 of the Company's Registration Statement on Form F-3 (File No. 333-153304), which was filed with the Commission on September 2, 2008.
(15)	Incorporated by reference to Exhibit 4.10 of the Company's Annual Report for the year ended December 31, 2008 (File No. 001-33869), which was filed with the Commission on April 16, 2009.
(16)	Incorporated by reference to Exhibit 4.11 of the Company's Annual Report for the year ended December 31, 2008 (File No. 001-33869), which was filed with the Commission on April 16, 2009.
(17)	Incorporated by reference to Exhibit 4.12 of the Company's Annual Report for the year ended December 31, 2008 (File No. 001-33869), which was filed with the Commission on April 16, 2009.
(18)	Incorporated by reference to Exhibit 4.13 of the Company's Annual Report for the year ended December 31, 2009 (File No. 001-33869), which was filed with the Commission on March 23, 2010.

90

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	Star Bulk Carriers Corp.
	(Registrant)
Date March 30, 2011	By:	/s/ Spyros Capralos
	Name:	Spyros Capralos
	Title:	President and Chief Executive Officer

91

STAR BULK CARRIERS CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm (Deloitte. Hadjipavlou, Sofianos & Cambanis S.A.)	F-2
Consolidated Balance Sheets as of December 31, 2009 and 2010	F-3
Consolidated Statements of Operations for the years ended December 31, 2008, 2009 and 2010	F-4
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2008, 2009 and 2010	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2009 and 2010	F-6
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Star Bulk Carriers Corp.

Majuro, Republic of the Marshall Islands

We have audited the accompanying consolidated balance sheets of Star Bulk Carriers Corp. and subsidiaries (the "Company") as of December 31, 2009 and 2010, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2010.  These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Star Bulk Carriers Corp. and subsidiaries as of December 31, 2009 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 29, 2011 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte.

Hadjipavlou, Sofianos & Cambanis S.A.

Athens, Greece

March 29, 2011

F-2

STAR BULK CARRIERS CORP.
Consolidated Balance Sheets
December 31, 2009 and 2010
(Expressed in thousands of U.S. dollars)
	2009		2010
ASSETS
Current Assets
Cash and cash equivalents	$	40,142	$	12,824
Restricted cash (Note 2h)		8,353		1,550
Trade accounts receivable		5,449		4,652
Inventories (Note 4)		982		1,094
Due from related parties (Note 3)		2,507		-
Due from managers		147		75
Derivative instruments (Note 16)		128		-
Accrued income		-		397
Prepaid expenses and other receivables		3,120		3,326
Total Current Assets		60,828		23,918
FIXED ASSETS
Advances for vessels under construction (Note 5)		-		43,473
Vessels and other fixed assets, net  (Note 6)		668,698		610,817
Total Fixed Assets		668,698		654,290
OTHER NON-CURRENT ASSETS
Deferred finance charges		1,041		1,022
Derivative instruments (Note 16)		154		-
Restricted cash (Note 2h)		29,920		24,020
TOTAL ASSETS	$	760,641	$	703,250
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt (Note 8)	$	59,675	$	33,785
Accounts payable		3,977		3,233
Due to related parties (Note 3)		336		603
Due to managers		-		55
Accrued liabilities (Note 12)		2,293		1,865
Deferred revenue		4,811		3,694
Total Current Liabilities		71,092		43,235
NON CURRENT LIABILITIES
Long term debt (Note 8)		187,575		171,044
Fair value of below market acquired time charter  (Note 7)		1,812		452
Deferred revenue		847		203
Other non-current liability		58		64
TOTAL LIABILITIES		261,384		214,998
Commitments & Contingencies (Note 14)		-		-
Stockholders' Equity
Preferred Stock; $0.01 par value authorized 25,000,000 shares; none issued or outstanding at December 31, 2009 and 2010 (Note 9)		-		-
Common Stock, $0.01 par value, 300,000,000 and 300,000,000 shares authorized at December 31, 2009 and 2010, respectively;  61,104,760 and 63,410,360 shares issued and outstanding at December 31, 2009 and 2010, respectively (Note 9)		611		634
Additional paid in capital  (Note 9)		483,282		489,770
Retained earnings/ (Accumulated deficit)		15,364		(2,152	)
Total Stockholders' Equity		499,257		488,252
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	760,641	$	703,250
The accompanying notes are an integral part of these consolidated financial statements

F-3

STAR BULK CARRIERS CORP Consolidated Statements of Operations For the years ended December 31, 2008, 2009 and 2010
(Expressed in thousands of U.S. dollars except for share and per share data)
		Year ended			Year ended			Year ended
		December 31,			December 31,			December 31,
		2008			2009			2010
REVENUES:
Voyage revenues	$		238,883		$	142,351		$	121,042
EXPENSES/(INCOME):
Voyage expenses (Note 15)			3,504			15,374			16,839
Vessel operating expenses (Note 15)			26,198			30,168			22,349
Management fees			975			771			164
Management fees-related party			392			-			-
Drydocking expenses			7,881			6,122			6,576
Depreciation (Note 6)			51,050			58,298			46,937
Vessel impairment loss (Note 6)			3,646			75,208			34,947
(Gain)/Loss on derivative instruments (Note 16)			(251	)		2,154			2,083
Gain on time charter agreement termination (Note 7)			(9,711	)		(16,219	)		-
Loss on time charter agreement termination (Note  7)			-			11,040			-
Other operating income (Note 14)			-			-			(26,648	)
Loss on bad debts			-			-			2,131
General and administrative expenses			12,424			8,742			15,404
			96,108			191,658			120,782
Operating (loss)/profit			142,775			(49,307	)		260
OTHER INCOME/(EXPENSES):
Interest and finance costs (Note 8)			(10,238	)		(9,914	)		(5,916	)
Interest and other income			1,201			806			525
Total other income/(expense), net			(9,037	)		(9,108	)		(5,391	)
Net income /(loss)	$		133,738		$	(58,415	)	$	(5,131	)
Earnings/(loss) per share, basic (Note  10)	$		2.55		$	(0.96	)	$	(0.08	)
Earnings/(loss) per share, diluted (Note 10)	$		2.46		$	(0.96	)	$	(0.08	)
Weighted average number of shares outstanding, basic (Note 10)			52,477,947			60,873,421			61,489,162
Weighted average number of shares outstanding, diluted (Note 10)			54,447,985			60,873,421			61,489,162
The accompanying notes are an integral part of these consolidated financial statements

F-4

STAR BULK CARRIERS CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
For the years ended December 31, 2008, 2009 and 2010
(Expressed in thousands of U.S. dollars except for share and per share data)
							Additional						Total
	Common Stock						Paid-in						stockholders'
	# of Shares			Par Value			Capital			Retained earnings/ (Accumulated deficit)			Equity
BALANCE, January 1, 2008	$	42,516,433		$	425		$	368,454		$	6,499		$	375,378
Net income for the year ended December 31, 2008	$	-		$	-		$	-		$	133,738		$	133,738
Warrants exercised		11,769,486			118			94,037			-			94,155
Warrants and common stock buyback		(1,247,000	)		(12	)		(13,437	)		-			(13,449	)
Issuance of common stock to TMT		803,481			8			18,938			-			18,946
Issuance of common stock to stockholders		4,255,002			42			7,617			(7,659	)		-
Issuance of vested and non-vested shares and amortization of stock based compensation		315,000			3			3,983			-			3,986
Dividends declared and paid ($0.98  per share)		-			-			-			(52,614	)		(52,614	)
BALANCE, December 31, 2008	$	58,412,402		$	584		$	479,592		$	79,964		$	560,140
Net loss for the year ended December 31, 2009	$	-		$	-		$	-		$	(58,415	)	$	(58,415	)
Issuance of common stock to TMT		803,481			8			(8	)		-			-
Issuance of common stock		818,877			8			1,877			-			1,885
Issuance of vested and non-vested shares and amortization of stock based compensation		1,070,000			11			1,821			-			1,832
Dividends declared and paid ($0.10  per share)		-			-			-			(6,185	)		(6,185	)
BALANCE, December 31, 2009	$	61,104,760		$	611		$	483,282		$	15,364		$	499,257
Net loss for the year ended December 31, 2010	$	-		$	-		$	-		$	(5,131	)	$	(5,131	)
Issuance of vested and non-vested shares and amortization of stock based compensation		2,305,600			23			6,488			-			6,511
Dividends declared and paid ($0.20  per share)		-			-			-			(12,385	)		(12,385	)
BALANCE, December 31, 2010	$	63,410,360		$	634		$	489,770		$	(2,152	)	$	488,252
The accompanying notes are an integral part of these consolidated financial statements

F-5

STAR BULK CARRIERS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2008, 2009 and 2010
(Expressed in thousands of U.S. dollars)
		Year ended			Year ended			Year ended
		December 31,			December 31,			December 31,
		2008			2009			2010
Cash Flows from Operating Activities:
Net income/(loss)	$		133,738		$	(58,415	)	$	(5,131	)
Adjustments to reconcile net income /(loss) to net cash provided by operating activities:
Depreciation			51,050			58,298			46,937
Amortization of  fair value of above market acquired time charter			2,221			3,108			-
Amortization of  fair value of below market acquired time charter			(82,754	)		(8,843	)		(1,360	)
Amortization of deferred finance charges			234			350			329
Loss on time charter agreement termination			-			121			-
Vessel impairment loss			3,646			75,208			34,692
Stock- based compensation			3,986			1,832			6,511
Change in fair value of derivatives			(251	)		(31	)		282
Other non-cash charges			53			5			5
Loss on bad debts			-			-			2,131
Changes in operating assets and liabilities:
(Increase)/Decrease in:
Restricted cash for forward freight and bunkers  agreements			(2,486	)		(3,267	)		5,753
Trade accounts receivable			(3,379	)		(2,070	)		(1,334	)
Inventories			(678	)		294			(112	)
Accrued income			-			-			(397	)
Prepaid expenses and other receivables			(462	)		(2,440	)		(326	)
Deposit on forward freight agreements			(2,514	)		2,514			-
Due from related parties			(465	)		(2,042	)		2,507
Due from managers			(1,897	)		1,870			72
Increase/(Decrease) in:
Accounts payable			864			2,946			(744	)
Due to related parties			(324	)		180			267
Accrued liabilities			2,455			(773	)		(427	)
Due to managers			-			-			55
Deferred revenue			7,710			(2,968	)		(1,761	)
Net Cash provided by Operating Activities			110,747			65,877			87,949
Cash Flows from Investing Activities:
Advances for newbuildings			-			-			(43,473	)
Additions to vessel cost and other fixed assets			(413,457	)		(49	)		(44,090	)
Cash paid for above market acquired time charter			(14,417	)		-			-
Cash proceeds from vessel sale			16,579			19,129			20,342
Insurance proceeds			-			-			120
Decrease in restricted cash			-			-			7,600
Increase in restricted cash			(12,010	)		(20,510	)		(650	)
Net cash used in Investing Activities			(423,305	)		(1,430	)		(60,151	)
Cash Flows from Financing Activities:
Proceeds from bank loans			317,500			-			26,000
Loan repayment			(21,000	)		(49,250	)		(68,421	)
Repurchase of shares and warrants			(13,449	)		-			-
Proceeds from exercise of warrants			94,236			-			-
Proceeds from dividend reinvestment			-			1,885			-
Financing fees paid			(1,625	)		(230	)		(310	)
Cash dividend			(52,614	)		(6,185	)		(12,385	)
Net cash provided by/(used in) Financing Activities			323,048			(53,780	)		(55,116	)

F-6

Net increase/(decrease) in cash and cash equivalents		10,490		10,667		(27,318	)
Cash and cash equivalents at beginning of year		18,985		29,475		40,142
Cash and cash equivalents at end of the year	$	29,475	$	40,142	$	12,824
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest		9,378		9,206		5,489
Non-cash items: Issue of common stock at fair value for delivery of vessels		18,946		-		-
Fair value of below market acquired time charters		79,021		-		-
Issuance of common stock to stockholders (non-cash stock dividend)		7,659		-		-
The accompanying notes are an integral part of these consolidated financial statements

F-7

   STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

1.      Basis of Presentation and General Information:

On November 30, 2007, Star Maritime Acquisition Corp. ("Star Maritime") incorporated in the state of Delaware, merged into its wholly-owned subsidiary at the time, Star Bulk Carriers Corp. ("Star Bulk") a company incorporated in Marshall Islands, with Star Bulk being the surviving entity (collectively, the "Company," "we" or "us").  This merger is referred to as "Redomiciliation Merger" or the "Merger".

The accompanying consolidated financial statements as of and for the years ended December 31, 2008, 2009 and 2010 include the accounts of Star Bulk and its wholly owned subsidiaries.  

Star Bulk was incorporated on December 13, 2006 under the laws of the Marshall Islands and is the sole owner of all of the outstanding shares of Star Bulk Management Inc. and the ship-owning subsidiaries as set forth below.

Star Maritime was organized on May 13, 2005 as a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more assets or target businesses in the shipping industry.  On December 21, 2005, Star Maritime consummated its initial public offering of 18,867,500 units, at a price of $10.00 per unit, each unit consisting of one share of Star Maritime common stock and one warrant to purchase one share of Star Maritime common stock at an exercise price of $8.00 per share.  In addition, during December 2005 the Company completed a private placement of an aggregate of 1,132,500 units, each unit consisting of one share of common stock and one warrant.  The entire gross proceeds of the initial public offering amounting to $188,675 were deposited in a trust account.

On January 12, 2007, Star Maritime and Star Bulk entered into definitive agreements (the "Master Agreement") to acquire a fleet of eight drybulk carriers (the "Transaction") from certain subsidiaries of TMT Co. Ltd. ("TMT"), a shipping company headquartered in Taiwan. These eight drybulk carriers are referred to as the "initial fleet", or "initial vessels".  The aggregate purchase price specified in the Master Agreement for the initial fleet was $224,500 in cash and 12,537,645 shares of common stock of Star Bulk, issued on November 30, 2007.  The Company also agreed to issue to TMT an additional stock consideration of 1,606,962 common shares of Star Bulk in 2008 and 2009.  On July 17, 2008 the Company issued 803,481 shares out of additional stock consideration of 1,606,962 of common stock of StarBulk to TMT.  On April 28, 2009 the remaining 803,481 shares of Star Bulk's common stock were issued to TMT.

F-8

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

1.      Basis of Presentation and General Information-(continued):

On November 27, 2007 the Company obtained shareholder approval for the acquisition of the initial fleet and for effecting the Redomiciliation Merger, which became effective on November 30, 2007. The shares of Star Maritime were exchanged on one-for-one basis with shares of Star Bulk and Star Bulk assumed the outstanding warrants of Star Maritime.  Subsequently, Star Maritime shares ceased trading on American Stock Exchange (Amex).

Star Bulk shares and warrants started trading on the NASDAQ Global Select Market on December 3, 2007 under the ticker symbols SBLK and SBLKW, respectively.  Immediately following the effective date of the Redomiciliation Merger, TMT and its affiliates owned 30.2% of Star Bulk's outstanding common stock.

The Company began operations on December 3, 2007 with the delivery of its first vessel Star Epsilon.

F-9

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

1.      Basis of Presentation and General Information-(continued):

Below is the list of the Company's wholly owned ship-owning subsidiaries as of December 31, 2010:

Wholly Owned Subsidiaries	Vessel Name	DWT	Date Delivered to Star Bulk	Year Built
Star Bulk Management Inc.	-	-	-	-
Starbulk S.A.	-	-	-	-
Vessels in operation at December 31, 2010
Star Epsilon LLC	Star Epsilon (ex G Duckling)*	52,402	December 3, 2007	2001
Star Theta LLC	Star Theta (ex J Duckling)*	52,425	December 6, 2007	2003
Star Kappa LLC	Star Kappa (ex E Duckling)	52,055	December 14, 2007	2001
Star Zeta LLC	Star Zeta (ex I Duckling)*	52,994	January 2, 2008	2003
Star Delta LLC	Star Delta (ex F Duckling)*	52,434	January 2, 2008	2000
Star Gamma LLC	Star Gamma (ex C Duckling)*	53,098	January 4, 2008	2002
Lamda LLC	Star Sigma	184,403	April 15, 2008	1991
Star Omicron LLC	Star Omicron	53,489	April 17, 2008	2005
Star Cosmo LLC	Star Cosmo	52,247	July 1, 2008	2005
Star Ypsilon LLC	Star Ypsilon	150,940	September 18, 2008	1991
Star Aurora LLC	Star Aurora	171,199	September 8, 2010	2000
	Vessels disposed**
Star Iota LLC	Star Iota*	78,585	March 7, 2008	1983
Star Alpha LLC	Star Alpha (ex A Duckling)*	175,075	January 9, 2008	1992
Star Beta LLC	Star Beta (ex B Duckling)*	174,691	December 28, 2007	1993

* Initial fleet or initial vessels

** For vessels disposed refer to Note 6

Below is the list of the Company's vessels under construction.

New-buildings	Type	DWT	Expected Delivery date
Hull PN-063 (tbr Star Borealis)	Capesize	180,000	September 2011
Hull PN-064 (tbr Star Polaris)	Capesize	180,000	November 2011

F-10

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

1.      Basis of Presentation and General Information-(continued):

Charterers individually accounting for more than 10% of the Company's voyage revenues during the years ended December 31, 2008, 2009 and 2010 are as follows:

Charterer	2008	2009	2010
A	-	12%	-
B	19%	-	-
C	10%	-	-
D	-	20%	21%
E	-	12%	17%
F	-	11%	13%
G	-	10%	-
H	-	-	10%
I	-	-	14%
J	-	-	12%

2.      Significant Accounting Policies:

a)   Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which include the accounts of Star Bulk and its wholly owned subsidiaries referred to in Note 1 above. All inter-company accounts and transactions have been eliminated in consolidation.

b)   Use of estimates: The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the accompanying consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

c)  Other Comprehensive Income: The Company follows guidance related to Reporting Comprehensive Income,  which requires separate presentation of certain transactions, which are recorded directly as components of stockholders' equity. The Company has no such transactions which affect comprehensive income and, accordingly, comprehensive income equals net income / (loss) for all periods presented.

F-11

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.       Significant Accounting Policies – (continued):

d)  Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash, trade accounts receivable and derivative contracts (bunker swaps and forward freight agreements).  The Company's policy is to place cash and cash equivalents, restricted cash with financial institutions evaluated as being creditworthy and are exposed to minimal interest rate and credit risk.  The Company may be exposed to credit risk in the event of non-performance by counter parties to derivative instruments; however, the Company a) in over-the-counter transactions limits its exposure by diversifying among counter parties with high credit ratings, and b) all of the Company's Forward Freight Agreements ("FFAs"). are settled on a daily basis through London Clearing House (LCH). The Company, consistent with drybulk shipping industry practice, has not independently analyzed the creditworthiness of the charterers and generally does not require collateral for its trade accounts receivable.

e)   Income taxes:  Star Bulk is not liable for any income tax on its income derived from shipping operations because the countries in which the subsidiaries ship-owning companies and the management company are incorporated do not levy tax on income, but rather a tonnage tax on vessels.

f)  Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar since the Company's vessels operate in international shipping markets, and therefore primarily transact business in U.S. Dollars. The Company's books of accounts are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the consolidated balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are included in Interest and other income in the accompanying consolidated statements of operations.

F-12

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.       Significant Accounting Policies – (continued):

g)   Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

h)  Restricted Cash: Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company's borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. Restricted cash also consists of the restricted portion of both FFAs and bunker swaps base and margin collaterals with London Clearing House (LCH) and Marfin Bank, respectively. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.

i)  Trade accounts receivable:   The amount shown as trade accounts receivable, at each balance sheet date, includes estimated recoveries from each voyage or time charter. At each balance sheet date, the Company provides for doubtful accounts on the basis of specific identified doubtful receivables.  At December 31, 2009 and 2010, no provision for doubtful debts was considered necessary.

j)  Inventories: Inventories consist of consumable lubricants, which are stated at the lower of cost or market value. Cost is determined by the first in, first out method.

F-13

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

k)  Vessels, Net:Vessels are stated at cost, which consists of the purchase price and any material expenses incurred upon acquisition, such as (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for her initial voyage).  Otherwise these amounts are charged to expense as incurred.

The aggregate purchase price paid for the eight vessels in the initial fleet from certain subsidiaries of TMT consisted of cash and common shares of Star Bulk. The stock consideration was measured based on the fair market value of the Company's shares at the time each vessel was delivered. The additional stock consideration of 1,606,962 common shares (Note 1) was measured when performance by TMT was complete upon delivery of the last vessel of the initial fleet on March 7, 2008. The aggregate purchase price consisting of cash and stock consideration was allocated to the acquired vessels based on vessel relative fair values on their respective dates of delivery to Star Bulk.

The cost of each of the Company's vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value (vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate per ton).  Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard.  When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted.   

l) Advances for vessels under construction: Advances made to shipyards during construction periods are classified as "Advances for vessels under construction" until the date of delivery and acceptance of the vessel, at which date they are reclassified to " Vessels and other fixed assets, net ". Advances for vessels under construction also include supervision costs, amounts paid under engineering contracts, capitalized interest and other expenses directly related to the construction of the vessel. Financing costs incurred during the construction period of the vessels are also capitalized and included in the vessels' cost.

m) Fair value of above/below market acquired time charter: The Company records all identified tangible and intangible assets associated with the acquisition of a vessel or liabilities at fair value.  Fair value of above or below market acquired time charters is determined by comparing existing charter rates in the acquired time charter agreements with the market rates for equivalent time charter agreements prevailing at the time the foregoing vessels are delivered. The present values representing the fair value of the above or below market acquired time charters are recorded as an intangible asset or liability, respectively.  Such intangible asset or liability is recognized ratably as an adjustment to revenues over the remaining term of the assumed time charter.

F-14

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

n)  Impairment of Long-Lived Assets: The Company follows guidance related to Impairment or Disposal of Long-lived Assets which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company should evaluate the asset for an impairment loss. Measurement of the impairment loss is based on the fair value.  In this respect, management regularly reviews the carrying amount of the vessels on vessel by vessel basis when events and circumstances indicate that the carrying amount of the vessels might not be recoverable.

At December 31, 2009 and 2010, the Company performed an impairment review of the Company's vessels due to the global economic downturn and the prevailing conditions in the shipping industry. The Company compared undiscounted cash flows to the carrying values for the Company's vessels to determine if the assets were impaired. Significant management judgment is required in forecasting future operating results, used in this method. These estimates are consistent with the plans and forecasts used by management to conduct its business. As a result of this analysis, no assets were considered to be impaired and the Company has not recognized any impairment charge for its vessels, for the years ended December 31, 2008, 2009 and 2010, other than vessels classified as held for sale during the years ended December 31, 2009 and 2010 (Note 6).

F-15

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

o) Vessels held for sale: It is the Company's policy to dispose of vessels when suitable opportunities occur and not necessarily to keep them until the end of their useful life. The Company classifies vessels as being held for sale when: management has committed to a plan to sell the vessels; the vessels are available for immediate sale in its present condition; an active program to locate a buyer and other actions required to complete the plan to sell the vessels have been initiated; the sale of the vessels is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year; the vessels are being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell.  These vessels are not depreciated once they meet the criteria to be classified as held for sale.

p)  Financing Costs: Fees paid to lenders or required to be paid to third parties on the lender's behalf for obtaining loans are recorded as deferred charges.  Deferred charges are expensed as interest and finance costs using the effective interest rate method over the duration of the respective loan facility.

q)  Pension and retirement benefit obligations—crew:The ship-owning subsidiaries included in the consolidated financial statements employ the crew on board under short-term contracts (usually up to eight months) and, accordingly, are not liable for any pension or post-retirement benefits.

F-16

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

r)  Pension and retirement benefit obligations—administrative personnel: Administrative employees are covered by state-sponsored pension funds. Both employees and the Company are required to contribute a portion of the employees' gross salary to the fund.  The related expense is recorded under "General and administrative expenses" in the accompanying consolidated statements of operations. Upon retirement, the state-sponsored pension funds are responsible for paying the employees retirement benefits without recourse to the Company.

s)  Stock incentive plan awards:  Share-based compensation represents vested and non-vested shares granted to employees and to directors, for their services as directors, and is included in "General and administrative expenses" in the consolidated statements of operations. These shares are measured at their fair value equal to the market value of the Company's common stock on the grant date. The shares that do not contain any future service vesting conditions are considered vested shares and the total fair value of such shares is expensed on the grant date. Guidance related to Stock Compensation describes two generally accepted methods of recognizing expense for non-vested share awards with a graded vesting schedule for financial reporting purposes: 1) the ''accelerated method'', which treats an award with multiple vesting dates as multiple awards and results in a front-loading of the costs of the award and 2) the ''straight-line method'' which treats such awards as a single award and results in recognition of the cost ratably over the entire vesting period.  The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and a total fair value of such shares is recognized using the accelarated method.

t)  Dry-docking and special survey expenses:  Dry-docking and special survey expenses are expensed when incurred.

F-17

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

u)  Accounting for Revenue and Related Expenses:The Company generates its revenues from charterers for the charterhire of its vessels. Vessels are chartered mainly using time charters, where a contract is entered into for the use of a vessel for a specific period of time and a specified daily charterhire rate. Under time charters, voyage costs, such as fuel and port charges are borne and paid by the charterer.  Company's time charters agreements are classified as operating leases. Revenues under operating lease arrangements are recognized when a charter agreement exists, charter rate is fixed and determinable, the vessel is made available to the lessee, and collection of the related revenue is reasonably assured. Revenues are recognized ratably on a straight line basis over the period of the respective charter agreement in accordance with guidance related to Leases.

 Voyage charter agreements are charterhires, where a contract is made in the spot market for the use of a vessel for a specific voyage at a specified charter rate. Revenue from voyage charter agreements is recognized on a pro-rata basis over the duration of the voyage. Under voyage charter agreements, all voyage costs are borne and paid by the Company.  Demurrage income, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized when arrangement exists, services have been performed, the amount is fixed or determinable and collection is reasonably assured.

Deferred revenue includes cash received prior to the consolidated balance sheet date and is related to revenue earned after such date. The portion of the deferred revenue that will be earned within the next twelve months is classified as current liability and the remaining as long term liability.

Vessel operating expenses include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes, regulatory fees, technical management fees and other miscellaneous expenses. Furthermore, payments in advance for services are recorded as prepaid expenses.

Brokerage commissions are paid by the Company. Brokerage commissions are recognized over the related charter period and included in voyage expenses. Voyage expenses and vessel operating expenses are expensed as incurred.

F-18

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

v)  Fair value of financial instruments: On January 1, 2008, the Company adopted guidance related to Fair Value Measurements & Disclosures for financial assets and liabilities and any other assets and liabilities carried at fair value and are measured on recurring basis. This pronouncement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The Company has provided additional fair value disclosures in Note 16.

w)Earnings per Common Share:  Earnings per share are computed in accordance with guidance related to Earnings per Share.  Basic earnings or loss per share are calculated by dividing net income or loss available to common shareholders by the basic weighted average number of common shares outstanding during the period.  Diluted  income per share reflects the potential dilution assuming common shares were issued for the exercise of outstanding in-the-money warrants and non-vested shares and assuming the hypothetical proceeds, including proceeds from warrant exercise and average unrecognized stock-based compensation cost, thereof were used to purchase common shares at the average market price during the period such warrants and non-vested shares were outstanding (Note 10).

x)  Segment Reporting:The Company reports financial information and evaluates its operations by total charter revenues and not by the type of vessel, length of vessel employment, customer or type of charter. As a result, management, including the chief operating decision makers, reviews operating results solely by revenue per day and operating results of the fleet, and thus, the Company has determined that it operates under one reportable segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.

F-19

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

2.      Significant Accounting Policies – (continued):

y)  Recent Accounting Pronouncements: There are no recent accounting pronouncements that their adoption would have a material effect on the Company's consolidated financial statements in the current year or expected to have an impact on future years.

3.      Transactions with Related Parties

Transactions and balances with related parties are analyzed as follows:

Balance Sheet

	December 31, 2009		December 31, 2010
Assets
Oceanbulk Maritime, S.A.(c)	$	2,507	$	-
Total assets	$	2,507	$	-
Liabilities
Interchart Shipping Inc. (d)	$	190	$	454
Management and Directors (e)		146		149
Total Liabilities	$	336	$	603

F-20

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

3.      Transactions with Related Parties-(continued):

Statement of operations

	Year ended December 31,
	2008		2009		2010
Revenues-TMT (a)	$	13,009	$	309	$	-
Voyage expenses-Combine (b)		95		-		-
Operating expenses-Combine (b)		1,440		-		-
Management fees-Combine (b)		434		-		-
General and Administrative-Combine (b)		67		-		-
Revenues Vinyl (c )		11,611		16,508		-
Commission on sale of vessel-Oceabulk (c)		99		184		660
Voyage expenses-Interchart (d)		396		1,472		1,540
Executive directors consultancy fees (e)		969		917		874
Non-executive directors compensation		149		126		206

(a) TMT Co. Ltd.:  Under the Master Agreement (Note 1) the Company issued to TMT 12,537,645 shares of Star Bulk's common stock representing the stock consideration portion of the aggregate purchase price of initial vessels and agreed to issue to TMT the additional stock consideration of 1,606,962 common shares of Star Bulk in 2008 and 2009.  On July 17, 2008 The Company issued 803,481 of the additional consideration of 1,606,962 shares of common stock of Star Bulk to TMT.On April 28, 2009 the remaining 803,481 shares of Star Bulk's common stock were issued to TMT.  

F-21

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

3.      Transactions with Related Parties-(continued):

(a)     TMT Co. Ltd-(continued):

Under the Master Agreement, as of December 31, 2007, Star Bulk took delivery of three vessels from the initial fleet as indicated in Note 1.   In addition, in December 2007, Star Bulk took delivery of the M/V Star Kappa from TMT, which was not part of the initial fleet for a cash consideration of $72,000. During the year ended December 31, 2008, Star Bulk had taken delivery of the remaining five vessels from the initial fleet as indicated in Note 1.

Star Gamma LLC, a wholly-owned subsidiary of Star Bulk, entered into a time charter agreement dated, February 23, 2007, with TMT for the Star Gamma. The charter rate for the Star Gamma was $28.5 per day for a term of one year. Star Iota LLC, a wholly-owned subsidiary of Star Bulk, entered into a time charter agreement, dated February 26, 2007, with TMT for the Star Iota. The charter rate for the Star Iota was $18 per day for a term of one year. For the years ended December 31, 2008 and 2009, the Company earned $13,009 and $309, respectively net revenue under the time charter party agreements with TMT which is included in "Voyage revenues" in the accompanying consolidated statements of operations.

TMT is a company controlled by Mr. Nobu Su, a former director of the Company. During the second quarter of 2008, Mr. Nobu Su's beneficial ownership decreased to 7%, and on October 20, 2008, he resigned from the board of directors of Star Bulk with immediate effect. As a result TMT ceased to be a related party to Star Bulk.

F-22

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

3.      Transactions with Related Parties-(continued):

(b) Combine Marine S.A. or ("Combine"):  Under an agreement dated May 4, 2007, Star Bulk appointed Combine, a company affiliated with Mr. Tsirigakis, Mr. Pappas and Mr. Christos Anagnostou, as interim manager of the vessels in the initial fleet. Under the agreement, Combine provided interim technical management and associated services, including legal services, to the vessels starting with their delivery to Star Bulk, and also provided such services and shore personnel prior to and during vessel delivery to Star Bulk in exchange for a flat fee of $10 per vessel prior to delivery and at a daily fee of $450 U.S. dollars per vessel after vessel's delivery and during the term of the agreement. Combine was entitled to be reimbursed by Star Bulk for out-of-pocket expenses incurred by Combine while managing the vessels and was obligated to provide Star Bulk with the full benefit of all discounts and rebates available to Combine. The term of the agreement was for one year from the date of delivery of each vessel. As of December 31, 2009 and 2010, none of Star Bulk's vessels were managed by Combine.

During the year ended December 31, 2008 Combine Marine S.A. charged $2,036 for operational and technical management services.

(c) Oceanbulk Maritime, S.A., or Oceanbulk: Star Bulk's director Mr. Petros Pappas is also the Honorary Chairman of Oceanbulk Maritime S.A, a ship management company of drybulk vessels and a related party.

On June 3, 2008, we entered into an agreement with Vinyl Navigation a company affiliated with Oceanbulk Maritime, S.A., a company founded by Star Bulk's Chairman, Mr. Petros Pappas, to acquire the Star Ypsilon, a Capesize drybulk carrier for the purchase price of $87,180, which was the same price that Vinyl Navigation had paid when it acquired the vessel from an unrelated third party. The Company eventually paid $86,940 due to the late delivery of the vessel.  Star Ypsilon was delivered to the Company on September 18, 2008. No commissions were charged to us on the purchase or the chartering of the Star Ypsilon.

F-23

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

3.      Transactions with Related Parties-(continued):

Oceanbulk Maritime, S.A., or Oceanbulk -(continued):

The Company acquired the Star Ypsilon with an existing above market time charter at an average daily hire rate of $91.9, and we recorded the fair market value of time charter acquired at $14,417 (Note 7) which during 2009 was amortized as a decrease to revenues until the early termination of the time charter agreement. Vinyl Navigation had a back-to back charter agreement with TMT, a company controlled by a former director of the Company, Mr. Nobu Su, on the same terms as Star Bulk's charter agreement with Vinyl Navigation.

On July 17, 2009, TMT repudiated the time charter agreement relating to Star Ypsilon.  Arbitration proceedings commenced on July 27, 2009 against TMT seeking damages resulting from TMT's repudiation of this time charter. A settlement was reached during October 2010 (Note 14iii) For the years ended December 31, 2008 and 2009, the Company earned $11,611 and $ 16,508, respectively for net revenue under the time charter party agreements with Vinyl and included in "Voyage revenues" in the accompanying consolidated statements of operations.  The Company also paid to Oceanbulk a brokerage commission amounting to $99 regarding the sale of vessel Star Iota during the year ended December 31, 2008, $184 regarding the sale of vessel Star Alpha during the year ended December 31, 2009 and $660 regarding the sale of vessel Star Beta during the year ended December 31, 2010 (Note 6). As of December 31, 2009 and 2010, Star Bulk had an outstanding receivable balance of $2,507 and $0, respectively resulting from chartering and brokerage activities with Oceanbulk.

(d) Interchart Shipping Inc. or Interchart: Interchart –a company affiliated to Oceanbulk- acting as a chartering broker of all Company's vessels.  As of December 31, 2009 and 2010 Star Bulk had an outstanding liability of $190 and $454, respectively to Interchart. During the years ended December 31, 2008, 2009 and 2010 the brokerage commission of 1.25% on charter revenue paid to Interchart amounted $396, $1,472 and $1,540, respectively and is included in "Voyage expenses" in the accompanying consolidated statements of operations.

F-24

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

3.      Transactions with Related Parties-(continued):

 (e)  Management and Directors Fees:On October 3, 2007, Star Bulk has entered into separate consulting agreements with companies owned and controlled by the Chief Executive Officer and the Chief Financial Officer, for the services provided by the Chief Executive Officer and the Chief Financial Officer, respectively. Each of these agreements has a term of three years unless terminated earlier in accordance with the terms of such agreements and during 2010 were automatically renewed for the successive year.  Under the consulting agreements, each company controlled by the Chief Executive Officer and the Chief Financial Officer receive an annual consulting fee of €370 (approx. $492) and €250 (approx. $333) respectively. 

Additionally, the Chief Executive Officer and the Chief Financial Officer are entitled to receive benefits under each of their consultancy agreements with Star Bulk, amongst others each is entitled to receive an annual discretionary bonus, to be determined by Star Bulk's board of directors in its sole discretion.  The related expenses for the years ended December 31, 2008, 2009 and 2010 were $969, $917 and $874, respectively and are included under "General and administrative expenses" in the accompanying consolidated statements of operations.

As of December 31, 2009 and December 31, 2010, Star Bulk had an outstanding payable balance of $146 and $149, respectively with its Management and Directors, representing unpaid fees.

F-25

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

4.      Inventories:

The amounts shown in the accompanying consolidated balance sheets are comprised of lubricants remaining on board the vessels and amounted to $982 and $1,094 as of December 31, 2009 and 2010, respectively.

5.      Advances for Vessels under Construction:

On March 24 and April 6, 2010 the Company signed two contracts with the shipbuilder Hanjin to build two Capesize vessels at a price of $106,880 in aggregate with expected delivery in September and November 2011, respectively.

During the year ended December 31, 2010 the Company paid advances to the shipbuilder amounting to $21,432 and $21,320 for the PN-063 (tbr Star Borealis) and PN-064 (tbr Star Polaris), respectively, and capitalized interest and other expenses of $644 and $77, respectively.

6.      Vessels and other fixed assets:

The amount shown in the accompanying consolidated balance sheets are analyzed as follows:

	2009			2010
Cost
Vessels	$	760,474		$	736,831
Other fixed assets		556			575
Total cost		761,030			737,406
Accumulated depreciation		(92,332	)		(126,589	)
Vessels and other fixed assets, net	$	668,698		$	610,817

The impact of cash and stock consideration on the financial statements for the vessels acquired in 2008 and 2010 and sold during 2008, 2009 and 2010 is analyzed as follows:

F-26

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

6.      Vessels and other fixed assets-(continued):

Vessels acquisition for the year ended December 31, 2008

During the first quarter of 2008, Star Bulk took delivery of the remaining five vessels from initial fleet (Note 1) and paid the remaining cash consideration of $115,515 to TMT and $181 of capitalizable costs. The additional stock consideration of 1,606,962 common shares (Note 1) was determined to be $18,946 and was measured based on the Company's share price on March 7, 2008 when performance by TMT was complete upon delivery of the last initial vessel, Star Iota.

In addition to the initial vessels, during the year ended December 31, 2008 the Company acquired four additional vessels: Star Sigma, Star Omicron, Star Cosmo and Star Ypsilon (Note 3) and related time charter agreements (Note 7) for a cash purchase price of $311,783 in aggregate.

Vessels acquisition for the year ended December 31, 2010

On February 18, 2010, the Company entered into a Memorandum of Agreement for the acquisition of the vessel Star Aurora for a contracted purchase price of $42,500. The vessel was delivered to the Company on September 8, 2010. The Company also capitalized an amount of $1,400 to vessel cost for the early delivery of the vessel, as per the Memorandum of Agreement terms, plus an amount of $139 as other capitalized expenses.

Vessel disposed during the year ended December 31, 2008

On April 24, 2008, the Company entered into an agreement to sell the Star Iota, a vessel from initial fleet for gross proceeds of $18,350 less costs to sell of $1,771.  The Company delivered this vessel to its purchasers on October 6, 2008. Star Iota was classified as vessel held for sale during the first quarter of 2008 resulting in $3,646 of impairment loss to record vessel at a lower of its carrying amount or fair value less cost to sell and is included under "Vessel impairment loss"  in the accompanying consolidated statements of operations for the year ended December 31, 2008.

F-27

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

6.      Vessels and other fixed assets-(continued):

Vessel disposed during the year ended December 31, 2009

On July 21, 2009, the Company entered into a Memorandum of Agreement to sell the Star Alpha, a vessel from the initial fleet, to a third party for a contracted sales price of $19,850 less costs to sell of $721.  The vessel was delivered to its new owners on December 21, 2009.  Star Alpha was classified as asset held for sale during the third quarter of 2009 and recorded at the lower of its carrying amount or fair value less costs to sell.  The resulting impairment loss of $75,208 is included under "Vessel impairment loss" in the accompanying consolidated statements of operations for the year ended December 31, 2009.

Vessel disposed during the year ended December 31, 2010

On January 18, 2010, the Company entered into a Memorandum of Agreement for the sale of Star Beta to a third party for a contracted sales price of $22,000. The vessel Star Beta was classified as asset held for sale during the first quarter of 2010 and was recorded at the lower of its carrying amount or fair value less cost to sell.  The resulting impairment loss of $34,947 for the year ended December 31, 2010, is included under "Vessel impairment loss" in the accompanying consolidated statements of operations. The vessel was delivered to its new owners on July 7, 2010.

F-28

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

7.   Fair value of acquired time charters:

The fair value of the time charters acquired at below/above fair market charter rates on the acquisition of the vessels is summarized below.  These amounts are amortized on a straight-line basis to the end of each charter period.

Vessel			Fair value of acquired time charter			Amortization 2008		Balance December 31, 2008		Amortization 2009		Balance December 31, 2009		Amortization 2010		Balance December 31, 2010
Fair value of below market acquired time charter
Star Epsilon		$		14,375	$	12,469	$	1,017	$	1,017	$	-	$	-	$	-
Star Theta				12,397		8,745		3,076		3,076		-		-		-
Star Alpha				46,966		34,462		12,504		12,504		-		-		-
Star Delta				13,815		12,011		1,804		1,804		-		-		-
Star Gamma				11,649		11,649		-		-		-		-		-
Star Zeta				2,735		2,735		-		-		-		-		-
Star Cosmo				3,856		683		3,173		1,361		1,812		1,360		452
Total		$		105,793	$	82,754	$	21,574	$	19,762	$	1,812	$	1,360	$	452
Fair value of above market acquired time charter
Star Kappa			1,980			746		1,206		1,206		-		-		-
Star Ypsilon			14,417			1,475		12,942		12,942		-		-		-
Total	$		16,397		$	2,221	$	14,148	$	14,148	$	-	$	-	$	-

As a result of downturn in the shipping industry during the fourth quarter of 2008 the Company revised its original assumptions of the latest available redelivery dates used in determining the term of its below and above market acquired time charter agreements. Under the provision of guidance related to Accounting Changes and Error Corrections this revision was treated as a change in accounting estimate and was accounted for prospectively beginning October 1, 2008.  The unamortized balance of below market acquired time charter agreements was amortized on an accelerated basis assuming the earliest redelivery dates of vessels under existing time charter agreements. This change had a positive impact on revenue of $13,018 ($0.25 and $0.24 per basic and diluted share) for the year ended December 31, 2008.

F-29

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

7.       Fair value of acquired time charters-(continued):

Gain/Loss on time charter agreement termination

For the year ended December 31, 2008

The vessel Star Sigma, which was on time charter to a charterer at a gross daily charter rate of $100,000 per day from April 2008 until March 2009, was redelivered to us earlier pursuant to an agreement whereby the charterer agreed to pay the contracted rate less $8,000 per day, which is the approximate operating cost for the vessel, from the date of the actual redelivery in November 2008 through March 1, 2009.  The total amount received (net of commissions) for the year ended December 31, 2008 was $9,711.

For the year ended December 31, 2009

The vessel Star Alpha, which was on time charter at a gross daily charter rate of $47,500 per day for the period from January 9, 2008 until March 18, 2009, was redelivered on January 16, 2009 to the Company by its charterers approximately two months prior to the earliest redelivery date per the time charter agreement. The Company, under the accounting provisions applicable to intangible assets, has recognized a gain on a time charter agreement termination of $10,077, which relates to the write-off of the unamortized fair value of below market acquired time charter on a vessel redelivery date.

The vessel Star Theta was also redelivered to the Company by its charterers on March 15, 2009, approximately twenty-nine days prior to the earliest redelivery date per the time charter agreement.  The Company has recognized a gain on time charter agreement termination amounting to $842 which relates to the write-off of the unamortized fair value of below market acquired time charter on a vessel redelivery date. In addition, the Company received $260 from its charterers relating to the early termination of this charter party, which was also recorded as a gain on time charter termination.

The vessel Star Kappa, which was on time charter at an average gross daily charter rate of $25,500 per day for the period from April 12, 2009 until July 12, 2014, was redelivered on October 23, 2009 to the Company by its charterers prior to the earliest redelivery date per the time charter agreement. The Company has recognized a loss on time charter agreement termination of $903, which relates to the write-off of the unamortized fair value of above-market acquired time charter on a vessel redelivery date.

F-30

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

7.       Fair value of acquired time charters-(continued):

The vessel Star Ypsilon, which was on time charter at an average gross daily charter rate of $91,932 per day for the period from September 18, 2008 until July 4, 2011, was redelivered on July 17, 2009 to the Company by its charterers prior to the earliest redelivery date per the time charter agreement. The Company has recognized the loss on time charter agreement termination of $10,137, which relates to the unamortized fair value of above-market acquired time charter on a vessel redelivery date. In addition, the Company recognized a gain amounting to $5,040, which represents the deferred revenue from the terminated time charter contract.

All amounts presented above are included under "Gain on time charter agreement termination" or "Loss on time charter agreement termination" in the accompanying consolidated statements of operations for years ended December 31, 2008 and 2009.

Amortization expenses related to the vessel Star Cosmo for the year ending December 31, 2011 will be $452.

F-31

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.      Long-term Debt:

a) On December 27, 2007 the Company entered into a loan agreement with Commerzbank AG in the amount of up to $120,000 in order to partially finance the acquisition cost of the second hand vessels, Star Gamma, Star Delta, Star Epsilon, Star Zeta, and Star Theta, which also provide the security for this loan agreement.  Under the terms of this loan facility, the repayment of $120,000 is over a nine year term and divided into two tranches. The first of up to $50,000 is repayable in twenty-eight consecutive quarterly installments commencing twenty-seven months after the initial borrowings but no later than March 31, 2010: (i) the first four installments amount to $2,250 each, (ii) the next thirteen installments amount to $1,000 each (iii) the remaining eleven installments amount to $1,300 each and a final balloon payment of $13,700 is payable together with the last installment. The second tranche of up to $70,000 is repayable in twenty-eight consecutive quarterly installments commencing twenty-seven months after draw down but no later than March 31, 2010: (i) the first four installments amount to $4,000 each (ii) the remaining twenty-four installments amount to $1,750 each and a final balloon payment of $12,000 is payable together with the last installment. The loan bears interest at LIBOR plus a margin at a minimum of 0.8% per annum "p.a." to a maximum of 1.25% p.a. depending on whether the aggregate drawdown ranges from 60% up to 75% of the aggregate market value of the 'initial fleet'.

The loan contains financial covenants, including requirements to maintain (i) a minimum liquidity of $10,000 or $1,000 per vessel, whichever is greater (ii) the market value adjusted equity ratio shall not be less than 25%, as defined therein and (iii) an aggregate market value of the vessels pledged as security under this loan agreement not less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

On June 10, 2009, the Company entered into a supplemental agreement with Commerzbank. Under the terms of this agreement during the waiver period from December 31, 2008 to January 31, 2010, the security cover requirement was reduced to 111%. As further security for this facility, the Company shall provide a first preferred mortgage on the vessel Star Alpha and shall pledge an amount of $6,000 to the lenders. Furthermore, the interest spread was increased to 2.00% p.a. for the duration of the waiver period. More than if the asset cover percentage is less than 60%, between 60% to 70%, between 70% to 75% and more than 75%, the interest spread should be 0.8%, 0.9%, 1% and 1.25% respectively. In addition, during the waiver period, payments of dividend, share repurchases and investments are subject to the prior written consent of the lenders.

F-32

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.      Long-term Debt-(continued):

On December 24, 2009, the Company entered into a second supplemental agreement with Commerzbank. Under the terms of this agreement during the waiver period from February 1, 2010 to June 30, 2010 and from July 1, 2010 to January 31, 2011 the security cover shall be at least 111% and 118%, respectively whether at all times thereafter 135%. Furthermore, the bank consented to: i) the sale of Star Alpha, ii) the payment of dividends not exceeding $0.05 per share in each quarter iii) the reduction of minimum liquidity from $1,000 to $650 per fleet vessel, iv) the increase of the pledged deposit by $1,250 from $6,000 to $7,250 plus a minimum liquidity of $7,150.  The interest spread was also maintained to 2.00% p.a. for the duration of the waiver period. Based on the same agreement after the waver period the minimum liquidity will be increased from $650 to $1,000 per fleet vessel.

As of December 31, 2009 and 2010 the Company had outstanding borrowings of $120,000 and $95,000, respectively.

b) On April 14, 2008, the Company entered into a loan agreement with Piraeus Bank A.E., acting as an agent, which was subsequently amended on April 17, 2008 and September 18, 2008.  Under the amended terms, the agreement provides for a term loan of $150,000 to partially finance the acquisition of the Star Omicron, the Star Sigma and Star Ypsilon.  This loan agreement is secured by the vessels Star Omicron, the Star Beta, and the Star Sigma. Under the terms of this term loan facility, the repayment of $150,000 is over six years and begins three months after the Company's first draw down amount and is divided into twenty-four consecutive quarterly installments: (i) the first installment amounts to $7,000, (ii) the second through fifth installments amount to $10,500 each, (iii) the sixth to eighth installments amount to $8,800 each, (iv) the ninth through fourteenth installments amount to $4,400 each, (v) the fifteenth through twenty-fourth installments amount to $2,700 each, and a final balloon payment in the amount of $21,200 is payable together with the last installment.  The loan bears interest at LIBOR plus a margin of 1.3% p.a. This loan agreement with Piraeus Bank A.E. contain financial covenants, including requirements to maintain (i) a minimum liquidity of $500 per vessel, (ii) the total indebtedness of the borrower over the market value of all vessels owned shall not be greater than 0.6:1, (iii) the interest coverage ratio shall not be less than 2:1 and (iv) an aggregate market value of the vessels pledged as security under this loan agreement should not be less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

F-33

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.      Long-term Debt-(continued):

On May 9, 2009, the Company entered into a supplemental agreement with Piraeus Bank. Under the terms of this agreement during the waiver period from December 31, 2008 to February 28, 2010, the required security cover covenant of 125% shall be waived. After the end of the waiver period, for the period from March 1, 2010 to February 28, 2011 the required security cover shall be reduced to 110% from 125% of the outstanding loan amount. The lenders shall waive the 60% corporate leverage ratio, which is the ratio of the Company's total indebtedness net of any unencumbered cash balances over the market value of all vessels owned by the Company, through February 28, 2010. As further security for this facility, the Company shall provide (i) first priority mortgages on and first priority assignments of all earnings and insurances of the vessels Star Kappa and Star Ypsilon; (ii) corporate guarantees from each of the collateral vessel owning limited liability companies; (iii) a subordination of the technical and commercial manager's rights to payment; (iv) and a pledge amount of $9,000 to the lenders. Furthermore, the interest spread was increased to 2% p.a. applicable for the period from January 1, 2009 to December 31, 2010, and thereafter shall be adjusted to 1.5% per annum until the margin review date of the facility. In addition, during the waiver period, payments of dividend are subject to the prior written consent of the lenders. In July 2010 Piraeus Bank consented to the sale of vessel Star Beta. Consequently the first priority mortgage was released. In addition the Company prepaid of an amount of $6,975 in July 2010 and the facility was repayable beginning on September 1, 2010, in seventeen consecutive quarterly installments: (i) the first one installment in the amount of $8,064 (ii) the second to seventh installments amount to $4,032 each and (ii) the final ten installments in the amount of $2,474 each plus a balloon payment of $19,427 is payable together with the last installment.

As of December 31, 2009, and 2010 the Company had outstanding borrowings of $101,000 and $64,329, respectively.

c) On July 1, 2008, the Company entered into a loan agreement with Piraeus Bank A.E., acting as an agent, in the amount of $35,000 to partially finance the acquisition of the Star Cosmo, which also provides the security for this loan agreement. The full amount of the loan was drawn down, on the same date. Under the terms of this term loan facility, the repayment of $35,000 is over six years and begins three months after the Company drew down the full amount but no later than July 30, 2008 and is divided into twenty-four consecutive quarterly installments: (i) the first through fourth installments amounts to $1,500 each, (ii) the fifth through eighth installments amount to $1,250 each, (iii) the ninth to twelfth installments amount to $875 each, (iv) the

F-34

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.       Long-term Debt-(continued):

thirteenth through twenty-fourth installments amount to $500 each and a final balloon payment of $14,500 is payable together with the last installment. The loan bears interest at LIBOR plus a margin of 1.325% p.a.

The loan agreement contains financial covenants, including requirements to maintain (i) a minimum liquidity of $500 per vessel, (ii) the total indebtedness of the borrower over the market value of all vessels owned shall not be greater than 0.6:1, (iii) the interest coverage ratio shall not be less than 2:1 and (iv) an aggregate market value of the vessels pledged as security under this loan agreement not less than (a) 125% of the then outstanding borrowings for the first three years and (b) 135% of the then outstanding borrowings thereafter.

On May 25, 2009, the Company entered into an amending and restating agreement with Piraeus Bank. Under the terms of this agreement during the waiver period from December 31, 2008 to February 28, 2010, the required security cover covenant of 125% shall be waived. After the end of the waiver period, for the period from February 28, 2010 to February 28, 2011 the required security cover shall be reduced to 110% from 125% of the outstanding loan amount. The lender shall waive the 60% corporate leverage ratio, which is the ratio of the Company's total indebtedness net of any unencumbered cash balances over the market value of all vessels owned by the Company, through February 28, 2010. Also, during the waiver period, no dividend payments are made without the prior written consent of the lenders.

As further security for this facility the Company will provide (i) second priority mortgage on and second priority assignment of all earnings and insurances of the Star Alpha; (ii) a corporate guarantee from Star Alpha's vessel owning limited liability company; (iii) a subordination of the technical and commercial managers rights to payment and iv) a minimum liquidity of $500 per vessel and v) a pledged deposit of $5,000. This facility was repayable beginning on April 2, 2009, in twenty-two consecutive quarterly installments: (i) the first two installments in the amount of $2,000 each; (ii) the third installment in the amount of $1,750; (iii) the fourth installment in the amount of $1,250; (iv) the fifth through tenth installment in the amount of $875 each; and (v) the final twelve installments in the amount of $500 each plus a balloon payment of $13,750 is payable together with the last installment.  In addition, the interest spread was adjusted to 2% p.a. applicable for the period from March 1, 2009 to February 28, 2010, and thereafter shall be adjusted to 1.5% p.a. until the final maturity date of the facility. In December 2009 Piraeus Bank consented to the sale of vessel Star Alpha. Consequently the second priority mortgage was released.

F-35

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.      Long-term Debt-(continued):

On September 29, 2010 the loan was further amended.  Under the terms of this agreement the security cover shall be at all times 125%. Furthermore, the bank released to the Company an amount of $5,000 that was previously pledged, after the Company prepaid of an amount of $2,000 on October 1, 2010. In addition the facility was repayable beginning on October 1, 2010, in sixteen consecutive quarterly installments: (i) the first four installments in the amount of $800 each; and (ii) the final twelve installments in the amount of $457 each plus a balloon payment of $12,566 is payable together with the last installment.   In addition, the interest spread was adjusted to 3% p.a. applicable for the period from August 1, 2010 to December 31, 2011, and thereafter shall be adjusted to 2.5% p.a. until the final maturity date of the facility.

As of December 31, 2009 and 2010, the Company had outstanding borrowings of $26,250 and $20,450, respectively.

d) On September 3, 2010 the Company entered into a loan agreement with Commerzbank AG in the amount of up to $26,000 in order to partially finance the acquisition cost of the second hand vessel, Star Aurora, which is also provided as security for this loan agreement.  Under the terms of this loan facility, the repayment of $26,000 is over a six year period. The loan is repayable in twenty-four consecutive quarterly installments of  $950 each, commencing three months after the drawdown, and a final balloon payment of $3,200 payable together with the last installment. The loan bears interest at LIBOR plus a margin of 2.6% p.a.

The loan contains financial covenants, including requirements to maintain (i) a minimum liquidity of $10,000 or $1,000 per vessel, whichever is greater (ii) the market value adjusted equity ratio shall not be less than 25%, as defined therein and (iii) a minimum liquidity of $650 for this vessel that will increase to $1,000 when cash pledged due to waiver dated December 24, 2009 shall be released (iii) an aggregate market value of the vessel pledged as security under this loan agreement not less than 135% at all times.

As of December 31, 2010, the Company had outstanding borrowings of $25,050.

F-36

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.       Long-term Debt-(continued):

e) In December 2010, the Company committed into a loan agreement with Credit Agricole Corporate and Investment Bank for a term loan up to $70,000 to partially finance the construction cost of the Hull PN-063 and Hull PN-064, which have been provided as security for this loan agreement.  The loan will be drawn in three advances per hull, and each advance will be drawn upon completion of the keel laying the launching and the delivery of each hull. Under the terms of this term loan facility, the repayment of $70,000 is over seven years and begins three months after the delivery of each vessel and is divided into twenty eight consecutive quarterly installments, per vessel, amounting to $513 each and a final balloon payment, per vessel, in the amount of $20,650 is payable together with the last installment.  The loan bears interest at LIBOR plus a margin of 2.7% p.a.

This loan agreement with Credit Agricole Corporate and Investment Bank contain financial covenants, including requirements to maintain (i) a minimum liquidity of $10,000 or $500 per fleet vessel, whichever is greater (ii) the total indebtedness of the borrower over the market value of all vessels owned shall not be greater than 0.7:1, (iii) the minimum asset cover ratio shall not be less than (a) 120% during the first two years from delivery of each vessel and (b) 125% of the then outstanding borrowings thereafter.

As of December 31, 2010, the Company had no outstanding borrowings related to this loan.

The weighted average interest rate (including the margin) as of December 31, 2008, 2009 and 2010 was 3.63%, 2.65% and 2.73%, respectively.

The Company was not in breach of any financial covenants as of December 31, 2010.

F-37

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

8.      Long-term Debt-(continued):

The principal payments required to be made after December 31, 2010, are as follows:

Years	Amount
2011	$	33,785
2012		28,083
2013		26,525
2014		56,486
2015		16,000
2016 and thereafter		43,950
Total	$	204,829

Interest expense for the years ended December 31, 2008, 2009 and 2010 amounting to $9,655, $9,217, and $5,317 respectively, amortization of deferred finance fees amounting to $234, $350 and $329, respectively, and other finance fees amounting to $349, $347 and $270, respectively, are included under "Interest and finance costs" in the accompanying consolidated statements of operations.

9.      Preferred, Common stock and Additional paid in capital:

As of December 31, 2008 and 2009 the Company had common stock and warrants outstanding, whereas as of December 31, 2010 the Company had only common stock outstanding.

Preferred Stock:Star Bulk is authorized to issue up to 25,000,000 shares of preferred stock, $0.01 par value with such designations, as voting, and other rights and preferences, as  determined by the Board of Directors. As of December 31, 2009 and 2010 the Company had not issued any preferred stock.

Common Stock: Star Bulk was authorized to issue 100,000,000 shares of common stock, par value $0.01. On November 23, 2009 at the Company's annual meeting of shareholders, the Company's shareholders voted to approve an amendment to the Amended and Restated Articles of Incorporation increasing the number of common shares that the Company was authorized to issue from 100,000,000 registered common shares, par value $0.01 per share, to 300,000,000 registered common shares, par value $0.01 per share.

F-38

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated

9.      Preferred, Common stock and Additional paid in capital-(continued):

Each outstanding share of Star Bulk common stock entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by Star Bulk's board of directors out of funds legally available for dividends. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of Star Bulk's securities. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any shares of preferred stock which Star Bulk may issue in the future.

On July 17, 2008 the Company issued 803,481 shares out of additional stock consideration of 1,606,962 of common stock of Star Bulk to TMT. The remaining 803,481 shares of Star Bulk's common stock were issued to TMT on April 28, 2009 (Note 1).  The additional stock consideration of 1,606,962 common shares (Note 1) was determined to be $18,946 and was measured based on the Company's share price on March 7, 2008 when performance by TMT was complete upon delivery of the last initial vessel, Star Iota (Note 6).

Warrants:

Each warrant entitles the registered holder to purchase one share of common stock at a price of $8.00 per share, subject to adjustment as discussed below. The warrants were to expire on December 16, 2009.  In November 2009, the Company decided to extend the expiration date of its 5,916,150 outstanding warrants up to March 15, 2010.  On March 15, 2010, the 5,916,150 outstanding warrants expired and ceased trading on the Nasdaq Global Market.

F-39

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

9.      Preferred, Common stock and Additional paid in capital-(continued):

Warrant holders exercised their right to purchase shares of the Company's common stock. During the year ended December 31, 2008, the Company received a total of $94,155 representing 11,769,486 warrants respectively, at $8.00 per warrant exercised.  Following the exercise of 11,769,486 warrants in 2008 5,916,150 warrants remained outstanding as of December 31, 2008. During the year ended December 31, 2009 and 2010 no warrants were exercised.

Share and Warrant re-purchase plan:  Following the consummation of the Redomiciliation Merger, in 2008 the Company announced a repurchase plan of common shares and warrants of up to an aggregate value of $50,000.  As at December 31, 2008, 1,247,000 of common shares and  1,362,500 of warrants were repurchased.  The Company paid $7,976 for the shares and $5,473 for the above mentioned warrants. Under the terms of the waiver agreements (Note 8) with the Company's lenders, any share and warrant repurchases are subject to their prior written consent.

On February 23, 2010 the Company's Board of Directors adopted a new stock repurchase plan for up to $30,000 to be used for repurchasing the Company's common shares until December 31, 2011. All repurchased shares will be cancelled and removed from the Company's share capital. This stock repurchase plan is expected to be effective when Company's lenders remove the relevant covenant from the Company's loan agreements.

During the years ended December 31, 2009 and 2010 there were no warrants or shares repurchased.

F-40

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

9.      Preferred, Common stock and Additional paid in capital-(continued):

Declaration of dividends:. On November 17, 2008, the Company declared a cash dividend ($0.18 per share), amounting to $9,800, and stock dividends (4,255,002 shares issued) on Star Bulk's common stock totaling $0.36 equivalent per common share for the quarter ended September 30, 2008.  This cash dividend was paid and shares were issued on December 5, 2008 to stockholders of record on November 28, 2008.  The number of newly issued shares was based on the volume weighted average price of Star Bulk's shares on the Nasdaq Global Market during the five trading days before the ex-dividend date or November 25, 2008. The stock dividend issue of 4,255,002 shares was valued at $7,659, fair value based on the date shares were issued, on December 5, 2008. This equity value was deducted from the retained earnings and included in the additional paid in capital and common stock as indicated in the Consolidated Statements of Shareholders Equity. On January 20, 2009, management and the directors reinvested the cash portion of their dividend for the quarter ended September 30, 2008, declared on November 17, 2008, and amounting to $1,886, into 818,877 newly-issued shares in a private placement.

The Company received written consent from each of its lenders for the declaration and payment of these four dividends.

F-41

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

10. Earnings/Losses per Share:

The Company calculates basic and diluted earnings/loss per share as follows:

	Year ended		Year ended			Year ended
	December 31,		December 31,			December 31,
	2008		2009			2010
Income/Loss:
Net income / (loss)	$	133,738	$	(58,415	)	$	(5,131	)
Basic earnings / (loss) per share:
Weighted average common shares outstanding, basic		52,477,947	$	60,873,421			61,489,162
Basic earnings / (loss) per share	$	2.55		(0.96	)	$	(0.08	)
Effect of dilutive securities:
Dillutive effect of Warrants and non-vested shares		1,970,038		-			-
Weighted average common shares outstanding, diluted		54,447,985		60,873,421			61,489,162
Diluted earnings / (loss) per share	$	2.46	$	(0.96	)	$	(0.08	)

During the year ended December 31, 2008 11,769,486 (Note 9) warrants were exercised.  As of December 31, 2008 and 2009, a total of 5,916,150 warrants were outstanding, respectively for both years, at an exercise price of $8 per warrant.  The exercise price of warrants was below the average market price of the Company's shares during the year ended December 31, 2008.  Consequently, the Company's warrants were dilutive and included in the computation of the diluted weighted average common shares outstanding based on the treasury stock method.   The weighted average diluted common shares outstanding for the year ended December 31, 2008 includes the effect of 1,255,000 of non-vested shares, as their effect was dilutive.  The weighted average diluted common shares outstanding for the years ended December 31, 2009 and 2010 are not included in the diluted earnings per share calculation because their effect would be anti-dilutive(Note 11) .

F-42

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

11.     Equity Incentive Plan:

On February 8, 2007 the Company's Board of Directors adopted a resolution approving the terms and provisions of the Company's Equity Incentive Plan (2007 Plan).  The Plan is designed to provide certain key persons, whose initiative and efforts are deemed to be important to the successful conduct of the business of the Company with incentives to enter into and remain in the service of the Company, acquire a propriety interest in the success of the Company, maximize their performance and enhance the long-term performance of the Company. 

Under the 2007 Plan, officers, key employees, directors and consultants of Star Bulk and its subsidiaries will be eligible to receive options to acquire shares of common stock, stock appreciation rights, restricted stock and other stock-based or stock-denominated awards. Star Bulk has reserved a total of 2,000,000 shares of common stock for issuance under the plan, subject to adjustment for changes in capitalization as provided in the 2007 Plan.

On February 23, 2010, the Company's Board of Directors approved the Company's new Equity Incentive Plan (the 2010 Plan).    The Company has reserved a total of 2,000,000 shares of common stock for issuance under the 2010 plan, subject to adjustment for changes in capitalization as provided in the 2010 Plan. All provisions of the 2010 Plan are similar with the 2007 Plan provisions.

Pursuant to Company's 2010 and 2007 Equity Incentive Plans, the Company issued the following securities:

i) On December 3, 2007, the Company granted to Mr. Tsirigakis, Chief Executive Officer, and Mr. Syllantavos, Chief Financial Officer, 90,000 and 75,000 non-vested shares of Star Bulk common stock, respectively.  The fair value of each share was $15.34, which is equal to the market value of the Company's common stock on the grant date. The shares vest in three equal installments on July 1, 2008, 2009 and 2010. All 165,000 shares granted under this Plan were issued during 2008.

ii) On March 31, 2008, the Company concluded an agreement with Company's Director Mr. P. Espig.  Under this agreement, which is part of Company's Equity incentive plan, Mr. Espig received 150,000 non-vested shares of Star Bulk common stock. The fair value of each share was $11.39 which is equal to the market value of the Company's common stock on the grant date. The shares vested in two equal installments on April 1, 2008 and 2009. All 150,000 shares granted under this Plan were issued during 2008.

F-43

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

11.    Equity Incentive Plan-(continued):

iii) On December 5, 2008, pursuant to the terms of 2007 Plan the Company authorized the issuance of an aggregate of 130,000 non-vested common shares to all of our employees and an aggregate of 940,000 non-vested common shares to the members of board of directors.  The fair value of each share was $1.80 which is equal to the market value of the Company's common stock on the grant date.  These shares were issued on January 20, 2009 and vested on January 31, 2009.

iv) On February 4, 2010, an aggregate of 115,600 non-vested common shares to all Company's employees subject to applicable vesting of 69,360 common shares on June 30, 2010 and 46,240 common shares on June 30, 2011. The fair value of each share was $2.66 which is equal to the market value of the Company's common stock on the grant date. 

v) On February 24, 2010, an aggregate of 980,000 non-vested common shares to the members of Company's Board of Directors subject to applicable vesting of 490,000 common shares on each of June 30 and September 30, 2010. The fair value of each share was $2.75 which is equal to the market value of the Company's common stock on the grant date. 

vi) On October 20, 2010, pursuant to the terms of 2010 Plan the Company authorized the issuance of an aggregate of 140,000 non-vested common shares to all of the Company's employees and an aggregate of 1,070,000 non-vested common shares to the members of board of directors.  The fair value of each share was $2.80 which is equal to the market value of the Company's common stock on the grant date.  These shares vested on December 31, 2010.

All non-vested shares are conditional upon the grantee's continued service as an employee of the Company, or as a director until the applicable vesting date.  The grantee does not have the right to vote such non-vested shares until they vest or exercise any right as a shareholder of these shares, however, the non-vested shares pay dividends as declared. For the years ended December 31, 2008, 2009, and 2010 the Company paid dividends on non-vested shares which amounted to $206, $6 and $89, respectively.

The Company estimates the forfeitures of non-vested shares to be immaterial.

F-44

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

11.    Equity Incentive Plan-(continued):

For the years ended December 31, 2008, 2009 and 2010, stock based compensation was $3,986, $1,832 and $6,511 respectively and is included under "General and administrative expenses" in the accompanying consolidated statement of operations.

A summary of the status of the Company's non-vested shares as of December 31, 2010, and movement during the year ended December 31, 2010, is presented below.

	Number of shares			Weighted Average Grant Date Fair Value
Unvested as at January 1, 2010		55,000		$	15.34
Granted		2,305,600			2.77
Vested		(2,314,360	)		3.07
Unvested as at December  31, 2010		46,240		$	2.66

As of December 31, 2010, there was $43 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 0.5 years. The total fair value of shares vested during the years ended December 31, 2008, 2009 and 2010 was $1,484, $2,732 and $6,113, respectively.

F-45

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

12. Accrued liabilities

The amounts shown in the accompanying consolidated balance sheets are analysed as follows:

	2009		2010
Audit fees	$	321	$	220
Legal fees		127		163
Other professional fees		187		88
Operating and voyage expenses		1,324		638
General and administrative expenses		8		6
Loan interest and financing fees		326		750
Totals:	$	2,293	$	1,865

13.    Income Taxes:

a) Taxation on Marshall Islands registered companies

Under the laws of the countries of the companies' incorporation and/or vessels' registration, the companies are not subject to tax on international shipping income. However, they are subject to registration and tonnage taxes, which have been included under "Vessel operating expenses" in the accompanying statements of operations.

b) Taxation on US source income – shipping income

The Company believes that it and its subsidiaries are exempt from U.S. federal income tax at 4% on U.S. source shipping income, as each vessel-operating subsidiary is organized in a foreign country that grants an equivalent exemption to corporations organized in the United States and the Company's stock is primarily and regularly traded on an established securities market in the United States, as defined by the Internal Revenue Code (IRS) of the United States.  Under IRS regulations, a Company's stock will be considered to be regularly traded on an established securities market if (i) one or more classes of its stock representing 50% or more of its outstanding shares, by voting power and value, is listed on the market and is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year; and (ii) the aggregate number of shares of stock traded during the taxable year is at least 10% of the average number of shares of the stock outstanding during the taxable year.

.

F-46

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

14.    Commitments and Contingencies:

Legal proceedings

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels.

i) The Company commenced an arbitration proceeding as claimant against Oldendorff Gmbh & Co. KG of Germany ("Oldendorff"), seeking damages resulting from Oldendorff's repudiation of a charter party relating to the vessel Star Beta. The vessel Star Beta had been time chartered by a subsidiary of the Company to Industrial Carriers Inc. of Marshall Islands ("ICI"). Under that time charter, ICI was obligated to pay a gross daily charter hire rate of $106,500 until February 2010. In January 2008, ICI sub-chartered the vessel to Oldendorff for one year at a gross daily charter hire rate of $130,000 until February 2009. In October 2008, ICI assigned its rights and obligations under the sub-charter to one of our subsidiaries in exchange for ICI being released from the remaining term of the ICI charter. According to press reports, ICI subsequently filed an application for protection from its creditors in a Greek insolvency proceeding which was dismissed.

In January 2009, the Company made a written submission to its appointed arbitrator asserting claims against Oldendorff and alleged damages in the amount of approximately $14,709. The Company believes that the assignment was valid and that Oldendorff has erroneously repudiated the sub-charterer. The arbitration proceedings are still continuing.

F-47

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

14.    Commitments and Contingencies-(continued):

ii) Arbitration proceedings have commenced pursuant to disputes that have arisen with the charterers of the vessel Star Alpha.  The disputes relate to vessel performance characteristics and hire. Star Bulk is seeking damages for repudiations of the charter party due to early redelivery of the vessel as well as unpaid hire of $ 2,096, while the charterers are seeking contingent damages resulting from the vessel's off-hire. Claim, counterclaim and defense submissions have been filed by parties with the arbitration panel. Arbitration proceedings, before a common panel, are also running between third parties that sub-chartered the vessel. In the first quarter of 2009 the vessel underwent unscheduled repairs which resulted in a 25 day off-hire period. Following the completion of the repairs, the vessel Star Alpha was redelivered to the Company by its charterers approximately one month prior to the earliest redelivery date allowed under the time charter agreement.  There is an agreement in principle that the arbitration proceedings with the charterer of the vessel and the sub-charterers will be discontinued and each party will be released from the proceedings and claims will be waived. An amount of $2,096 under "Loss on bad debts" in the accompanying condensed consolidated statements of operations is associated with a write-off of this Charterer's balance.

iii) Arbitration proceedings against TMT seeking damages resulting from TMT's repudiation of the charter party of the vessel Star Ypsilon due to the nonpayment of charterhire of $ 2,606 related to this vessel were terminated during 2010.  During the months June and July 2010 the Company received the amount of $2,082 million for unpaid charter hire, bunkers and interest. A final settlement was reached during October 2010 in which the Company received the amount of $22,222, which is included under "Other operating income" in the accompanying consolidated statements of operations, as settlement for the unrealized revenues due to the early termination of the time charter of the vessel that occurred in July 2009.

iv) The Company commenced arbitration proceedings against Ishhar Overseas that was the previous charterer of the vessels Star Epsilon and Star Kappa. The Company is seeking damages for repudiations of the charter parties due to early redelivery of the vessel as well as unpaid hire of $ 1,949.  The Company will pursue an interim award for such nonpayment of charterhire and an award for the loss of charterhire for the remaining period of the charterparties. Claim submissions have been filed and the arbitration proceedings are continuing.

F-48

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

14.      Commitments and Contingencies-(continued):

v) During July 2010 a dispute arose between the Company and Deuilemar that was the charterer of the vessel Star Beta, for due hire and damages for the late redelivery of the vessel amounting to $1,732 which is included under "Trade Accounts Receivable" in accompanying consolidated balance sheets, while the charterers have a counterclaim for the vessel's performance. Arbitration proceedings are to commence.

On September 29, 2010 the Company agreed with a third party to sell a 45% interest in the future proceeds related to the settlement of certain of the commercial claims for $5 million which is included under "Other operating income" in the accompanying consolidated statements of operations. This amount was collected in October 2010.

The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements.  Up to $1 billion of the liabilities associated with the individual vessels' actions, mainly for sea pollution, are covered by the Protection and Indemnity (P&I) Club Insurance.

F-49

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

Future minimum contractual charter revenue

Future minimum contractual charter revenue, based on vessels committed to noncancelable, time charter contracts net of address commission as of December 31, 2010 will be:

Years ending December 31,	Amount*
2011	$	65,471
2012		32,132
2013		25,558
2014		9,034
2015		9,034
2016 and thereafter		52,000
Total	$	193,229

*These amounts do not include any assumed off–hire.

Contractual Obligations

The Company's contractual obligations as of December 2010 amount to $64,128 in aggregate, payable to the shipbuilder Hanjin during the year 2011 in respect to the construction of  PN-063 (tbr Star Borealis) and PN-064 (tbr Star Polaris) (Note 5).

F-50

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

15.     Voyage and Vessel Operating Expenses:

The amounts in the accompanying consolidated statements of operations are analyzed as follows:

	2008		2009		2010
Voyage expenses
Port charges	$	660	$	1,940	$	1,047
Bunkers		571		3,637		1,544
Commissions paid – third parties		1,824		1,460		1,180
Commissions paid – related parties		396		1,472		1,540
Chartered-in vessel expenses		-		6,732		11,180
Miscellaneous		53		133		348
Total voyage expenses	$	3,504	$	15,374	$	16,839
Vessel operating expenses
Crew wages and related costs	$	10,350	$	13,342	$	12,348
Insurances		2,225		2,198		2,195
Maintenance, Repairs, Spares and Stores		6,037		9,671		4,729
Lubricants		2,147		2,456		1,925
Tonnage taxes		120		123		116
Upgrading expenses		4,580		1,526		301
Miscellaneous		739		852		735
Total vessel operating expenses	$	26,198	$	30,168	$	22,349

16.    Fair value disclosures:

The guidance related to Fair Value Measurements requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;

Level 3: Unobservable inputs that are not corroborated by market data.

F-51

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

16.    Fair value disclosures-(continued):

The Company trades in the FFAs and bunker swap markets with an objective to utilize those instruments as economic hedge instruments that are highly effective in reducing the risk on specific vessels trading in the spot market and to take advantage of short term fluctuations in the market prices. FFAs and bunker swap trading do not qualify for cash flow hedges for accounting purposes, therefore resulting gains or losses are recognized under "Gain/loss on derivative instruments" in the accompanying consolidated statements of operations.

Dry bulk shipping FFAs generally have the following characteristics: they cover periods from several days and months to one year; they can be based on time charter rates or freight rates on specific quoted routes; they are executed between two parties.  All Company's FFA's are cleared transactions.

As all of the Company's FFAs are settled on a daily basis through the London Clearing House (LCH), the fair value of these instruments as of December 31, 2009 and 2010 was $0. There is also a margin maintenance requirement based on marking the contract to market.

Bunker swaps are agreements between two parties to exchange cash flows at a fixed price on bunkers, where volume, time period and price are agreed in advance. The Company's swaps are traded as a derivative on the over-the-counter (OTC) market. During 2009 and 2010, the Company entered into several bunker swap contracts up to December 31, 2011. As of December 31, 2010 the Company had no open positions on bunkers swaps.

As of December 31, 2009 and 2010 the cash margin requirement for future trades (of both FFAs and Bunkers swaps) was $5,753 and $0 and is classified as short-term restricted cash in the accompanying consolidated balance sheets.

As of December 31, 2009, fair value of the Company's investments in bunkers swaps contracts are determined through Level 2 of the fair value hierarchy as defined in the related guidance and are derived principally from or corroborated by observable market data and other items that allow value to be determined.

F-52

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

16.  Fair value disclosures-(continued):

For the years ended December 31, 2008, 2009 and 2010 gain/losses recognized on FFA and bunker swap contracts are included under "Gain/ (loss) on derivative instruments" in the accompanying consolidated statements of operations and are analysed as follows:

	Year ended December 31,
	2008		2009			2010
FFAs	$	251	$	(2,436	)	$	(2,078	)
Bunker swaps		-		282			(5	)
	$	251	$	(2,154	)	$	(2,083	)

As of December 31, 2009 no fair value measurements for assets or liabilities under Level 1 and 3 were recognized in the Company's consolidated financial statements.

			Fair Value Measurements Using
Description		Total December 31, 2009	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Bunker swaps	Current	128	-	128	-
	Non-current	154	-	154	-

As of December 31, 2010 no fair value measurements for assets or liabilities under Level 1, 2 and 3 were recognized in the Company's consolidated financial statements.

The carrying value of cash and cash equivalents, trade accounts receivable, accounts payable and current accrued liabilities approximates their fair value due to the short term nature of these financial instruments. The fair values of long-term variable rate bank loans approximate the recorded values, due to their variable interest rate.

F-53

STAR BULK CARRIERS CORP.

Notes to Consolidated Financial Statements

December 31, 2009 and 2010

(Expressed in thousands of United States Dollars - except for share and per share data, unless otherwise stated)

17.    Subsequent Events:

· On January 20, 2011 the Company entered into a loan agreement with Credit Agricole Corporate and Investment Bank in the amount of up to $70,000 in order to partially finance the construction cost of the Hull PN-063 (tbr Star Borealis) and the Hull PN-064 (tbr Star Polaris). The Company was committed into this loan in December 2010 (Note 8e).

· On January 21, 2011 an amount of $10,700 was drawn down in order to partially finance the construction cost of the Hull PN-063 (tbr Star Borealis)

· On February 7, 2011 Mr. Spyros Capralos was appointed as the Company's President and Chief Executive Officer, to succeed Mr. Akis Tsirigakis. Mr. Tsirigakis will continue to serve as a director of the Company

· On February 8, 2011 an amount of $10,660 was drawn down in order to partially finance the construction cost of the Hull PN-064 (tbr Star Polaris).

· On February 18, 2011 the Company received a letter from Korea Line Corporation ("KLC"), the charterer of the vessel Star Gamma requesting an agreement to adjust the charter hire. Additionally, the Company was notified of the commencement of rehabilitation proceedings of KLC in Korea and the related schedule for making claims against KLC in those proceedings. The receivers for KLC terminated the charterparty on March 9, 2011. The charter with KLC had a term that ends in December 2011. As of March 29, 2011 KLC owes the Company an amount of approximately $1.8 million in charterhire. The Company has asserted liens in respect of certain amounts due to KLC under sub-charters relating to the vessel. Letters setting out our claims for due hire and damages have been sent to the Seoul Court handling the rehabilitation proceedings of KLC. The disposition of the claims for the due amounts will be determined by the Korea Court at a future date.

· On February 18, 2011, the Company declared cash dividends on its common stock amounting to $0.05 per share, payable on March 10, 2011.

SK 25767 0002 1183687

F-54

EX-1.1

Exhibit 1.1

FORM OF THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

STAR BULK CARRIERS CORP.

UNDER SECTION 93 OF THE

THE MARSHALL ISLANDS BUSINESS CORPORATIONS ACT

The undersigned, Spyros Capralos, as the Chief Executive Officer and President of Star Bulk Carriers Corp. (the "Corporation"), a corporation incorporated under the laws of the Republic of the Marshall Islands, for the purpose of amending and restating the Second Amended and Restated Articles of Incorporation of said Corporation pursuant to Section 93 of the Business Corporations Act, as amended, hereby certifies that:

1. The name of the Corporation is: Star Bulk Carriers Corp.

2. The Articles of Incorporation were filed with the Registrar of Corporations as of the 13th day of December 2006.

3. The Amended and Restated Articles of Incorporation were filed with the Registrar of the Corporations as of the 8th day of February 2007.

4. The Second Amended and Restated Articles of Incorporation were filed with the Registrar of the Corporations as of the 29th day of December 2009.

5. The Second Amended and Restated Articles of Incorporation are amended and restated in their entirety and are replaced by the Third Amended and Restated Articles of Incorporation attached hereto.

5. These Third Amended and Restated Articles of Incorporation were authorized by actions of the Board of Directors and Shareholders of the Corporation.

IN WITNESS WHEREOF, the undersigned has executed the Second Amended and Restated Articles of Incorporation this ____ day of _____ 2011.

Authorized Person
Name:	Spyros Capralos
Title:	Chief Executive Officer and President

FORM OF THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

STAR BULK CARRIERS CORP.

(the "Corporation")

PURSUANT TO THE MARSHALL ISLANDS BUSINESS CORPORATIONS ACT

A. The name of the Corporation shall be:

STAR BULK CARRIERS CORP.

B. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act (the "BCA").

C. The registered address of the Corporation in the Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.  The name of the Corporation's registered agent at such address is The Trust Company of the Marshall Islands, Inc.  However, the Board of Directors may establish branches, offices or agencies in any place in the world and may appoint legal representatives anywhere in the world.

D. The aggregate number of shares of stock that the Corporation is authorized to issue is three hundred twenty-five million (325,000,000) registered shares of stock, consisting of:

(a) three hundred million (300,000,000) registered common shares with a par value of one cent (US$0.01) per share; and

(b) twenty-five million (25,000,000) registered preferred shares with a par value of one cent (US$0.01) per share.  The Board of Directors shall have the authority to issue all or any of the preferred shares in one or more classes or series with such voting powers, designations, preferences and relative, participating, optional or special rights and qualifications, limitations or restrictions as shall be stated in the resolutions providing for the issue of such class or series of preferred shares.

E. No holder of shares of the Corporation shall, by reason thereof, have any preemptive or other preferential right to acquire, by subscription or otherwise, any unissued or treasury shares of the Corporation, or any other share of any class or series of the Corporation's shares to be issued because of an increase in the authorized capital stock of the Corporation, or any bonds, certificates of indebtedness, debentures or other securities convertible into shares of the Corporation.  However, the Board of Directors may issue or dispose of any such unissued or treasury shares, or any such additional authorized issue of new shares or securities convertible into shares upon such terms as the Board of Directors may, in its discretion, determine, without offering to shareholders then of record, or any class of shareholders, any thereof, on the same terms or any terms.

F. The Corporation shall have every power which a corporation now or hereafter organized under the BCA may have.

G. The name and address of the incorporator is:

Name Majuro Nominees, Ltd. Post Office Address P.O. Box 1405 Majuro, Marshall Islands MH96960

H. Corporate existence commenced on December 13, 2006 and shall continue upon filing these Third Amended and Restated Articles of Incorporation (these "Articles") with the Registrar of Corporations responsible for non-resident corporations.

I. (a) The Board of Directors shall be divided into three classes, as nearly equal in number as the then total number of directors constituting the entire Board of Directors permits, with the term of office of one or another of the three classes expiring each year.  The shareholders of the Corporation shall divide the Board of Directors into three classes, with the term of office of the first class to expire at the 2008 Annual Meeting of Shareholders, the term of office of the second class to expire at the 2009 Annual Meeting of Shareholders and the term of office of the third class to expire at the 2010 Annual Meeting of Shareholders.  Commencing with the 2008 Annual Meeting of Shareholders, the directors elected at an annual meeting of shareholders to succeed those whose terms then expire shall be identified as being directors of the same class as the directors whom they succeed, and each of them shall hold office until the third succeeding annual meeting of shareholders and until such director's successor is elected and has qualified.  Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the provisions of this section (a) of this Article I shall not apply to such holders of preferred stock with respect to the director or directors elected by such holders of preferred stock.

(b)           Any vacancies in the Board of Directors for any reason, and any created directorships resulting from any increase in the number of directors, may be filled by the vote of a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors shall be elected and qualified.  No decrease in the number of directors shall shorten the term of any incumbent director.  Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the then authorized number of directors shall be increased by the number of directors so to be elected, and the terms of the director or directors elected by such holders shall expire at the next succeeding annual meeting of shareholders.

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(c)           Notwithstanding any other provisions of these Articles or the Amended and Restated Bylaws (the "Bylaws") of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, these Articles or the Bylaws of the Corporation), any director or the entire Board of Directors of the Corporation may be removed at any time, but only for cause and by the affirmative vote of the holders of 70% or more of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose.  Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the provisions of this section (c) of this Article I shall apply only to such holders of preferred stock with respect to the director or directors elected by such holders of preferred stock.

Except as otherwise provided by applicable law, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (i) has been found to have been negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by the affirmative vote of at least 80% of the directors then in office, other than the director whose removal is being sought, at any meeting of the Board called for that purpose or (ii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetence directly affects his ability to serve as a director of the Corporation.

No proposal by a shareholder to remove a director shall be voted upon at a meeting of the shareholders unless such shareholder has given timely notice thereof in proper written form to the Secretary. To be timely, a shareholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 120 days nor more than 180 days prior to the one year anniversary of the mailing date of the proxy materials for the immediately preceding annual meeting of shareholders or any such later deadline as may be required in the rules promulgated by the United States Securities and Exchange Commission pursuant to the United States Securities Exchange Act of 1934, as amended, regarding the solicitation of proxies. To be in proper written form, a shareholder's notice must set forth: (a) a statement of the grounds, if any, on which such director is proposed to be removed, (b) evidence reasonably satisfactory to the Secretary, of such shareholder's status as such and of the number of shares of each class of capital stock of the Corporation beneficially owned by such shareholder, and (c) a list of the names and addresses of other shareholders of the Corporation, if any, with whom such shareholder is acting in concert, and the number of shares of each class of capital stock of the Corporation beneficially owned by each such shareholder.

No shareholder proposal to remove a director shall be voted upon at an annual meeting of the shareholders unless proposed in accordance with the procedures set forth in this Article I. If the Chairman of the meeting determines, based on the facts, that a shareholder proposal to remove a director was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that a proposal to remove a director of the Corporation was not made in accordance with the procedures prescribed by these Articles, and such defective proposal shall be disregarded.

3

All of the foregoing provisions of this Article I are subject to the terms of any preferred stock with respect to the directors to be elected solely by the holders of such preferred stock.

(d)           Directors shall be elected by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election.  Cumulative voting, as defined in Division 7, Section 71(2) of the BCA, shall not be used to elect directors.

(e)           Notwithstanding any other provisions of these Articles or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, these Articles or the Bylaws of the Corporation), the affirmative vote of the holders of 70% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter, change or repeal this Article I.

 J. (a) The Board of Directors of the Corporation is expressly authorized to make, alter, amend or repeal Bylaws of the Corporation by the vote of at least 66 2/3% of the directors then in office, and the shareholders may, subject to compliance with the provisions of Article II of the Bylaws concerning the nature of business to be transacted at a meeting of the shareholders, by the vote of the holders of 70% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class), amend, alter, change or repeal any Bylaws adopted by the Board of Directors or make any additional Bylaws or amend or repeal any existing Bylaws.  Notwithstanding any other provisions of these Articles or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, these Articles or the Bylaws of the Corporation), the affirmative vote of the holders of 70% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter, change or repeal this Article J(a).

 J. (b) To the fullest extent permitted by law, the Chairman of the Corporation's Board of Directors shall be entitled, in his or her sole discretion, to cast an additional vote in any situation where the votes of directors (including the first vote of the Chairman and abstentions, if any) are evenly split on a matter, including, without limitation, if such even split results from:

(1) a vote of the entire membership of the Board of Directors;

(2) a vote of the Directors constituting a quorum at a meeting of the Board of Directors, or

(3) a vote of Directors actually voting at a meeting of the Board of Directors.

K. (a) The Corporation may not engage in any Business Combination with any Interested Shareholder for a period of three years following the time of the transaction in which the person became an Interested Shareholder, unless:

4

(1) prior to such time, the Board of Directors of the Corporation approved either the Business Combination or the transaction which resulted in the shareholder becoming an Interested Shareholder;

(2) upon consummation of the transaction which resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the voting stock of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

(3) at or subsequent to such time, the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least 70% of the outstanding voting stock that is not owned by the interested shareholder; or

(4) the shareholder became an Interested Shareholder prior to the consummation of the initial public offering of the Corporation's common stock under the Securities Act.

(b) The restrictions contained in this section shall not apply if:

(1) A shareholder becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the shareholder ceases to be an Interested Shareholder; and (ii) would not, at any time within the three-year period immediately prior to a Business Combination between the Corporation and such shareholder, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or

(2) The Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (i) constitutes one of the transactions described in the following sentence; (ii) is with or by a person who either was not an Interested Shareholder during the previous three years or who became an Interested Shareholder with the approval of the Board; and (iii) is approved or not opposed by a majority of the members of the Board then in office (but not less than one) who were Directors prior to any person becoming an Interested Shareholder during the previous three years or were recommended for election or elected to succeed such Directors by a majority of such Directors. The proposed transactions referred to in the preceding sentence are limited to:

5

(i) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to the BCA, no vote of the shareholders of the Corporation is required);

(ii) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation (other than to any direct or indirect wholly-owned subsidiary or to the Corporation) having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding shares; or

(iii) a proposed tender or exchange offer for 50% or more of the outstanding voting shares of the Corporation.

The Corporation shall give not less than 20 days notice to all Interested Shareholders prior to the consummation of any of the transactions described in clause (i) or (ii) of section (b)(2) of this Article K.

(c) For the purpose of this Article K only, the term:

(1) "Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person.

(2) "Associate," when used to indicate a relationship with any person, means: (i) Any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting shares; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

(3) "Business Combination," when used in reference to the Corporation and any Interested Shareholder of the Corporation, means:

(i) Any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation with (A) the Interested Shareholder or any of its affiliates, or (B) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Shareholder.

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(ii) Any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a shareholder of the Corporation, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding shares;

(iii) Any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any shares, or any share of such subsidiary, to the Interested Shareholder, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares, or shares of any such subsidiary, which securities were outstanding prior to the time that the Interested Shareholder became such; (B) pursuant to a merger with a direct or indirect wholly-owned subsidiary of the Corporation solely for purposes of forming a holding company; (C) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares, or shares of any such subsidiary, which security is distributed, pro rata to all holders of a class or series of shares subsequent to the time the Interested Shareholder became such; (D) pursuant to an exchange offer by the Corporation to purchase shares made on the same terms to all holders of said shares; or (E) any issuance or transfer of shares by the Corporation; provided however, that in no case under items (C)-(E) of this subparagraph shall there be an increase in the Interested Shareholder's proportionate share of the any class or series of shares;

(iv) Any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of any class or series of shares, or securities convertible into any class or series of shares, or shares of any such subsidiary, or securities convertible into such shares, which is owned by the Interested Shareholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares not caused, directly or indirectly, by the Interested Shareholder; or

(v) Any receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a shareholder of the Corporation), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in subparagraphs (i)-(iv) of this paragraph) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.

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Notwithstanding any other provisions of these Articles, the term "Business Combination," when used in reference to the Corporation and any Interested Shareholder of the Corporation, shall not include any transactions for which definitive agreements were entered into prior to the date of the filing of these Articles.

(4) "Control," including the terms "controlling," "controlled by" and "under common control with," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise. A person who is the owner of 20% or more of the outstanding voting shares of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting shares, in good faith and not for the purpose of circumventing this provision, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

(5) "Interested Shareholder" means any person (other than the Corporation and any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 20% or more of the outstanding voting shares of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of 20% or more of the outstanding voting shares of the Corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Shareholder; and the affiliates and associates of such person; provided, however, that the term "Interested Shareholder" shall not include any person whose ownership of shares in excess of the 20% limitation set forth herein is the result of action taken solely by the Corporation; provided that such person shall be an Interested Shareholder if thereafter such person acquires additional shares of voting shares of the Corporation, except as a result of further Company action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Shareholder, the voting shares of the Corporation deemed to be outstanding shall include voting shares deemed to be owned by the person through application of paragraph (8) below, but shall not include any other unissued shares which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(6) "Person" means any individual, corporation, partnership, unincorporated association or other entity.

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(7) "Voting stock" means, with respect to any corporation, shares of any class or series entitled to vote and, with respect to any entity that is not a corporation, any equity interest entitled to vote.

(8) "Owner," including the terms "own" and "owned," when used with respect to any shares, means a person that individually or with or through any of its affiliates or associates:

(i) Beneficially owns such shares, directly or indirectly; or

(ii) Has (A) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of shares tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered shares is accepted for purchase or exchange; or (B) the right to vote such shares pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any shares because of such person's right to vote such shares if the agreement, arrangement or understanding to vote such shares arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or

(iii) Has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (B) of subparagraph (ii) of this paragraph), or disposing of such shares with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such shares.

(d) Any amendment of this Article K shall not be effective until 12 months after the approval of such amendment at a meeting of the shareholders of the Corporation and shall not apply to any Business Combination between the Corporation and any person who became an Interested Shareholder of the Corporation at or prior to the time of such approval.

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(e) Notwithstanding any other provisions of these Articles or the Bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law, these Articles or the Bylaws of the Corporation), the affirmative vote of the holders of 70% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) shall be required to amend, alter, change or repeal this Article K.

L. No director shall be personally liable to the Corporation or any of its shareholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the BCA as the same exists or may hereafter be amended. If the BCA is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the BCA, as so amended. Any repeal or modification of this Section L shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

M. The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors.  The Corporation shall pay the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.

The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article M to directors and officers of the Corporation.

The rights to indemnification and to the advance of expenses conferred in this Article M shall not be exclusive of any other right which any person may have or hereafter acquire under these Articles, the Bylaws of the Corporation, any statute, agreement, vote of shareholders or disinterested directors or otherwise.

Any repeal or modification of this Article M shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

N. The Corporation may transfer its corporate domicile from the Marshall Islands to any other place in the world.

O. These Articles were duly adopted in accordance with Section 93 of the BCA and were authorized by the unanimous written consents of the Board of Directors and shareholders of the Corporation.

SK 25767 0001 1182735 v2

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EX-2.4

Exhibit 2.4

STAR BULK CARRIERS CORP.

2010 EQUITY INCENTIVE PLAN

ARTICLE I

General

1.1   Purpose

The Star Bulk Carriers Corp. 2010 Equity Incentive Plan (the "Plan") is designed to provide certain key persons, whose initiative and efforts are deemed to be important to the successful conduct of the business of Star Bulk Carriers Corp. (the "Company"), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.

1.2   Administration

(a)Administration.  The Plan shall be administered by the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors (the "Board") or such other committee of the Board as may be designated by the Board to administer the Plan (the Compensation Committee or such committee, as applicable, the "Administrator"); in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), the Administrator shall be composed of two or more directors, each of whom is a "Non-Employee Director" (a "Non-Employee Director") under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the "SEC") under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time, Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Persons to receive Awards (as defined below) under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9) make all determinations necessary or advisable in administering the Plan; (10) correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (11) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons.

(b)General Right of Delegation.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it and may revoke any such allocation or delegation at any time.

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

(d)Delegation of Authority to Senior Officers.  The Administrator may, in accordance with the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to employees (other than officers) of the Company and its Subsidiaries (including any such prospective employee) and consultants of the Company and its Subsidiaries; provided, however, that in no event shall any such officer be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (I) individuals who are subject to Section 16 of the 1934 Act, or (ii) officers of the Company (or directors of the Company) to whom authority to grant or amend Awards has been delegated hereunder.

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

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1.3   Persons Eligible for Awards

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

1.4   Types of Awards

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

1.5   Shares Available for Awards; Adjustments for Changes in Capitalization

(a)Maximum Number.  Subject to adjustment as provided in Section 1.5(e), the aggregate number of shares of common stock of the Company, par value $0.01 ("Common Stock"), with respect to which Awards may at any time be granted under the Plan shall be 2,000,000. The following shares of Common Stock shall again become available for Awards under the Plan: (I) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee. Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.

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

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

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

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

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

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

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

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

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

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

1.6   Definitions of Certain Terms

(a)The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the stock exchange upon which such shares are listed, as reported for such day in The Wall Street Journal, or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day. If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day. Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator. The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.

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

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

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

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

(B)any excessive unauthorized absenteeism by the grantee;

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

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

(E)any act by the grantee that is inconsistent with the best interests of the Company or any of its Affiliates;

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

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

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

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

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

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

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

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(c)"Affiliate" shall mean (I) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.

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

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

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

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

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

ARTICLE II

Awards Under The Plan

2.1   Agreements Evidencing Awards

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

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2.2   Grant of Stock Options and Stock Appreciation Rights

(a)Stock Option Grants.  The Administrator may grant stock options ("options") to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan. No option will be treated as an "incentive stock option" for purposes of the Code. The Administrator shall not grant an Award in the form of stock options to an individual who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock (as defined below) underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A.

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

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

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

2.3   Exercise of Options and Stock Appreciation Rights

Subject to the other provisions of this Article 11 and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:

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

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

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

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

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

2.4   Termination of Employment; Death Subsequent to a Termination of Employment

(a)General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2,4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board may exercise any outstanding option or stock appreciation right on the following terms and conditions: (I) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship or dismissal from the Board, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship or dismissal from the Board but in no event after the original expiration date of the Award.

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

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

(d)Disability.  If a grantee incurs a termination of employment or consultancy/service relationship or a dismissal from the Board by reason of a disability (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination or dismissal, remain exercisable for a period of one year after such termination or dismissal of employment; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award. For this purpose, "disability" shall mean any physical or mental condition that would qualify the grantee for a disability benefit under the long-term disability plan maintained by the Company or its Affiliate, as applicable, or, if there is no such plan, a physical or mental condition that prevents the grantee from performing the essential functions of the grantee's position (with or without reasonable accommodation) for a period of six consecutive months. The existence of a disability shall be determined by the Administrator.

(e)Death.

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

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

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

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2.5   Transferability of Options and Stock Appreciation Rights

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

2.6   Grant of Restricted Stock

(a)Restricted Stock Grants.  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan. A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine and, in the event the restricted shares are newly issued by the Company, makes payment to the Company or its Exchange Agent by certified or official bank check (or the equivalent thereof acceptable to the Administrator) in an amount at least equal to the par value of the shares covered by the Award (which payment may be waived at the time of grant of the restricted stock Award to the extent the restricted shares granted hereunder are otherwise deemed to be fully paid and non-assessable).

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

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

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

(e)Consequence of Termination of Employment.  Unless otherwise set forth in the applicable Award Agreement, (I) a grantee's termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death or disability (as defined in Section 2.4(d)) shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death or disability, all shares of restricted stock that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date. Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).

2.7   Grant of Restricted Stock Units

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

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

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(c)Consequence of Termination of Employment.  Unless otherwise set forth in the applicable Award Agreement, (I) a grantee's termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death or disability (as defined in Section 2.4(d)) shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death or disability, all restricted stock units that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date. Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(c) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise. The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(c).

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

(e)Transferability of Restricted Stock Units.  Except as otherwise provided in an applicable Award Agreement evidencing a restricted stock unit, no restricted stock unit granted under the Plan shall be assignable or transferable. The Administrator may, in any applicable Award Agreement evidencing a restricted stock unit, permit a grantee to transfer all or some of the restricted stock units to (I) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator. Following any such transfer, any transferred restricted stock units shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

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2.8   Grant of Unrestricted Stock

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

ARTICLE III

Miscellaneous

3.1   Amendment of the Plan; Modification of Awards

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

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

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

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3.2   Consent Requirement

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

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

3.3   Nonassignability

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

3.4   Taxes

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

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

3.5   Change in Control

(a)Change in Control Defined.  For purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:

(i)any "person" (as defined in Section 13(d)(3) of the 1934 Act), corporation or other entity (other than (A) the Company, (13) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, or (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company) acquires "beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company;

(ii)the sale of all or substantially all the Company's assets in one or more related transactions to a Person or group of Persons, other than such a sale (A) to a Subsidiary which does not involve a change in the equity holdings of the Company or (B) to an entity which has acquired all or substantially all the Company's assets (any such entity described in clause (A) or (B), the "Acquiring Entity") if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock of the Company, and such voting power among the persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;

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(iii)any merger, consolidation, reorganization or similar event of the Company or any Subsidiary as a result of which the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold 50% or more of the aggregate voting power of the capital stock of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) and such voting power among the Persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;

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

(v)during any period of 24 consecutive calendar months, individuals:

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

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

shall cease to constitute a majority of the Board.

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

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

(i)notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any Award in the form of an option or stock appreciation right shall be immediately exercisable;

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

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

(c)Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction. For purposes of the Plan and any Award Agreement granted hereunder, the term "Company" shall include any successor to Star Bulk Carriers Corp,

3.6   Operation and Conduct of Business

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

3.7   No Rights to Awards

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

3.8   Right of Discharge Reserved

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

3.9   Non-Uniform Determinations

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

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3.10   Other Payments or Awards

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

3.11   Headings

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

3.12   Effective Date and Term of Plan

(a)Adoption; Stockholder Approval.  The Plan was adopted by the Board on 23rd of February 2010. The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's stockholders.

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

3.13   Restriction on Issuance of Stock Pursuant to Awards

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

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

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

3.15   Severability

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

3.16   Sections 409A and 457A

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

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3.17   Forfeiture; Clawback

The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee's breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any of its Affiliates or (ii) a financial restatement that reduces the amount of bonus or incentive compensation previously awarded to a grantee that would have been earned had results been properly reported.

3.18   No Trust or Fund Created

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

3.19   No Fractional Shares

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

3.20   Governing Law

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

SK 02089 0009 1184682

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EX-4.5

Exhibit 4.5

Dated 10June 2009

STAR BULK CARRIERS CORP.

as Borrower

STAR EPSILON LLC

STAR GAMMA LLC

STAR DELTA LLC

STAR THETA LLC and

STAR ZETA LLC

as Existing Owners

-and-

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Appendix 1

as Lenders

-and-

COMMERZBANK AG

as Agent and as Security Trustee

FIRST SUPPLEMENTAL AGREEMENT

in relation to a Loan Agreement dated 27 December 2007

in respect of a loan facility of (originally) US$120,000,000

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	DEFINITIONS	1
2	REPRESENTATIONS AND WARRANTIES	3
3	AGREEMENT OF THE CREDITOR PARTIES	4
4	CONDITIONS	4
5	VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS	6
6	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS	10
7	EXPENSES	10
8	COMMUNICATIONS	11
9	SUPPLEMENTAL	11
10	LAW AND JURISDICTION	11
SCHEDULE 1 LENDERS		12
SCHEDULE 2 DETAILS OF INITIAL CHARTERPARTIES		13

THIS FIRST SUPPLEMENTAL AGREEMENT is dated la June 2009 and made BETWEEN:

(1) STAR BULK CARRIERS CORP., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) STAR EPSILON LLC, STAR GAMMA LLC, STAR DELTA LLC, STAR THETA LLC and STAR ZETA LLC, each a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (each an “Existing Owner” and, together, the “Existing Owners”);

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders; and

(4) COMMERZBANK AG, acting through its office at Ness 7-9, D-20457, Hamburg, Germany, as Agent and Security Trustee.

BACKGROUND

(A) By a loan agreement dated 27 December 2007 (the “Loan Agreement”) made between (i) the Borrower as borrower, (ii) the Lenders as lenders, (iii) the Agent and (iv) the Security Trustee, it was agreed that the Lenders would make available to the Borrower a loan facility of (originally) up to US$120,000,000 (the “Loan”).

(B) The Borrower has requested that the Lenders agree to (inter alia) reduce the security cover requirement to 111 per cent. for the period 31 December 2008 to 31 January 2010 (the “Waiver Period”).

(C) This Agreement sets out the terms and conditions on which the Lenders agree to:

(i) reduce the security cover requirement during the Waiver Period subject to:

(a) increasing the Margin to 2 per cent. during the Waiver Period;

(b) receiving certain additional security for the obligations of the Borrower under the Loan Agreement and the other Finance Documents; and

(c) the amendment and/or variation of certain other provisions of the Loan Agreement; and

(ii) the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters.

NOW THEREFORE IT IS HEREBY AGREED

1   DEFINITIONS

1.1 Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this First Supplemental Agreement.

1.2 In this First Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:

“ALPHA” means the 1992-built Capesize bulk carrier of 175,075 deadweight tons registered in the ownership of Star A under the Marshall Islands flag with the name “STAR ALPHA”;

“Cash Collateral Account” means an account opened or to be opened in the name of the Borrower with the Agent designated “Star Bulk Carriers Corp. - Cash Collateral Account”, or any other account (with that or another office of the Agent) which is designated by the Agent as the Cash Collateral Account for the purposes of the Loan Agreement;

“Cash Collateral Account Pledge” means, in relation to the Cash Collateral Account, the first priority pledge over that account to be executed by the Borrower in favour of the Lenders in such form as the Lenders may approve or require;

“Effective Date” means the date on which the conditions precedent in Clause 4 are satisfied;

“Existing Ships” means, together, “C DUCKLING”, “F DUCKLING”, “G DUCKLING”, “I DUCKLING” and “J DUCKLING” and, in the singular, means any of them;

“Intercreditor Deed” means the deed dated 0 June 2009 between (i) the Borrower, (ii) the New Owner, (iii) the Security Trustee as first mortgagee and (iv) Piraeus Bank A.E. as second mortgagee coordinating the rights of the Security Trustee and Piraeus Bank A.E in connection with the New Owner and “ALPHA” in such form as the Lender may approve or require;

“Mortgage Addendum” means, in relation to each Existing Ship, the first addendum to the Mortgage on that Existing Ship, executed or to be executed by the Existing Owner of that Ship in favour of the Lenders in such form as the Lenders may approve or require and, in the plural, means all of them;

“New Charterparty Assignment” means a first priority assignment of the relevant Initial Charterparty or, as the case may be, any Future Charterparty in respect of “ALPHA” executed or to be executed by the New Owner in favour of the Security Trustee in such form as the Lenders may approve or require and, in the plural, means both of them;

“New Earnings Account” means an account opened or to be opened in the name of the New Owner with the Agent designated “Star Alpha LLC - Earnings Account”, or any other account (with that or another office of the Agent) which is designated by the Agent as the Earnings Account for “ALPHA” for the purposes of the Loan Agreement;

“New Earnings Account Pledge” means the first priority pledge over the New Earnings Account to be executed by the New Owner in favour of the Lenders in such form as the Lenders may approve or require;

“New Finance Documents” means, together, the Cash Collateral Account Pledge, the Intercreditor Deed, the New Guarantee, the New Mortgage, the New General Assignment, any New Charterparty Assignment, the New Earnings Account Pledge, the New Manager’s Undertaking and the New Shares Pledge and, in the singular, means any of them;

“New General Assignment” means a first priority general assignment of the Earnings, Insurances and Requisition Compensation in respect of “ALPHA” executed or to be executed by the New Owner in favour of the Security Trustee in such form as the Lenders may approve or require;

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“New Guarantee” means the guarantee of the obligations of the Borrower under the Loan Agreement and the other Finance Documents executed or to be executed by the New Owner in favour of the Security Trustee in such form as the Lenders may approve or require;

“New Manager’s Undertaking” means a first priority letter of undertaking including (inter alia) an assignment of each Approved Manager’s interests in the Insurances of “ALPHA” executed or to be executed by each Approved Manager in favour of the Security Trustee in such form as the Lenders may approve or require agreeing certain matters in relation to the management of “ALPHA” and subordinating the rights of that Approved Manager against “ALPHA” and the New Owner to the rights of the Creditor Parties under the Finance Documents;

“New Mortgage” means the first preferred Marshall Islands mortgage over “ALPHA” executed or to be executed by the New Owner in favour of the Security Trustee in such form as the Lenders may approve or require;

“New Shares Pledge” means a pledge of the limited liability company interests in the New Owner to be executed by the Borrower in favour of the Security Trustee in such form as the Lenders may approve or require; and

“New Owner” means Star Alpha LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, The Marshall Islands.

1.3 Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this First Supplemental Agreement. References to Clauses are to clauses of this First Supplemental Agreement save as may be otherwise expressly provided in this First Supplemental Agreement.

2   REPRESENTATIONS AND WARRANTIES

2.1 The Borrower hereby represents and warrants to the Agent, as at the date of this First Supplemental Agreement, that the representations and warranties set forth in Clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this First Supplemental Agreement) are true and correct as if all references therein to “this Agreement” were references to the Loan Agreement as further amended by this First Supplemental Agreement.

2.2 The Borrower hereby further represents and warrants to the Agent that as at the date of

this First Supplemental Agreement:

(a) it is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this First Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this First Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement (including, but not limited to, the New Finance Documents and the Mortgage Addenda) and the other Finance Documents as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this First Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and/or the New Finance Documents and while all or any part of the Commitment remains outstanding;

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(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this First Supplemental Agreement, the Cash Collateral Account Pledge and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this First Supplemental Agreement and all such other documents as contemplated hereby (including, but not limited to, the New Finance Documents and the Mortgage Addenda) does not and will not, from the date of this First Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and/or the New Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents and/or the New Finance Documents) on any of such property or assets; and

(e) it has fully disclosed in writing to the Agent all facts which it knows or which it should reasonably know and which are material for disclosure to the Agent in the context of this First Supplemental Agreement and all information furnished by the Borrower or on its behalf relating to its business and affairs in connection with this First Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.

3  AGREEMENT OF THE CREDITOR PARTIES

3.1 The Lenders, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this First Supplemental Agreement, hereby agrees with the Borrower, subject to and upon the terms and conditions of this First Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to:

(a) reduce the Relevant Percentage to 111 per cent. of the Loan during the Waiver Period; and

(b) the amendments/variations of the Loan Agreement and the other Finance Documents referred to in Clause 5.

3.2 The Borrower and the Existing Owners agree and confirm that the Loan Agreement and the Finance Documents to which each is a party shall remain in full force and effect and each of the Borrower and each Existing Owner shall remain liable under the Loan Agreement and the Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder.

3.3 The agreement of the Creditor Parties contained in Clauses 3.1 and 3.2 shall have effect

on and from the Effective Date.

4 CONDITIONS

4.1 The agreements of the Lenders contained in Clause 3.1 of this First Supplemental Agreement shall all be expressly subject to the condition that the Agent shall have received in form and substance satisfactory to it and its legal advisers on or before on or before the Effective Date:

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(a) evidence that the persons executing this First Supplemental Agreement on behalf of the Borrower and the Existing Owners are duly authorised to execute the same;

(b) a certificate of an officer of the New Owner confirming the names of all its directors and shareholders and having attached thereto true and complete copies of its incorporation and constitutional documents;

(c) true and complete copy of the resolution passed at a meeting of the directors of the Borrower authorising and approving the execution of this First Supplemental Agreement, each New Finance Document to which it is a party and any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on its behalf;

(d) true and complete copies of the resolutions passed at separate meetings of the sole director and shareholders of the New Owner and each Existing Owner authorising and approving the execution of the New Finance Documents to which each is a party or, as the case may be, this First Supplemental Agreement and the relevant Mortgage Addendum and any other document or action to which each is or is to be a party and authorising its sole director or other representatives to execute the same on its behalf;

(e) the original of any power of attorney issued by the Borrower, the New Owner and each Existing Owner pursuant to such resolutions aforesaid;

(f) the fees referred to in Clause 7.2 of this First Supplemental Agreement have been received in full by the Agent;

(g) evidence that “ALPHA” is:

(i) registered in the name of the New Owner under the laws and flag of the Marshall Islands; and

(ii) insured in accordance with the relevant provisions of the New Mortgage and all requirements thereof in respect of such insurances have been fulfilled;

(h) each New Finance Document and each Mortgage Addendum has been duly executed (and of each document to be delivered under each of them) by the Borrower, the New Owner or, as the case may be, the relevant Existing Owner together with evidence that:

(i) the New Mortgage has been registered against “ALPHA” with first priority in accordance with the laws of the Marshall Islands;

(ii) each Mortgage Addendum has been duly registered as an addendum to the Mortgage to which it relates in accordance with the laws of the Marshall Islands;

(iii) all notices required to be served under each New General Assignment and any New Charterparty Assignment have been served and acknowledged in the manner therein provided; and

(iv) save for the Security Interests created by or pursuant to the New Mortgage, the New General Assignment and any Charterparty Assignment, there are no Security Interests of any kind whatsoever on “ALPHA” or her Earnings, Insurances or Requisition Compensation;

(i) a certified true copy of the Initial Charterparty entered into in respect of “ALPHA” duly signed by the parties thereof;

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0) evidence that the New Earnings Account and the Cash Collateral Account have been opened and all mandate forms, documentation required by each Creditor Party in relation to the Borrower and any Security Party pursuant to that Creditor Party’s “know your customer” requirements have been received;

(k) copies of the Management Agreements in respect of “ALPHA”;

(I) the New Manager’s Undertaking executed by each Approved Manager in favour of the Security Trustee;

(m) evidence that the New Owner is a direct or indirect wholly-owned subsidiary of the Borrower;

(n) copies of ISM DOC, SMC and the International Ship Security Certificate under the ISPS Code in respect of “ALPHA”;

(o) a survey report in respect “ALPHA” addressed to the Agent, stated to be for the purposes of this Agreement and not earlier than 3 days from the date of this Agreement from an independent marine surveyor selected by the Agent in respect of the physical condition of the Ship;

(p) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this First Supplemental Agreement and the New Finance Documents (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Agent deems appropriate;

(q) such legal opinions as the Agent may require in respect of the matters contained in this First Supplemental Agreement, the New Finance Documents and each Mortgage Addendum; and

(r) evidence that the agent referred to in clause 30.4 of the Loan Agreement has accepted its appointment as agent for service of process under this First Supplemental Agreement and the New Finance Documents.

5VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS

5.1 In consideration of the agreement of the Lenders contained in Clause 3.1 of this First Supplemental Agreement, the Borrower hereby agrees with the Lenders that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

(a) by inserting in clause 1.2 thereof the definitions of “Intercreditor Deed” and “Mortgage Addendum”, set out in Clause 1.2;

(b) the definition of, and references throughout each of the Finance Documents to, a Mortgage relevant to an Existing Ship, shall be construed as if the same referred to that Mortgage as amended and supplemented by the relevant Mortgage Addendum;

(c) by adding the following new definitions in clause 1.2 thereof:

““Account” means each of the Earnings Accounts and the Cash Collateral Account and, in the plural, means all of them;

“Account Pledge” means each of the Earnings Account Pledges and the Cash Collateral Account Pledge and, in the plural, means all of them;

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“ALPHA” means the 1992-built Capesize bulk carrier of 175,075 metric deadweight tons registered in the ownership of Star A under the Marshall Islands flag with the name of “STAR ALPHA”;

“Cash Collateral Account” means an account opened or to be opened in the name of the Borrower with the Agent designated “Star Bulk Carriers Corp. - Cash Collateral Account”, or any other account (with that or another office of the Agent) which is designated by the Agent as the Cash Collateral Account for the purposes of this Agreement;

“Cash Collateral Account Pledge” means, in relation to the Cash Collateral Account, the first priority pledge over that Account executed or to be executed by the Borrower in favour of the Lenders in such form as the Lenders may approve or require;

“Intercreditor Deed” means the deed entered or to be entered between (i) the Borrower, (ii) Star A, (iii) the Security Trustee as first mortgagee and (iv) Piraeus Bank A.E. as second mortgagee coordinating the rights of the Security Trustee and Piraeus Bank A.E in connection with Star A and “ALPHA” in such form as the Lender may approve or require;

“Star A” means Star Alpha LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MI-196960, The Marshall Islands;

“Waiver Period” means the period commencing on 31 December 2008 and ending on 31 January 2010;”;

(d) by adding to the definition of “Finance Documents” in clause 1.2 thereof a new sub-paragraph (j) as follows:

“(j) the Intercreditor Deed;”;

(e) by redesignating the existing sub-paragraph (j) of the definition of “Finance Documents” in clause 1.2 thereof as a new sub-paragraph (k);

(f) by adding a new paragraph (c) in the definition of “LIBOR” in clause 1.2 thereof as follows:

“(c) if during the Waiver Period the rate quoted on REUTERS BBA Page LIBOR 01 does not reflect the cost to a Lender of funding its Contribution (or a part of it) during the Interest Period;

(g) by adding the words “or, during the Waiver Period, if the rate quoted on REUTERS BBA Page LIBOR 01 does not reflect a Lender’s cost of funding for that Interest Period” after the words “LIB OR 01” in the first line of sub-paragraph (b) of the definition of “LIBOR” in clause 1.2 thereof;

(h) “by deleting the definition of “Margin” in clause 1.3 thereof and replacing it with the following new definition:

““Margin” means:

(a) during the Waiver Period, 2 per cent. per annum; and

(b) at all other times, if the Asset Cover Percentage is:

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(i) less than or equal to 60 per cent. 0.80 per cent. per annum;

(ii) more than 60 per cent. but less than or equal to 70 per cent. 0.90

per cent. per annum;

(iii) more than 70 per cent. but less than or equal to 75 per cent., 1.00 per cent. per annum; and

(iv) more than 75 per cent., 1.25 per cent. per annum;”;

(i) by deleting the word “Earnings” in:

(i) sub-paragraph (f) of the definition of “Finance Documents” in clause 1.2 thereof

(ii) in the second line of clause 18.2(a) thereof; and

(iii) in the third line of clause 18.2(b) thereof;

(j) by adding to the definition of “Owner” in clause 1.2 thereof a new sub-paragraph (a) as follows:

(i)            “(a)“ALPHA”, Star A;”;

(k) by redesignating the existing sub-paragraphs (a), (b), (c), (d) and (e) of the definition of

“Owner” in clause 1.2 thereof as a new sub-paragraph (b), (c), (d), (e) and (f) respectively;

(1) by adding the words ““ALPHA”,” after the word “together,” in the definition of “Ships”

in clause 1.2 thereof;

(m) by adding at the beginning of clause 5.5(a) thereof the words “(at any time other than during the Waiver Period)”;

(n) by adding the following as a new clause 11.21 in the Loan Agreement:

“11.21   Pail passu treatment of Creditor Parties. The Borrower shall not restructure any other Financial Indebtedness incurred by it or any of its subsidiaries or agree with any bank or financial institution other than a Creditor Party any terms or conditions in connection with a waiver of any breach which are more favourable (in the Agent’s sole and absolute discretion) than those confirmed in the supplemental agreement dated June 2009 made between the parties hereto or which would disadvantage the Creditor Parties or prejudice the rights of the Creditor Parties under this Agreement or any of the other Finance Documents.”

(o) by adding the words “(in the case of Clauses 12.3(d) and 12.7, such permission not to be unreasonably withheld and shall be either granted or withheld on a case-by-case basis taking into account (1) the market conditions prevailing at the relevant time and (ii) the most recent Borrower’s cash flow prognosis)” after the words “permit” in the third line of clause 12.1 thereof;

(p) by adding the following as new clauses 12.7 and 12.8 in the Loan Agreement:

“12.7 Dividends and investments. During the Waiver Period the Borrower will not:

(a) declare or pay any dividend or effect any form of distribution to shareholders, or;

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(b) make any kind of investment (other than in the ordinary course of its business), or”

12.8 Minimum Liquidity. The Borrowers shall maintain with the Agent in the Cash Collateral Account an amount of at least $6,000,000 (the “Minimum Amount”) in freely available cash deposits unless:

(a) the Relevant Percentage of the Loan is equal to or more than 125 per cent; or

(b) the Borrower applies the Minimum Amount in prepayment of the Loan in accordance with the terms of Clause 8.”;

(q) by deleting the words “the Earnings Account” in the second line of clause 18.3 thereof and replacing them with the words “any Earnings Account”;

(r) by deleting clause 30 thereof in its entirety and replacing it with the following:

“30 LAW AND JURISDICTION

30.1 English law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

30.2 Exclusive English jurisdiction. Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

30.3 Choice of forum for the exclusive benefit of the Creditor Parties. Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

30.4 Process agent. The Borrower irrevocably appoints Eurofin International Ltd, whose present address is Chelsea Harbour, London SW10 OXD, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

30.5 Creditor Party rights unaffected. Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

30.6 Meaning of “proceedings”.  In this Clause 30, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure and a “Dispute” means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.”;

9

(q) by deleting Schedule 2 thereof and replacing it with Schedule 2 hereto;

(r) by construing all references therein to “this Agreement” where the context admits as being references to “this Agreement as the same is amended and supplemented by this First Supplemental Agreement and as the same may from time to time be further supplemented and/or amended”; and

(s) by construing references to each of the Finance Documents as being references to each such document as it is from time to time supplemented and/or amended.

5.2 Amendments to Finance Documents. With effect on and from the Effective Date each of the Finance Documents other than the Loan Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this First Supplemental Agreement; and

(b) by construing references throughout each of the Finance Documents to “this Agreement”, “this Deed”, “hereunder and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this First Supplemental Agreement.

5.3 Finance Documents to remain in full force and effect. The Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this First Supplemental Agreement.

6 CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS

6.1 Save for the alterations to the Loan Agreement and the other Finance Documents made or to be made pursuant to this First Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this First Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the other Finance Documents shall continue and remain valid and enforceable.

7 EXPENSES

7.1 Fees and expenses. The provisions of clause 20 (fees and expenses) of the Loan Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary amendments.

7.2 Facility fees. The Borrower shall pay to the Agent on the date of this Agreement a

restructuring fee of $180,000 to be distributed equally between the Lenders.

10

8 COMMUNICATIONS

8.1 General. The provisions of clause 28 (notices) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9 SUPPLEMENTAL

9.1 Counterparts. This Agreement may be executed in any number of counterparts.

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

10 LAW AND JURISDICTION

10.1 Governing law. This Agreement shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions. The provisions of clause 30 (law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary medications.

IN WITNESS WHEREOF the parties hereto have caused this First Supplemental Agreement to be duly executed the day and year first above written.

11

SCHEDULE 1

LENDERS

Lender	Lending Office
Commerzbank AG	Ness 7-9 D-20457 Hamburg Germany

12

SCHEDULE 2

DETAILS OF INITIAL CHARTERPARTIES

Ship	Net Hire Rate ($/day)		Estimated Delivery Date	Charter Period (months)	Charterer
“ALPHA”
“STAR GAMMA”		38,000	Delivered on 27 January 2009	35 to 37 months	Korea Line Corp.
“STAR DELTA”		11,250	Delivered on 7 February 2009	11 to 13 months	Global Maritime Investments Inc.
“STAR EPSILON”		25,500	Delivered on 12 April2009	59 to 61 months	Ishhar Overseas FZE
“STAR ZETA”		42,500	Delivered on 24 May 2008	35 to 37 months	Dampskibsselskabelt Norden S.A.
“STAR THETA”		11,300	Delivered on 25 April 2009	11 to 13 months	Cargill International S.A
					.

13

EXECUTION PAGE

BORROWER
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR BULK CARRIERS CORP.	)
EXISTING OWNERS
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR EPILON LLC	)
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR GAMMA LLC	)
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR DELTA LLC	)
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR THETA LLC.	)
SIGNED by Georgia Mastagaki	)	/s/ Georgia Mastagaki
for and on behalf of	)
STAR ZETA LLC	)
LENDER
SIGNED by Vassiliki Georgopoulos	)	/ s/ Vassiliki Georgopoulos
for and on behalf of	)
COMMERZBANK AG	)
AGENT
SIGNED by Vassiliki Georgopoulos	)	s/ Vassiliki Georgopoulos
for and on behalf of	)
COMMERZBANK AG	)

14

SECURITY TRUSTEE
SIGNED by Vassiliki Georgopoulos		)	/s/ Vassiliki Georgopoulos
for and on behalf of		)
COMMERZBANK AG		)
Witness to all the Above signature		) )
Name:	Irene Graff		/s/ Irene Graff
Address	Watson Farley & Williams
	2, Defteras Merarchias Str.
	Piraeus 185 36
	Greece

SK 25767 0001 1184527

15

EX-4.6

Exhibit 4.6

Dated 27 January 2010

STAR BULK CARRIERS CORP.

as Borrower

STAR EPSILON LLC

STAR GAMMA LLC

STAR DELTA LLC

STAR THETA LLC and

STAR ZETA LLC

as Owners

-and-

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Appendix 1

as Lenders

-and-

COMMERZBANK AG

as Agent and as Security Trustee

_______________________________

SECOND SUPPLEMENTAL AGREEMENT

_______________________________

in relation to a Loan Agreement dated 27 December 2007

(as amended and supplemented by a first supplemental agreement dated 10 June 2009)

in respect of a loan facility of (originally) US$120,000,000

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	DEFINITIONS	2
2	REPRESENTATIONS AND WARRANTIES	2
3	AGREEMENT OF THE CREDITOR PARTIES	3
4	CONDITIONS	4
5	VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS	4
6	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS	7
7	EXPENSES	7
8	COMMUNICATIONS	8
9	SUPPLEMENTAL	8
10	LAW AND JURISDICTION	8
SCHEDULE 1 LENDERS		9
SCHEDULE 2 DETAILS OF INITIAL CHARTERPARTIES		10

THIS SECOND SUPPLEMENTAL AGREEMENT is dated 27 January 2010 and made

BETWEEN:

(1) STAR BULK CARRIERS CORP.,a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) STAR EPSILON LLC, STAR GAMMA LLC, STAR DELTA LLC, STAR THETA LLC and STAR ZETA LLC,each a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (each an "Owner"and, together, the "Owners");

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;and

(4) COMMERZBANK AG,acting through its office at Ness 7-9, D-20457, Hamburg, Germany, as Agent and Security Trustee.

BACKGROUND

(A) By a loan agreement dated 27 December 2007 (as amended and supplemented by a supplemental agreement dated 10 June 2009, the "Loan Agreement")made between (i) the Borrower as borrower, (ii) the Lenders as lenders, (iii) the Agent and (iv) the Security Trustee, it was agreed that the Lenders would make available to the Borrower a loan facility of (originally) up to US$120,000,000 (the "Loan").

(B) The Borrower has requested that the Lenders agree to (inter alia):

(i) reduce the security cover requirement to:

(a) 111 per cent. for the period 1 February 2010 to 30 June 2010; and

(b) per cent. for the period 1 July 2010 to 31 January 2011;

(ii) consent to the sale of "STAR ALPHA", the release of an amount of US$19,850,000 from the sales proceeds of such ship to its Owner; and

(iii) consent to payment of dividends not exceeding US$0.05 per share in each financial quarter; and

(iv) a temporary reduction (from US$1,000,000 to US$650,000) in the minimum liquidity to be maintained by the Borrower in respect of each Fleet Vessel.

(C) This Agreement sets out the terms and conditions on which the Lenders agree to:

(i) the Borrower's requests referred to in Recital (B) above subject to:

(a) maintaining the Margin of 2 per cent. during the Second Waiver Period (as defined below);

(b) the amendment and/or variation of certain other provisions of the Loan Agreement; and

(ii) the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters.

NOW THEREFORE IT IS HEREBY AGREED

1. DEFINITIONS

1.1 Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this Second Supplemental Agreement.

1.2 In this Second Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:

"Effective Date"means the date on which the conditions precedent in Clause 4 are satisfied;

"Existing Ships"means, together, "C DUCKLING", "F DUCKLING", "G DUCKLING", "I DUCKLING" and "J DUCKLING" and, in the singular, means any of them;

"Second Mortgage Addendum"means, in relation to each Existing Ship, the second addendum to the Mortgage on that Existing Ship, executed or to be executed by the Owner of that Ship in favour of the Lenders in such form as the Lenders may approve or require and, in the plural, means all of them; and

"Second Waiver Period"means the period commencing 1 February 2010 and ending on (and including) 31 January 2011.

1.3 Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this Second Supplemental Agreement. References to Clauses are to clauses of this Second Supplemental Agreement save as may be otherwise expressly provided in this Second Supplemental Agreement.

2. REPRESENTATIONS AND WARRANTIES

2.1 The Borrower hereby represents and warrants to the Agent, as at the date of this Second Supplemental Agreement, that the representations and warranties set forth in Clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this Second Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this Second Supplemental Agreement.

2.2 The Borrower hereby further represents and warrants to the Agent that as at the date of this Second Supplemental Agreement:

(a) it is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this Second Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this Second Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement (including, but not

2

limited to and the Second Mortgage Addenda) and the other Finance Documents as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this Second Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding;

(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Second Supplemental Agreement and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this Second Supplemental Agreement and all such other documents as contemplated hereby (including, but not limited to, the Second Mortgage Addenda) does not and will not, from the date of this Second Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents) on any of such property or assets; and

(e) it has fully disclosed in writing to the Agent all facts which it knows or which it should reasonably know and which are material for disclosure to the Agent in the context of this Second Supplemental Agreement and all information furnished by the Borrower or on its behalf relating to its business and affairs in connection with this Second Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.

3. AGREEMENT OF THE CREDITOR PARTIES

3.1 The Lenders, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this Second Supplemental Agreement, hereby agree with the Borrower, subject to and upon the terms and conditions of this Second Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to:

(a) reduce the Relevant Percentage to (as that term is defined in clause 15.1 of the Loan Agreement):

(i) 111 per cent. for the period 1 February 2010 to (and including) 30 June 2010; and

(ii) 118 per cent. at all times thereafter during the Second Waiver Period;

(b) the sale of "STAR ALPHA" and the release of an amount of $19,850,000 from the sales proceeds of such Ship to its Owner;

(c) the distribution by the Borrower of dividends not exceeding $0.05 per share in each financial quarter;

(d) a temporary reduction in the minimum liquidity requirement set out in clause 12.5(b) of the Loan Agreement (from $1,000,000 per Fleet Vessel to $650,000); and

(e) the amendments/variations of the Loan Agreement and the other Finance Documents referred to in Clause 5.

3

3.2 The Borrower and the Owners agree and confirm that the Loan Agreement and the Finance Documents to which each is a party shall remain in full force and effect and each of the Borrower and each Owner shall remain liable under the Loan Agreement and the Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder.

3.3 The agreement of the Creditor Parties contained in Clauses 3.1 and 3.2 shall have effect on and from the Effective Date.

4. CONDITIONS

4.1 The agreements of the Lenders contained in Clause 3.1 of this Second Supplemental Agreement shall all be expressly subject to the condition that the Agent shall have received in form and substance satisfactory to it and its legal advisers on or before on or before the Effective Date:

(a) evidence that the persons executing this Second Supplemental Agreement on behalf of the Borrower and the Owners are duly authorised to execute the same;

(b) a true and complete copy of the resolution passed at a meeting of the directors of the Borrower authorising and approving the execution of this Second Supplemental Agreement and any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on its behalf;

(c) true and complete copies of the resolutions passed at separate meetings of the sole director and shareholders of each Owner authorising and approving this Second Supplemental Agreement and the relevant Second Mortgage Addendum and any other document or action to which each is or is to be a party and authorising its sole director or other representatives to execute the same on its behalf;

(d) the original of any power of attorney issued by the Borrower and each Owner pursuant to such resolutions aforesaid;

(e) each Second Mortgage Addendum (and each document to be delivered pursuant to each of them) has been duly executed by the relevant Owner together with evidence that each Second Mortgage Addendum has been duly registered as an addendum to the Mortgage to which it relates in accordance with the laws of the Marshall Islands;

(f) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Second Supplemental Agreement (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Agent deems appropriate;

(g) such legal opinions as the Agent may require in respect of the matters contained in this Second Supplemental Agreement and each Second Mortgage Addendum; and

(h) evidence that the agent referred to in clause 30.4 of the Loan Agreement has accepted its appointment as agent for service of process under this Second Supplemental Agreement.

5. VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS

5.1 In consideration of the agreement of the Lenders contained in Clause 3.1 of this Second Supplemental Agreement, the Borrower hereby agrees with the Lenders that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

4

(a) by inserting in clause 1.2 thereof the definition of "Second Mortgage Addendum", set out in Clause 1.2;

(b) the definition of, and references throughout each of the Finance Documents to, a Mortgage relevant to an Existing Ship, shall be construed as if the same referred to that Mortgage as amended and supplemented by the relevant Second Mortgage Addendum;

(c) by deleting the definitions of "ALPHA", "Intercreditor Deed", "Star A" and "Waiver Period" in clause 1.2 thereof;

(d) by adding the following new definitions in clause 1.2 thereof:

""Waiver Period" means the period commencing on 31 December 2008 and ending on 31 January 2011;

"Waiver Period A" means the period commencing on 31 December 2008 and ending on 31 January 2010;

"Waiver Period B"means the period commencing on 1 February 2010 and ending on 30 June 2010;

"Waiver Period C"means the period commencing on 1 July 2010 and ending on 3I January 2011;";

(e) by deleting sub-paragraph (j) and redesignating the existing sub-paragraph (k) as a new sub-paragraph (j) in the definition of "Finance Documents" in clause 1.2 thereof;:

(f) by deleting sub-paragraph (a) and redesignating the existing sub-paragraphs (b), (c), (d), (e) and (f) as new sub-paragraphs (a), (b), (c), (d) and (e) respectively in the definition of "Owner" in clause 1.2 thereof;

(g) by deleting the word ""ALPHA"," after the word "together," in the definition of "Ships" in clause 1.2 thereof;

(h) by deleting clause 8.2 thereof and replacing it with the following:

"8.2 Repayment Dates. The first repayment instalment for each Tranche shall be repaid on 29 January 2010, each subsequent repayment instalment shall be repaid at 3-monthly intervals thereafter and the last instalment shall be repaid together with the relevant Balloon Instalment, on 31 October 2016.";

(i) by adding the words "and the supplemental agreement dated January 2010, each" after the words "10 June 2009" in the fifth line of clause 11.21 thereof;

(j) by deleting clause 12.5(b) thereof and replacing it with the following:

"(b)           the members of the Group will maintain Liquid Funds in an amount of:

(i) for as long as the Borrower maintains the Minimum Amount in the Cash Collateral Account pursuant to Clause 12.8, $650,000 per Fleet Vessel; and

(ii) at all other times, at least the higher of $10,000,000 and (ii) $1,000,000 per Fleet Vessel.";

(k) by deleting clause 12.7 thereof and replacing it with the following new clause:

5

"12.7 Dividends and investments. The Borrower will not:

(a)           during the Waiver Period A:

(i) declare or pay any dividend or effect any form of distribution to shareholders, or

(ii) make any kind of investment (other than in the ordinary course of its business); and

(b)           during the Waiver Period B and the Waiver Period C:

(i) declare or pay any dividend or effect any form of distribution to shareholders which exceeds $0.05 per share in any quarterly period falling within a financial year of the Borrower.";

(ii) repurchase of any of its issued share capital; or

(iii) make any kind of investment (other than in the ordinary course of its business),

Provided that the Agent (acting on the instructions of the Majority Lenders) may agree, on a case-by-case basis, to a request from the Borrower to a waiver of any of the provisions of this clause 12.7(b) subject to (i) the provisions of Clause 12.1 and (ii) no Event of Default being in existence on the date of the Borrower's request and the Agent being satisfied that no Event of Default will occur following the Agent's consent to such request.";

(l) by deleting clause 12.8 thereof and replacing it with the following new clause:

"12.8 Minimum Liquidity. The Borrowers shall maintain during the Waiver Period with the Agent in the Cash Collateral Account an amount of at least $7,250,000 (the "Minimum Amount")in freely available cash deposits unless the Borrower applies the Minimum Amount in prepayment of the Loan in accordance with the terms of Clause 8. If on the last day of the Waiver Period the Agent is satisfied that the Relevant Percentage of the Loan is equal to or more than 135 per cent it shall, following a request of the Borrower, release any balance then standing to the credit of the Cash Collateral Account to the Borrower subject to no Event of Default then being in existence or occurring as a result of the release of such funds.";

(m) by adding at the end of paragraph (b) of Clause 15.1 thereof the words "(including, without limitation, the amount standing from time to time to the credit of the Cash Collateral Account)";

(n) by deleting the definition "Relevant Percentage" in clause 15.1 thereof and replacing it with the following new definition:

""Relevant Percentage"means:

(A) for the period commencing on the date of this Agreement and ending on 30 December 2008, 125 per cent;

(B) during the Waiver Period A and the Waiver Period B, 111 per cent.;

(C) during the Waiver Period C, 118 per cent; and

6

(D) at all times thereafter, 135 per cent";

(q)           by adding the following new clause 20.1(c) thereof:

"(c) on the earlier of (i) the date on which the Borrower makes any prepayment in accordance with clause 8 of the Loan Agreement and (ii) 29 January 2010, a restructuring fee of $180,000 to be distributed equally between the Lenders.";

(r)           by deleting Schedule 2 thereof and replacing it with Schedule 2 hereto;

(s) by construing all references therein to "this Agreement" where the context admits as being references to "this Agreement as the same is amended and supplemented by this Second Supplemental Agreement and as the same may from time to time be further supplemented and/or amended"; and

(t) by construing references to each of the Finance Documents as being references to each such document as it is from time to time supplemented and/or amended.

5.2 Amendments to Finance Documents. With effect on and from the Effective Date each of the Finance Documents other than the Loan Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this Second Supplemental Agreement; and

(b) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Second Supplemental Agreement.

5.3 Finance Documents to remain in full force and effect. The Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this Second Supplemental Agreement.

6. CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS

6.1 Continuance of Loan Agreement and the other Finance Documents. Save for the alterations to the Loan Agreement and the other Finance Documents made or to be made pursuant to this Second Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Second Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the other Finance Documents shall continue and remain valid and enforceable.

7. EXPENSES

7.1 Fees and expenses. The provisions of clause 20 (fees and expenses) of the Loan Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary amendments.

7

8. COMMUNICATIONS

8.1 General. The provisions of clause 28 (notices) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9. SUPPLEMENTAL

9.1 Counterparts. This Agreement may be executed in any number of counterparts.

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

10. LAW AND JURISDICTION

10.1 Governing law. This Agreement shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions. The provisions of clause 30 (law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary medications.

IN WITNESS WHEREOF the parties hereto have caused this Second Supplemental Agreement to be duly executed the day and year first above written.

8

EXECUTION PAGE

BORROWER
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR BULK CARRIERS CORP.	)
OWNERS
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR EPSILON LLC	)
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR GAMMA LLC	)
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR DELTA LLC	)
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR THETA LLC	)
SIGNED by Georgia Mastagaki	)
for and on behalf of	)	/s/ Georgia Mastagaki
STAR ZETA LLC	)

LENDER
SIGNED by Irene Graff	)
for and on behalf of	)	/s/ Irene Graff
COMMERZBANK AG	)

AGENT
SIGNED by Irene Graff	)
for and on behalf of	)	/s/ Irene Graff
COMMERZBANK AG	)

SECURITY TRUSTEE
SIGNED by Irene Graff	)
for and on behalf of	)	/s/ Irene Graff
COMMERZBANK AG	)

Witness to all the	)
above signatures	)

Name:	CHRISOFOROS BISMPIKOS                                 /s/ CHRISOFOROS BISMPIKOS
	SOLICITOR
Address:	Watson, Farley & Williams
	89 AKTI MIAOULI
	PIRAEUS 185 36 – GREECE

SK 25767 0001 1183619

EX-4.10

Exhibit 4.10

Dated 7 May 2009

STAR BULK CARRIERS CORP.

as Borrower

STAR BETA LLC

STAR EPSILON LLC

STAR GAMMA LLC

STAR DELTA LLC

STAR OMICRON LLC

STAR THETA LLC

STAR ZETA LLC and

LAMDA LLC

as Existing Owners

-and-

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Appendix 1

as Lenders

-and-

PIRAEUS BANK A.E.

as Agent, Swap Bank and Security Trustee

-and-

HSH NORDBANK AG

as Swap Bank

FIRST SUPPLEMENTAL AGREEMENT

in relation to a Loan Agreement dated 14 April 2008

(as amended and supplemented by a supplemental letter

dated 17 April 2008 and as further amended and restated

by an amending and restating agreement dated 18 September 2008)

in respect of a loan facility of (originally)US$170,000,000

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	DEFINITIONS	2
2	REPRESENTATIONS AND WARRANTIES	4
3	AGREEMENT OF THE CREDITOR PARTIES	5
4	CONDITIONS	5
5	VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS	7
6	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS	11
7	EXPENSES	12
8	COMMUNICATIONS	12
9	SUPPLEMENTAL	12
10	LAW AND JURISDICTION	12
SCHEDULE 1 LENDERS		13
SCHEDULE 2 DETAILS OF INITIAL CHARTERPARTIES		14
SCHEDULE 3		15
PART B FORM OF COMPLIANCE CERTIFICATE		15

THIS FIRST SUPPLEMENTAL AGREEMENT is dated 7 May 2009 and made BETWEEN:

(1) STAR BULK CARRIERS CORP., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) STAR BETA LLC, STAR EPSILON LLC, STAR GAMMA LLC, STAR DELTA LLC, STAR OMICRON LLC, STAR THETA LLC, STAR ZETA LLC and LAMDA LLC, each a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (each an "Existing Owner" and, together, the "Existing Owners");

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

(4) PIRAEUS BANK A,E. acting through its office at 47-49 Akti Miaouli, Piraeus, Greece, as Agent, First Swap Bank and Security Trustee; and

(5) HSH NORDBANK AG acting through its office at Martensdamm 6, D-24103 Kiel, Federal Republic of Germany as Second Swap Bank.

BACKGROUND

(A) By a loan agreement dated 14 April 2008 (as amended and supplemented by a supplemental letter dated 17 April 2008 and as further amended and restated by an amending and restating agreement dated 18 September 2008, the "Loan Agreement") made between (i) the Borrower as borrower, (ii) the Lenders as lenders, (iii) the Agent, (iv) the First Swap Bank and the Second Swap Bank (together, the "Swap Banks" and each a "Swap Bank") and (v) the Security Trustee, it was agreed that the Lenders would make available to the Borrower a loan facility of (originally) up to US$170,000,000 (the "Loan").

(B) The Borrower has requested that the Lenders agree to (inter alia):

(i) waive the application of the security cover provisions in clause 15.1 of the Loan Agreement during the period commencing on 31 December 2008 and ending on 28 February 2010 (the "Waiver Period");

(ii) reduce the security cover requirement to 110 per cent. of the aggregate of the Loan and the Swap Exposure for the period 1 March 2010 to 28 February 2011;

(iii) waive the Borrower's financial covenant regarding the Leverage Ratio set out in clause 12.5(b) of the Loan Agreement during the Waiver Period;

(iv) waive the Borrower's hedging obligations set out in clause 12.8 of the Loan Agreement;

(v) receive certain additional security for the obligations of the Borrower under the Loan Agreement and the other Finance Documents; and

(vi) the amendment and/or variation of certain other provisions of the Loan Agreement.

(C)           This Agreement sets out the terms and conditions on which the Lenders agree to:

(i) waive the application of clause 15.1 during the Waiver Period, reduce the security cover requirement during 2010, waive the Borrower's financial covenant regarding the Leverage Ratio set out in clause 12.5(b) of the Loan Agreement during the Waiver Period and waive the Borrower's hedging obligations set out in Clause 12.8 of the Loan Agreement and to receive certain additional security for the obligations of the Borrower under the Loan Agreement and the other Finance Documents;

(ii) the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters; and

(iii) certain other amendments and/or variations to the Loan Agreement and the other Finance Documents.

NOW THEREFORE IT IS HEREBY AGREED

1              DEFINITIONS

1.1 and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this First Supplemental Agreement.

1.2 In this First Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:

"Cash Deposit Account"means an account opened or to be opened in the name of the Borrower with the Agent in Piraeus designated "Star Bulk Carriers Corp. - Cash Deposit Account", or any other account (with that or another office of the Agent) which is designated by the Agent as the Cash Deposit Account for the purposes of the Loan Agreement;

"Cash Deposit Account Pledge"means, in relation to the Cash Deposit Account, the first priority pledge over that account to be executed by the Borrower in favour of the Lenders in such form as the Lenders may approve or require;

"Effective Date"means the date on which the conditions precedent in Clause 4 are satisfied;

"KAPPA"means the 2001-built bulk carrier of 52,055 metric deadweight tons registered in the ownership of Star K under the Marshall Islands flag with the name "STAR KAPPA".

"New Charterparty Assignment"means, in relation to each New Ship, a first priority assignment of any Initial Charterparty or, as the case may be, Future Charterparty in respect thereof executed or to be executed by the relevant New Owner in favour of the Security Trustee in such form as the Lenders may approve or require and, in the plural, means both of them;

"New Earnings Account"means, in relation to each New Owner, an account opened or to be opened in the name of the relevant New Owner with the Agent in Piraeus designated "[name of New Owner]-Earnings Account", or any other account (with that or another office of the Agent) which is designated by the Agent as the Earnings Account for that New Ship for the purposes of the Loan Agreement and, in the plural, means both of them;

"New Earnings Account Pledge"means, in relation to each New Earnings Account, the first priority pledge over that New Earnings Account to be executed by the New Owner in favour of the Lenders in such form as the Lenders may approve or require;

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"New Finance Documents"means, together, the Cash Deposit Account Pledge, the New Guarantees, the New Mortgages, the New General Assignments, any New Charterparty Assignments, the New Earnings Account Pledges and the New Manager's Undertakings and, in the singular, means any of them;

"New General Assignment"means, in relation to each New Ship, a first priority general assignment of the Earnings, Insurances and Requisition Compensation in respect thereof executed or to be executed by the relevant New Owner in favour of the Security Trustee in such form as the Lenders may approve or require and, in the plural, means both of them;

"New Guarantee"means, in relation to each New Owner, the guarantee of the obligations of the Borrower under the Loan Agreement and the other Finance Documents executed or to be executed by that New Owner in favour of the Security Trustee in such form as the Lenders may approve or require and, in the plural, means both of them;

"New Manager's Undertaking"means, in relation to each New Ship, a first priority letter of undertaking including (inter alia) an assignment of each Approved Manager's interests in the Insurances of that New Ship executed or to be executed by each Approved Manager in favour of the Security Trustee in such form as the Lenders may approve or require agreeing certain matters in relation to the management of that New Ship and subordinating the rights of that Approved Manager against that New Ship and the New Owner thereof to the rights of the Creditor Parties under the Finance Documents and, in the plural, means both of them;

"New Mortgage"means, in relation to each New Ship, the first preferred Marshall Islands mortgage over that Ship executed or to be executed by the relevant New Owner in favour of the Security Trustee in such form as the Lenders may approve or require and, in the plural, means both of them;

"New Mortgage Addendum"means:

(a) in relation to "STAR BETA" and "SINFONIA", the third addendum; and

(b) in relation to each Additional Ship and "OMICRON", the first addendum,

to the Mortgage on that Ship, executed or to be executed by the Owner of that Ship in favour of the Lenders in such form as the Lenders may approve or require and, in the plural, means both of them;

"New Owner"means each of Star K and Star Y and, in the plural, means both of them;

"New Ship"means each of "KAPPA" and "YPSILON" and, in the plural, means both of them;

"Star K"means Star Kappa LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MI-196960, The Marshall Islands;

"Star Y"means Star Ypsilon LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro ME-196960, The Marshall Islands; and

"YPSILON"means the 1991-built bulk carrier of 150,940 metric deadweight tons registered in the ownership of Star Y under the Marshall Islands flag with the name "STAR YPSILON".

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1.3 Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this First Supplemental Agreement. References to Clauses are to clauses of this First Supplemental Agreement save as may be otherwise expressly provided in this First Supplemental Agreement.

2              REPRESENTATIONS AND WARRANTIES

2.1 The Borrower hereby represents and warrants to the Agent, as at the date of this First Supplemental Agreement, that the representations and warranties set forth in Clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this First Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this First Supplemental Agreement.

2.2 The Borrower hereby further represents and warrants to the Agent that as at the date of this First Supplemental Agreement:

(a) it is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this First Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this First Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement (including, but not limited to, the New Finance Documents and the New Mortgage Addenda) and the other Finance Documents as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this First Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and/or the New Finance Documents and while all or any part of the Commitment remains outstanding;

(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this First Supplemental Agreement, the Cash Deposit Account Pledge and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this First Supplemental Agreement and all such other documents as contemplated hereby (including, but not limited to, the New Finance Documents and the New Mortgage Addenda) does not and will not, from the date of this First Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and/or the New Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents and/or the New Finance Documents) on any of such property or assets; and

(e) it has fully disclosed in writing to the Agent all facts which it knows or which it should reasonably know and which are material for disclosure to the Agent in the context of this First Supplemental Agreement and all information furnished by such Borrower or on its behalf relating to its business and affairs in connection with this First Supplemental Agreement was and remains true, correct and complete in all material respects and there

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are no other material facts or considerations the omission of which would render any such information misleading.

3              AGREEMENT OF THE CREDITOR PARTIES

3.1 The Lenders, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this First Supplemental Agreement, hereby agrees with the Borrower, subject to and upon the terms and conditions of this First Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to:

(a) waive the application of the security cover provisions of clause 15.1 of the Loan Agreement during the Waiver Period;

(b) reduce the security cover requirement to 110 per cent. of the aggregate of the Loan and the Swap Exposure for the period 1 March 2010 to 28 February 2011;

(c) waive the Borrower's financial covenant regarding the Leverage Ratio set out in clause 12.5(b) of the Loan Agreement during the Waiver Period;

(d) waive the Borrower's hedging obligations set out in Clause 12.8 of the Loan Agreement; and

(e) the amendments/variations of the Loan Agreement and the other Finance Documents referred to in Clause 5.

3.2 The Borrower and the Existing Owners agree and confirm that the Loan Agreement and the Finance Documents to which each is a party shall remain in full force and effect and each of the Borrower and each Existing Owner shall remain liable under the Loan Agreement and the Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder,

3.3 The agreement of the Creditor Parties contained in Clauses 3.1 and 3.2 shall have effect on and from the Effective Date.

4              CONDITIONS

4.1 The agreements of the Lenders contained in Clause 3.1 of this First Supplemental Agreement shall all be expressly subject to the condition that the Agent shall have received in form and substance satisfactory to it and its legal advisers on or before on or before the Effective Date:

(a) evidence that the persons executing this First Supplemental Agreement on behalf of the Borrower and the Existing Owners are duly authorised to execute the same;

(b) a certificate of an officer of each New Owner confirming the names of all the directors and shareholders of that New Owner and having attached thereto true and complete copies of its incorporation and constitutional documents;

(c) true and complete copy of the resolution passed at separate meeting of the directors of the Borrower authorising and approving the execution of this First Supplemental Agreement and each New Finance Document to which it is a party and any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on its behalf;

(d) true and complete copies of the resolutions passed at separate meetings of the sole director and shareholders of each New Owner and each Existing Owner authorising and

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approving the execution of the New Finance Documents to which each is a party or, as the case may be, the relevant New Mortgage Addendum and any other document or action to which each is or is to be a party and authorising its sole director or other representatives to execute the same on its behalf;

(e) the original of any power of attorney issued by the Borrower, each New Owner and each Existing Owner pursuant to such resolutions aforesaid;

(f) the fees referred to in Clause 7.2 of this First Supplemental Agreement have been received in full by the Agent;

(g) evidence that each New Ship is:

(i) registered in the name of the New Owner owning that Ship under the laws and flag of the Marshall Islands; and

(ii) insured in accordance with the relevant provisions of the New Mortgage applicable to that New Ship and all requirements thereof in respect of such insurances have been fulfilled;

(h) each New Finance Document and each New Mortgage Addendum has been, duly executed by the relevant New Owner or, as the case may be, the relevant Existing Owner together with evidence that:

(i) each New Mortgage has been registered against the relevant New Ship with first priority in accordance with the laws of the Marshall Islands;

(ii) each New Mortgage Addendum in connection with the relevant Ship has been duly registered in accordance with the laws of the Marshall Islands;

(iii) all notices required to be served under each New General Assignment and any New Charterparty Assignment have been served and acknowledged in the manner therein provided; and

(iv) save for the Security Interests created by or pursuant to the New Mortgages, the New General Assignments and any Charterparty Assignments, there are no Security Interests of any kind whatsoever on either New Ship or her Earnings, Insurances or Requisition Compensation;

(i) a certified true copy of the Initial Charterparty entered into in respect of a New Ship duly signed by the parties thereof;

(j) evidence that the New Earnings Accounts and the Cash Deposit Account have been opened and all mandate forms, documentation required by each Creditor Party in relation to the Borrower and any Security Party pursuant to that Creditor Party's "know your customer" requirements have been received;

(k) copies of the Management Agreements in respect of each New Ship;

(l) the New Manager's Undertakings executed by the Approved Manager in favour of the Security Trustee;

(m) evidence that each New Owner is a direct or indirect wholly-owned subsidiary of the Borrower;

(n) copies of ISM DOC, SMC and the International Ship Security Certificate under the MPS Code in respect of each New Ship;

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(o) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this First Supplemental Agreement and the New Finance Documents (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Agent deems appropriate;

(p) such legal opinions as the Agent may require in respect of the matters contained in this First Supplemental Agreement, the New Finance Documents and the New Mortgage Addenda; and

(q) evidence that the agent referred to in clause 30.4 of the Loan Agreement has accepted its appointment as agent for service of process under this First Supplemental Agreement and the New Finance Documents.

5              VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS

5.1 In consideration of the agreement of the Lenders contained in Clause 3.1 of this First Supplemental Agreement, the Borrower hereby agrees with the Lenders that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

(a) by inserting in clause 1.3 thereof the definitions of "Effective Date", "New Mortgage Addendum", "New Owner" and "New Ship" set out in Clause 1.2;

(b) the definition of, and references throughout each of the Finance Documents to, the Mortgage relevant to "STAR BETA", "SINFONIA", "OMICRON" and each Additional Ship, shall be construed as if the same referred to that Mortgage as amended and supplemented by the relevant New Mortgage Addendum;

(c) by adding the words ", the Cash Deposit Account" after the words "Earnings Accounts" in the definition of "Account" in clause 1.3 thereof;

(d) by adding the words ", the Cash Deposit Account Pledge" after the words "Earnings Accounts Pledges" in the definition of "Account Pledge" in clause 1.3 thereof;

(e) by adding the words ", New Ship" after the words "Collateral Ship" in:

(i) the definition of "Charterparty Assignment";

(ii) in sub-paragraph (a) of the definition of "General Assignment";

(iii) in sub-paragraph (a) of the definition of "Manager's Undertaking";

(iv) in sub-paragraph (a) of the definition of "Mortgage", each in clause 1.1 thereof;

(f) by deleting the definition of "Margin" in clause 1.3 thereof and replacing it with the following new definition:

""Margin"means, subject to Clause 5.14:

(a) in respect of the period 1 January 2009 to (and including) the later of (i) the day on which the Borrower shall deliver the Compliance Certificate in respect of the financial year ending on 31 December 2010 in accordance with Clause 12.6 and (ii) 31 December 2010 (the "Applicable Date"),2 per cent. per annum; and

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(b) in respect of the period commencing on the date following the Applicable Date and ending on the Margin Review Date, 1.5 per cent. per annum;";

(g) by adding to the definition of "Finance Documents" in clause 1.3 thereof a new sub­paragraph (1) as follows:

"(l) the Cash Deposit Account Pledge;";

(h) by redesignating the existing sub-paragraph (1) of the definition of "Finance Documents" in clause 1.3 thereof as a new sub-paragraph (m) respectively;

(i) by deleting the definition of "SINFONIA" in clause 1.3 thereof and replacing it with the following new definition:

""SINFONIA" means, the 1991-built capsize bulk carrier of 184,400 deadweight tons registered in the name of Star L under the Marshall Islands flag with the name "STAR SIGMA";";

(j) by adding the following new definitions in clause 1.3 thereof:

""Cash Deposit Account"means an account opened or to be opened in the name of the Borrower with the Agent in Piraeus designated "Star Bulk Carriers Corp. - Cash Deposit Account", or any other account (with that or another office of the Agent) which is designated by the Agent as the Cash Deposit Account for the purposes of this Agreement;

"Cash Deposit Account Pledge"means, in relation to the Cash Deposit Account, the first priority pledge over that Account executed or to be executed by the Borrower in favour of the Lenders in such form as the Lenders may approve or require;

"KAPPA"means the 2001-built bulk carrier of 52,055 metric deadweight tons registered in the ownership of Star K under the Marshall Islands flag with the name of "STAR KAPPA";

"YPSILON"means the 1991-built bulk carrier of 150,940 metric deadweight tons registered in the ownership of Star Y under the Marshall Islands flag with the name of "STAR YPSILON";

"Star K"means Star Kappa LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MI-196960, The Marshall Islands;

"Star Y"means Star Ypsilon LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, The Marshall Islands;

"Waiver Period"means the period commencing on 31 December 2008 and ending on 28 February 2010;";

(k) by adding after the words "the Additional Owners" the words ", the New Owners" in the definition of "Owner" in clause 1.3 thereof;

(l) by adding the words ", New Ships" after the words "the Collateral Ships" in the definition of "Ship" in clause 1.3 thereof;

(m) by adding the words "other than, in the case of 12.5(b) below, during the Waiver Period" after the words "at all times" in the first line of clause 12.5 thereof;

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(n) by deleting clause 12.7 thereof in its entirety and replacing it with the following:

"12.7 Dividends. The Borrower:

(a) may, at any time other than during the Waiver Period, pay dividends or make any other form of distribution subject to the satisfaction of the following conditions:

(i) the Agent has received a certificate issued by the chief financial office of the Borrower on the date on which the payment of the dividend is declared which confirms that no Event of Default has occurred which is continuing and that no Event of Default or Potential Event of Default will result from the payment of the dividend or the making of the distribution; and

(ii) the Agent is satisfied that on the date on which the certificate referred to in paragraph (i) is issued:

(A) the Security Cover Percentage is equal to at least 125 per cent.; and

(B) the Borrower is in compliance with the financial covenants set out in Clause 12.5; and

(b) may not, during the Waiver Period, pay any dividends or make any other form of distribution without the prior written consent of the Agent (to be given upon the instructions of all the Lenders).";

(o) by adding at the end of clause 12.8 the following new paragraph:

"Provided that until (and including 31 December 2009) the Borrower shall not be obliged to enter into any of the hedging arrangements referred to in this Clause 12.8 unless the circumstances referred to in paragraph (e) above shall occur before 31 December 2009 in which case the Borrower shall promptly enter into all the hedging arrangements referred to in this Clause 12.8."1

(p) by adding the following new clause 12.9:

"12.9 Minimum Liquidity. The Borrower shall maintain throughout the Security Period in the Cash Deposit Account an amount of $9,000,000.";

(q) by adding the words "at any time other than during the Waiver Period" after the words "the Borrower" in the second line of clause 15.1 thereof;

(r) by deleting the words "Ships" inclause 15.1 thereof and replacing them with the words "Collateral Ships, "SINFON1A" and the New Ships";

(s) by deleting sub-paragraphs (i) and (ii) in clause 15.1 thereof and replacing them with the following new sub-paragraphs:

(i) for the period commencing on 1 March 2010 and ending on 28 February 2011, 110 per cent. of the aggregate of the Loan and the Swap Exposure (if any exists at the relevant time);

(ii) for the period commencing on 1 March 2011 and ending on 18 September 2011, 125 per cent. of the aggregate of the Loan and the Swap Exposure (if any exists at the relevant time); and

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EXECUTION PAGE

BORROWER
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR BULK CARRIERS CORP.	)
EXISTING OWNERS
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR BETA LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR EPSILON LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR GAMMA LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR DELTA LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR OMICRON LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR THETA LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
STAR ZETA LLC	)
SIGNED by George Syllantavos	)
for and on behalf of	)	/s/ George Syllantavos
LAMDA LLC	)

LENDERS
SIGNED by J. Dallas / S. Kriempardis	)
for and on behalf of	)	/s/ J. Dallas / S. Kriempardis
PIRAEUS BANK A.E.	)
SIGNED by Alexia Hatzimichalis	)
for and on behalf of	)	/s/ Alexia Hatzimichalis
HSH NORDBANK AG	)
AGENT
SIGNED by Dallas / S. Kriempardis	)
for and on behalf of	)	/s/ J. Dallas / S. Kriempardis
PIRAEUS BANK A.E.	)
SECURITY TRUSTEE
SIGNED by J. Dallas / S. Kriempardis	)
for and on behalf of	)	/s/ J. Dallas / S. Kriempardis
PIRAEUS BANK A.E.	)
SWAPS BANKS
SIGNED by J. Dallas / S. Kriempardis	)
for and on behalf of	)	/s/ J. Dallas / S. Kriempardis
PIRAEUS BANK A.E.	)
SIGNED by Alexia Hatzimichalis	)
for and on behalf of	)	/s/ Alexia Hatzimichalis
HSH NORDBANK AG	)
Witness to all the	)
above signatures	)	/s/ Pat Skala

Name:	Pat Skala
Address:	Watson, Farley & Williams
	2, DEFTERAS MERARCHIAS
	PIRAEUS 185 36 – GREECE

SK 25767 0001 1183663

EX-4.12

Exhibit 4.12

Dated 25May 2009

STAR BULK CARRIERS CORP.

as Borrower

- and -

STAR COSMO LLC

as Owner

- and -

PIRAEUS BANK A.E.

as Lender

AMENDING AND RESTATING AGREEMENT

relating to a loan facility of (originally) up to US$35,000,000

of which the current outstandings aggregate US$32,000,000

Watson, Farley & Williams

Piraeus

INDEX

Clause		Page
1	INTERPRETATION	1
2	AGREEMENT OF ALL PARTIES TO THE AMENDMENT OF THE LOAN AGREEMENT AND FINANCE DOCUMENTS	2
3	CONDITIONS PRECEDENT	2
4	REPRESENTATIONS AND WARRANTIES	2
5	AMENDMENT OF LOAN AGREEMENT	3
6	FURTHER ASSURANCES	3
7	EXPENSES	4
8	NOTICES	4
9	SUPPLEMENTAL	4
10	LAW AND JURISDICTION	4
SCHEDULE 1	CONDITIONS PRECEDENT DOCUMENTS	5
APPENDIX 1	FORM OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE AMENDMENTS TO THE LOAN AGREEMENT	8

THIS AGREEMENT is made on 25 May 2009

BETWEEN

(1) STAR BULK CARRIERS CORP., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) STAR COSMO LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (the "Primary Owner");and

(3) PIRAEUS BANK A.E. acting through its office at 47-49 Akti Miaouli, Piraeus, Greece, as Lender.

BACKGROUND

(A) By a loan agreement originally made on 1 July 2008 (the "Loan Agreement")made between (i) the Borrower as borrower and (ii) the Lender as lender, the Lender made available to the Borrower a loan facility of (originally) up to $35,000,000 of which the current outstandings aggregate $32,000,000.

(B) The Borrower has requested that the Lender agrees (inter alia):

(i) to waive the application of the security cover provisions in clause 14.1 of the Loan Agreement during the period commencing on the date of this Agreement and ending on 28 February 2010 (the "Waiver Period");

(ii) to waive the Borrower's financial covenant regarding the Leverage Ratio set out in clause 11.5(b) of the Loan Agreement during the Waiver Period; and

(iii) to the amendment and/or variation of certain other provisions of the Loan Agreement.

(C) This Agreement sets out the terms and conditions on which the Lender agrees to waive the application of clause 14.1 during the Waiver Period, the Lender agrees to receive certain additional security for the obligations of the Borrower under the Loan Agreement and the other Finance Documents and to the consequential amendments of the Loan Agreement and the Finance Documents in connection with those matters.

IT IS AGREED as follows:

1 INTERPRETATION

1.2 Defined expressions. Words and expressions defined in the Loan Agreement and the Amended and Restated Loan Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires.

1.3 Definitions. In this Agreement, unless the contrary intention appears:

"Additional Finance Documents"means, together, the Guarantee, the Mortgage, the General Assignment, the Account Pledge and the Manager's Undertaking which relate to the Additional Ship and, in the singular, means any of them;

"Amended and Restated Loan Agreement"means the Loan Agreement as amended and restated by this Agreement in the form set out in Appendix 1;

"Effective Date" means the date on which the Lender notifies the Borrower that the conditions precedent in Clause 3 have been fulfilled;

"Loan Agreement"means the loan agreement as referred to in Recital (A);

"Mortgage Addendum"means, in relation to "STAR COSMO", the first addendum to the Mortgage on that Ship, executed or to be executed by the Primary Owner in favour of the Lender in such form set out as the Lender may approve or require;

"New Finance Documents" means:

(a) this Agreement;

(b) the Additional Finance Documents;

(c) the Amended and Restated Loan Agreement; and

(d) the Mortgage Addendum,

and, in the singular, means any of them;

"Waiver Period"has the meaning ascribed to it in Recital (B).

1.4 Application of construction and interpretation provisions of Loan Agreement. Clauses 1.2 and 1.5 of the Loan Agreement and the Amended and Restated Loan Agreement apply, with any necessary modifications, to this Agreement.

2 AGREEMENT OF ALL PARTIES TO THE AMENDMENT OF THE LOAN AGREEMENT AND FINANCE DOCUMENTS

2.1 Agreement of the parties to this Agreement. The parties to this Agreement agree, subject to and upon the terms and conditions of this Agreement, to the amendment of the Loan Agreement and the Finance Documents to be made pursuant to Clauses 5.1 and 5.2. The agreement of the parties to this Agreement contained in Clause 2.1 shall have effect on and from the Effective Date.

3 CONDITIONS PRECEDENT

3.1 General. The agreement of the parties to this Agreement contained in Clause 2.1 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent. The conditions referred to in Clause 2.1 are that the Lender shall have received the documents and evidence referred to in Schedule 2 in all respects in form and substance satisfactory to the Lender and its lawyers on or before the date of this Agreement or such later date as the Lender may agree with the Borrower.

4 REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties. The Borrower represents and warrants to the Lender that the representations and warranties in clause 9 of the Loan Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where appropriate, each other Finance Document which is being amended by this Agreement, remain true and not misleading if repeated on the date of this Agreement with reference to the circumstances now existing.

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5 AMENDMENT OF LOAN AGREEMENT

5.1 Amendments to Loan Agreement.

(a) With effect on and from the Effective Date the Loan Agreement shall be, and shall be deemed by this Agreement to be, amended and restated in the form of the Amended and Restated Loan Agreement; and

(b) as so amended and restated pursuant to (a) above, the Loan Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

5.2 Amendments to Finance Documents. With effect on and from the Effective Date each of the Finance Documents (other than the Loan Agreement and the Mortgage in respect of the Primary Ship which will be amended and supplemented by the Mortgage Addendum), shall be, and shall be deemed by this Agreement to be, amended as follows:

(a) the definition of, and references throughout each of the Finance Documents to, the Mortgage relevant to the Primary Ship, shall be construed as if the same referred to that Mortgage as amended and supplemented by the Mortgage Addendum;

(b) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and restated or supplemented by this Agreement; and

(c) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.

5.3 The Finance Documents to remain in full force and effect. The Finance Documents shall remain in full force and effect, as amended by:

(a) the amendments contained or referred to in Clause 5.2; and

(b) such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.

6 FURTHER ASSURANCES

6.1 Borrower's obligations to execute further documents etc. The Borrower shall:

(a) execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b) effect any registration or notarisation, give any notice or take any other step; which the Lender may, by notice to the Borrower, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances. Those purposes are:

(a) validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to the Loan Agreement or any other Finance Document, each as amended and restated or supplemented by this Agreement or by the Mortgage Addendum; and

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(b) implementing the terms and provisions of this Agreement.

6.3 Terms of further assurances. The Lender may specify the terms of any document to be executed by the Borrower under Clause 6.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its interests.

6.4 Obligation to comply with notice. The Borrower shall comply with a notice under Clause 6.1 by the date specified in the notice.

6.5 Additional corporate action. At the same time as the Borrower delivers to the Lender any document executed under Clause 6.1(a), the Borrower shall also deliver to the Lender a certificate signed by 2 of the Borrower's directors which shall:

(a) set out the text of a resolution of the Borrower's directors specifically authorising the execution of the document specified by the Lender unless the execution of the relevant document is authorised by the existing resolutions and general power of attorney of the Borrower; and

(b) state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Borrower's articles of association or other constitutional documents.

7 EXPENSES

Reimbursement of expenses. The Borrower shall reimburse to the Lender on demand all reasonable costs, fees and expenses (including, but not limited to, legal fees and expenses) and taxes thereon incurred by the Lender in connection with the negotiation, preparation and execution of each of the New Finance Documents.

8 NOTICES

8.1 General. The provisions of clause 27 (Notices) of the Loan Agreement, as amended and restated by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9 SUPPLEMENTAL

9.1 Counterparts. This Agreement may be executed in any number of counterparts.

9.2 Third party rights. No person who is not a party to this Agreement has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

10 LAW AND JURISDICTION

10.1 Governing law. This Agreement shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions. The provisions of clause 28 (Law and Jurisdiction) of the Loan Agreement, as amended and restated by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

THIS AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Agreement.

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SCHEDULE 1

CONDITIONS PRECEDENT DOCUMENTS

The following are the documents referred to in Clause 3.2:

1 A duly executed original of each New Finance Document duly executed by the parties to it.

2 In relation to the Borrower and each Owner, documents of the kind specified in paragraphs 2, 3, 4 and 5 of Schedule 4, Part A of the Loan Agreement (as amended and restated by this Agreement) with appropriate modifications to refer to this Agreement, the Amended and Restated Loan Agreement and each Additional Finance Document insofar as each is a party thereto.

3 Documentary evidence that:

(a) each Ship is in the absolute and unencumbered ownership of the relevant Owner save as contemplated by the Finance Documents applicable to it and, in the case of the Additional Ship, additionally under the Commerzbank Finance Documents applicable to it;

(b) each Ship maintains the highest available class with such first-class classification society which is a member of IACS as the Lender may approve free of all recommendations and conditions of such classification society;

(c) the Mortgage relative to the Additional Ship and the Mortgage Addendum relative to the

Primary Ship have been duly registered against that Ship as a valid, in the case of the Additional Ship, second preferred mortgage and, in the case of the Primary Ship, addendum to the Mortgage over that Ship according to the laws of the Marshall Islands; and

(d) each Ship is insured in accordance with the provisions of the Amended and Restated Loan Agreement and all requirements therein in respect of insurances have been complied with.

4 Documents establishing that the Additional Ship is managed by the Approved Manager on terms acceptable to the Lender, together with:

(a) the Approved Manager's Undertaking in respect of that Ship; and

(b) copies of the document of compliance (DOC), the safety management certificate (SMC) and the ISSC referred to in paragraph (a) of the definition of the ISM Code Documentation in respect of that Additional Ship certified as true and in effect by its Owner or (as the case may be) the Approved Manager.

5 A valuation of the Additional Ship prepared by an independent sale and purchase ship broker, which the Lender has appointed or approved addressed to the Lender, stated to be for the purposes of this Agreement and prepared in accordance with Clause 14.3 of the Loan Agreement which shows the Market Value of that Ship in an amount acceptable to the Lender.

6 A favourable opinion (at the cost of the Borrower) from an independent insurance consultant acceptable to the Lender on such matters relating to the insurances of each Ship as the Lender may require.

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7 Any further opinions, consents, agreements and documents in connection with this Agreement and the Finance Documents which the Lender may request by notice to the Borrower prior to the Effective Date.

Every copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or the lawyers of the Borrower.

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EXECUTION PAGE

BORROWER
SIGNED by GRORGE SYLLANTAVOS	)
for and on behalf of	)           /s/ GRORGE SYLLANTAVOS
STAR BULK CARRIERS CORP.	)
OWNER
SIGNED by GRORGE SYLLANTAVOS	)
for and on behalf of	)           /s/ GRORGE SYLLANTAVOS
STAR COSMO LLC	)
LENDER
SIGNED by	)
for and on behalf of	)
PIRAEUS BANK A.E.	)

Witness to all the	)
above signatures	)

Name:	CHRISOFOROS BISMPIKOS
	SOLICITOR
Address:	Watson, Farley & Williams
	2, DEETEKAS MERARCHIAS
	PIRAEUS 185 36 – GREECE
	/s/ CHRISOFOROS BISMPIKOS

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APPENDIX 1

FORM OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO

INDICATE AMENDMENTS TO THE LOAN AGREEMENT

Amendments are indicated as follows:

1 additions are indicated by underlined text; and

2 deletions are shown by the relevant text being struck out.

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Date 1 July 2008

as amended and restated

on       May 2009

STAR BULK CARRIERS CORP.

as Borrower

- and -

PIRAEUS BANK A.E.

as Lender

LOAN AGREEMENT

relating to a loan facility of up to US$35,000,000

to part finance the acquisition cost of

m.v. "STAR COSMO" (ex "VICTORIA")

of which the current outstandings aggregate US$32,000,000

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause

1	INTERPRETATION	1
2	FACILITY	15
3	DRAWDOWN	15
4	INTEREST	16
5	INTEREST PERIODS	17
6	DEFAULT INTEREST	18
7	REPAYMENT AND PREPAYMENT	19
8	CONDITIONS PRECEDENT	20
9	REPRESENTATIONS AND WARRANTIES	21
10	GENERAL UNDERTAKINGS	23
11	CORPORATE UNDERTAKINGS	26
12	INSURANCE	28
13	SHIP COVENANTS	33
14	SECURITY COVER	37
15	PAYMENTS AND CALCULATIONS	39
16	APPLICATION OF RECEIPTS	39
17	APPLICATION OF EARNINGS	40
18	EVENTS OF DEFAULT	41
19	FEES AND EXPENSES	45
20	INDEMNITIES	46
21	NO SET-OFF OR TAX DEDUCTION	47
22	ILLEGALITY, ETC	48
23	INCREASED COSTS	48
24	SET-OFF	50
25	TRANSFERS AND CHANGES IN LENDING OFFICE	50
26	VARIATIONS AND WAIVERS	51
27	NOTICES	51
28	SUPPLEMENTAL	53
29	LAW AND JURISDICTION	53
SCHEDULE 1 DRAWDOWN NOTICE		55
SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS		56
SCHEDULE 3 FORM OF COMPLIANCE CERTIFICATE		60
EXECUTION PAGE		61

THIS AGREEMENT is made on 1 July 2008 as amended and restated by an Amending and Restating Agreement (as defined below)

BETWEEN

(1) STAR BULK CARRIERS CORP. as Borrower; and

(2) PIRAEUS BANK A.E. as Lender.

BACKGROUND

The Lender has agreed to make available to the Borrower a loan facility of up to $35,000,000 (being approximately 55 per cent. of the purchase price of the Primary Ship payable pursuant to the MOA) for the purpose of assisting the Primary Owner, a wholly-owned subsidiary of the Borrower, in part-financing the purchase price of that Ship.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Definitions. Subject to Clause 1.5, in this Agreement:

"Account Pledge" means:

(a) in "relation to the Earnings Account relevant to the Primary Ship, a first priority deed creating security in respect of that Earnings Account; and

(b) in relation to the Earnings Account relevant to the Additional Ship, a second priority deed creating security in respect of that Earnings Account,

each in such form as the Lender may approve or require and, in the plural, means both of them;

"Accounting Information"means the annual audited consolidated accounts to be provided by the Borrower to the Lender in accordance with Clause 10.6(a) of this Agreement or the semi-annual unaudited accounts to be provided by the Borrower to the Lender in accordance with Clause 10.6(b) of this Agreement;

"Additional Owner"means Star Alpha LLC, a limited liability corporation formed in the Republic of Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Additional Ship"means the 1992-built bulk carrier of 175,075 metric tons deadweight registered in the ownership of the Additional Owner under the Marshall Islands flag with the name "STAR ALPHA";

"Amending and Restating Agreement"means the amending and restating agreement dated May 2009 made between (i) the Borrower and (ii) the Lender setting out the terms and conditions upon which this Agreement has been amended and restated;

"Approved Manager"means, in relation to each Ship, Star Bulk Management Inc., a corporation incorporated in the Republic of the Marshall Islands having its registered office

at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, or any other company which the Lender may, from time to time, approve as the manager of that Ship;

"Availability Period"means the period commencing on the date of this Agreement and ending on:

(a) 30 July 2008 (or such later date as the Lender may agree with the Borrower); or

(b) if earlier, the date on which the Commitment is fully borrowed, cancelled or terminated;

"Borrower"means Star Bulk Carriers Corp., a corporation incorporated and existing under the laws of Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Business Day"means a day on which banks are open in London, Piraeus and Athens and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

"Charterer"means Korea Lines Corporation of Seoul, Korea;

"Charterparty Assignment"means, in relation to each Ship, an assignment of the rights of the Owner of that Ship under the relevant Initial Charterparty or, as the case may be, any relevant Future Charterparty executed or, as the context may require, to be executed by that Owner in favour of the Lender, in each case, in such form as the Lender may approve or require;

"Commerzbank"means Commerzbank AG acting though its office at Ness 7-9, D­20457, Hamburg, Germany;

"Commerzbank Finance Documents"means, together, all documents defined as "Finance Documents" in the Commerzbank Loan Agreement and, in the singular, means any of them;

"Commerzbank Loan Agreement"means a loan agreement dated 28 December 2007 and made between the Borrower as borrower and Commerzbank as lender in relation to a loan facility of (originally) up to $120,000,000;

"Commerzbank Ships"means, all ships defined as "Ships" in the Commerzbank Loan Agreement and, in the singular, means any of them;

"Commitment"means $35,000,000, as that amount may be reduced, cancelled or terminated in accordance with this Agreement;

"Compliance Certificate"means a certificate in the form set out in Schedule 3 (or in any other form which the Lender approves or requires);

"Compliance Date"means 31 March, 30 June, 30 September and 31 December in each calendar year (or such other dates as of which the Borrower prepares its consolidated financial statements which it is required to deliver to the Lender pursuant to Clause 10.6);

"Contract Price"means $68,800,000 being the purchase price for the Primary Ship payable by the Primary Owner to the Seller pursuant to the MOA;

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"Contractual Currency" has the meaning given in Clause 20,4;

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

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

"Drawdown Notice" means the notice in the form set out in Schedule 1 (or in any other form which the Lender approves or reasonably requires);

"Earnings"means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner thereof or the Lender and which arise out of the use or operation of the Ship owned by it, including (but not limited to):

(a) all freight, hire and passage moneys, compensation payable to that Owner in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;

(b) all moneys which are at any time payable under Insurances in respect of loss of earnings; and

(c) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;

"Earnings Account" means:

(a) in relation to the Primary Owner, an account in the name of that Owner with the Lender designated "Star Cosmo LLC - Earnings Account" or any other account (with that or another office of the Lender);

(b) in relation to the Additional Owner, an account in the name of the Additional Owner with Commerzbank in Hamburg designated "Star Alpha LLC - Earnings Account" or any other account,

each designated by the Lender as the Earnings Account for that Ship for the purpose of this Agreement and, in the plural means both of them;

"EBITDA"means, in relation to a Compliance Date or for any accounting period, the consolidated net income of the Group for that accounting period:

(a) plus, to the extent deducted in computing consolidated net income of the Group for that accounting period, the sum, without duplication, of:

(i) all federal, state, local and foreign taxes and tax distributions;

(ii) Net Interest Expenses; and

(iii) depreciation, depletion, amortisation of intangibles and other non-cash charges or non-cash losses (including non-cash transaction expenses and

3

the amortisation of debt discounts) and any extraordinary losses not incurred in the ordinary course of business;

(b) minus, to the extent added in computing consolidated net income of the Group for that accounting period, any non-cash income or non-cash gains and any extraordinary gains not incurred in the ordinary course of business;

all determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in the Accounting Information;

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

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

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

"Environmental Incident"means, in relation to a Ship:

(a) any release of Environmentally Sensitive Material from that Ship; or

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

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where the Owner thereof and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

"Environmental Law"means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

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

"Event of Default"means any of the events or circumstances described in Clause 18.1;

"Finance Documents"means:

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(a) this Agreement;

(b) the Guarantees;

(c) the Mortgages;

(d) the General Assignments;

(e) the Account Pledges;

(f) the Manager's Undertakings;

(g) any Charterparty Assignment;

(h) the Intercreditor Deed; and

(i) any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, either Owner or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lender under this Agreement or any of the other documents referred to in this definition;

"Financial Indebtedness"means, in relation to a person (the "debtor"), a liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

"Fleet Vessels"means, together, all of the vessels (including, but not limited to, the Ships) from time to time owned by members of the Group and, in the singular, means any of them;

"Future Charterparty"means, in relation to each Ship, any time charterparty, consecutive voyage charter or contract of affreightment in respect of that Ship (other than the Initial Charterparty) of a duration (or capable of being or exceeding a duration) of 11 months or more and any guarantee of such charter or other contract of employment in

5

respect of that Ship to be entered into by the Owner of that Ship and a charterer approved by the Lender in form and substance satisfactory to the Lender;

"GAAP"means generally accepted accounting principles as from time to time in effect in the United States of America;

"General Assignment" means:

(a) in relation to the Primary Ship, a first priority general assignment of the Earnings, the Insurances and any Requisition Compensation of that Ship; and

(b) in relation to the Additional Ship, a second priority general assignment of the Earnings, the Insurances and any Requisition Compensation of that Ship,

each in such form as the Lender may approve or require and, in the plural, means both of them;

"Group"means, together, the Borrower, the Owners and all their respective subsidiaries and any other companies in the same beneficial ownership as the Borrower and/or the Owners;

"Guarantee"means, in relation to each Owner, a guarantee of the Borrower's obligations under this Agreement and the other Finance Documents to which it is a party executed or to be executed by that Owner in favour of the Lender in such form as the Lender shall approve or require and, in the plural, means both of them;

"IACS"means the International Association of Classification Societies;

"Initial Charterparty"means:

(a) in relation to the Primary Ship, the time charterparty dated 7 March 2008 in relation to the Primary Ship made between the Seller and the Charterer as amended and supplemented by a novation agreement dated 5 June 2008 made between the Primary Owner, the Seller and the Charterer pursuant to which the Seller has novated that charterparty in favour of the Primary Owner; and

(b) in relation to the Additional Ship, any charterparty in relation to the Additional Ship of a duration (or capable of being or exceeding a duration) of 12 months or more made on terms and with a charterer acceptable in all respects to the Lender;

"Insurances" means:

(a) all policies and contracts of insurance (including in respect of hull and machinery risks), including entries of either Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, her Earnings or otherwise in relation to her; and

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

"Intercreditor Deed"means the deed entered or to be entered between (i) the Borrower and/or the Additional Owner, (ii) Commerzbank as first mortgagee and (iii) the Lender as second mortgagee coordinating the rights of Commerzbank and the Lender in connection with the Additional Owner and the Additional Ship in such form as the Lender may approve or require;

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"Interest Period"means a period determined in accordance with Clause 5;

"ISM Code"means, in relation to its application to each Owner, each Ship and its operation:

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

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

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

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

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

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

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

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

"ISPS Code"means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation ("IMO") now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of the IMO on Maritime Security in December 2002 and includes any amendments or extensions to it and any regulation issued pursuant to it but shall only apply insofar as it is applicable law in either Ship's flag state and any jurisdiction on which that Ship is operated;

"ISPS Code Documentation"includes, in relation to a Ship:

(a) the International Ship Security Certificate issued pursuant to the ISPS Code in relation to that Ship within the period specified in the ISPS Code; and

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

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"ISSC" means, in relation to a Ship, a valid and current International Ship Security Certificate for that Ship issued under the ISPS Code;

"Lender"means Piraeus Bank A.E. acting through its office at 47-49 Alai Miaouli, Piraeus, Greece (or through another branch notified to the Borrower under Clause 25.6) or its successor or assign;

"Leverage Ratio"means, at any relevant time, the ratio of:

(a) the Total Liabilities (less all Liquid Funds; and

(b) the Market Value Adjusted Total Assets (including, without limitation, the Ships);

"LIBOR"means, for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m. (London time) on the second Business Day prior to the commencement of that Interest Period (and, for the purposes of this Agreement, "REUTERS BBA Page LIBOR 01" means the display designated as "REUTERS BBA Page LIBOR 01" on the Reuters Money News Services or such other page as may replace REUTERS BBA Page LIBOR 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association for the purpose of displaying British Bankers' Association Interest Settlement Rates for Dollars); or

(b) if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum determined by the Lender to be the arithmetic mean of the rates per annum at which deposits in Dollars are offered to the Lender by leading banks in the London Interbank Market at the Lender's request of or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;

"Liquid Funds"means, in respect of the relevant period, the aggregate of cash in hand held by members of the Group with banks or other financial institutions of at least investment grade rating which is free of any Security Interest;

"Loan"means the principal amount for the time being outstanding under this Agreement;

"Major Casualty"means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $250,000 or the equivalent in any other currency;

"Management Agreement"means, in relation to a Ship, an agreement made or to be made between the Owner of that Ship and the Approved Manager in respect of the commercial and/or technical management of the Ship to be in form and substance in every respect satisfactory to the Lender and, in the plural, means both of them;

"Manager's Undertaking"means, in relation to a Ship, an undertaking to be issued by the Approved Manager agreeing certain matters in relation to the management of that Ship to be such form as the Lender may approve or require and, in the plural, means both of them;

8

"Margin" means:

(a) in relation to the period commencing from 1 March 2009 and ending on 28 February 2010, 2 per cent. per annum; and

(b) at all times thereafter, 1.5 per cent. per annum;

"Market Value"means, in relation to the Ship and each Fleet Vessel the market value thereof calculated in accordance with Clause 14.4;

"Market Value Adjusted Total Assets"means, at any time, Total Assets adjusted to reflect the difference between the book values of all Fleet Vessels and the aggregate Market Value of all Fleet Vessels and lease transactions relating to any Fleet Vessels;

"MOA"means the memorandum of agreement dated 22 May 2008 as amended and supplemented by addendum No.1 dated 1 June 2008, each entered into between the Seller and the Primary Owner in respect of the sale of the Primary Ship;

"Mortgage" means:

(a) in relation to the Primary Ship, the first preferred Marshall Islands ship mortgage on that Ship as amended and supplemented by the Mortgage Addendum; and

(b) in relation to the Additional Ship, the second preferred Marshall Islands ship mortgage over that Ship,

each in such form as the Lender may approve or require and, in the plural, means both of them;

"Negotiation Period"has the meaning given in Clause 4.7;

"Net Interest Expenses"means, as of any Compliance Date, the aggregate of all interest, commitment and other fees, commissions, discounts and other costs, charges or expenses accruing due from all the members of the Group during that accounting period less interest income received, determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in the Accounting Information;

"Owner"means each of the Additional Owner and the Primary Owner and, in the plural, means both of them;

"Payment Currency" has the meaning given in Clause 20.4;

"Permitted Security Interests" means:

(a) Security Interests created by the Finance Documents;

(b) liens for unpaid master's and crew's wages in accordance with usual maritime practice;

(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to either Ship not prohibited by this Agreement;

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(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of either Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 13.12(h);

(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Owner is prosecuting or defending such other than in good faith by appropriate steps; and

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

"Pertinent Jurisdiction", in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company's central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;

"Potential Event of Default"means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Lender and/or the satisfaction of any other condition, would constitute an Event of Default;

"Primary Owner"means Star Cosmo LLC, a limited liability company formed in the Republic of the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Primary Ship"means the 2005-built bulk carrier of 52,200 metric deadweight tons acquired by the Primary Owner from the Seller pursuant to the MOA and registered in the ownership of the Primary Owner under the Marshall Islands flag with the name "STAR COSMO";

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"Quotation Date"means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;

"Relevant Person"has the meaning given in Clause 183;

"Repayment Date"means a date on which a repayment is required to be made under Clause 8;

"Requisition Compensation"includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";

"Secured Liabilities"means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

"Security Cover Percentage"means, at any relevant time, the aggregate of the amounts referred in paragraphs (a) and (b) of Clause 14A expressed as a percentage of the Loan;

"Security Interest" means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

"Security Party"means each Owner, the Approved Manager and any other person (except the Lender) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the final paragraph of the definition of "Finance Documents";

"Security Period"means the period commencing on the date of this Agreement and ending on the date on which the Lender notifies the Borrower and the Security Parties that:

(a) all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

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(c) neither the Borrower nor any Security Party has any future or contingent liability under Clause 19, 20, or 21 or any other provision of this Agreement or another Finance Document; and

(d) the Lender does not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

"Seller" means Empress Holding Limited, a corporation incorporated and existing under the laws of Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Ship"means each of the Additional Ship and the Primary Ship and, in the plural, means both of them;

"Total Assets"means, as of any Compliance Date, the aggregate value of all assets of the Group included in the most recent Accounting Information as "current assets" and the value of all investments (valued in accordance with GAAP) and all other tangible and intangible assets of the Group properly included in the most recent Accounting Information as "fixed assets" in accordance with GAAP;

"Total Liabilities"means, as of any Compliance Date, the total liabilities of the Group as at that Compliance Date as shown in the most recent Accounting Information delivered by the Borrower pursuant to Clause 10.6;

"Total Loss"means, in relation to a Ship:

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

(b) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than her proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension); and

(c) any condemnation of that Ship by any tribunal or by any person or persons claiming to be a tribunal; and

(d) any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless she is within 30 days redelivered to the full control of the relevant Owner;

"Total Loss Date"means, in relation to a Ship:

(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:

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(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Owner with the Ship's insurers in which the insurers agree to treat the Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred; and

"Waiver Period"means the period commencing on 31 December 2008 and ending on 28 February 2010.

1.2 Construction of certain terms. In this Agreement:

"approved"means, for the purposes of Clause 12, approved in writing by the Lender;

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

"company"includes any partnership, joint venture and unincorporated association;

"consent"includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

"contingent liability"means a liability which is not certain to arise and/or the amount of which remains unascertained;

"document"includes a deed; also a letter, fax or telex;

"excess risks"means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

"expense"means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"law"includes any form of delegated legislation, any order or decree, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

"legal or administrative action"means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

"liability"includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

"months"shall be construed in accordance with Clause 1.3;

"obligatory insurances"means all insurances effected, or which the Owner is obliged to effect, under Clause 12 or any other provision of this Agreement or another Finance Document;

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"parent company"has the meaning given in Clause 1.4;

"person"includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

"protection and indemnity risks"means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

"regulation"includes any regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

"subsidiary"has the meaning given in Clause 1.4;

"tax"includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

"war risks"includes the risk of mines and all risks excluded by clause 23 of the Institute Time Clauses (Hulls)(1/10/83) or clause 24 of the Institute Time Clauses (Hulls)(1/11/1995).

1.3 Meaning of "month". A period of one or more "months"ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and "month"and "monthly"shall be construed accordingly.

1.4 Meaning of "subsidiary". A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

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(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

and any company of which S is a subsidiary is a parent company of S.

1.5 General Interpretation. In this Agreement:

(a) references in Clause 1.1 to a Finance Document or any other document being in a particular form include references to that form with any modifications to that form which the Lender approves or reasonably requires;

(b) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(c) references to, or to a provision of, any law include any amendment, extension, reenactment or replacement, whether made before the date of this Agreement or otherwise;

(d) words denoting the singular number shall include the plural and vice versa; and

(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

1.6 Headings. In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

2 FACILITY

2.1 Amount of facility. Subject to the other provisions of this Agreement, the Lender shall make available to the Borrower, in a single advance, a loan facility of up to $35,000,000 (being approximately 55 per cent. of the Contract Price).

2.2 Purpose of Loan. The Borrower undertakes with the Lender to use the Loan only for the purpose stated in the preamble to this Agreement and Clause 3.2.

3 DRAWDOWN

3.1 Request for Loan. Subject to the following conditions, the Borrower may request the Loan to be advanced by ensuring that the Lender receives the completed Drawdown Notice not later than 11.00 a.m. (Piraeus time) 3 Business Days prior to the intended Drawdown Date.

3.2 Availability. The conditions referred to in Clause 3.1 are that:

(a) the Drawdown Date has to be a Business Day during the Availability Period;

(b) the Loan shall be on-lent by the Borrower to the Primary Owner and shall be used for the purpose of part-financing the Contract Price of the Primary Ship;

(c) the Loan shall be in an amount not exceeding $35,000,000 (being approximately 55 per cent. of the Contract Price of the Primary Ship payable pursuant to the MOA); and

(d) the Loan shall not exceed the Commitment.

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3.3 Drawdown Notice irrevocable. The Drawdown Notice must be signed by an authorized signatory or director of the Borrower; and once served, the Drawdown Notice cannot be revoked without the prior consent of the Lender.

3.4 Disbursement of Loan. Subject to the provisions of this Agreement, the Lender shall on the Drawdown Date advance the Loan to the Borrower; and payment to the Borrower shall be made to the account of the Seller which the Borrower specifies in the Drawdown Notice.

3.5 Disbursement of Loan to third party. The payment by the Lender under Clause 3.4 shall constitute the advance of the Loan and the Borrower shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to the Loan.

4 INTEREST

4.1 Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

4.2 Normal rate of interest. Subject to the terms of this Agreement, the rate of interest applicable to the Loan (or any part thereof) for each Interest Period relating thereto shall be the aggregate of (i) the Margin and (ii) LIBOR for that Interest Period.

4.3 Payment of accrued interest. In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

4.4 Notification of market disruption. The Lender shall promptly notify the Borrower if:

(a) no rate is quoted on Reuters BBA Page LIBOR 01; or

(b) for any reason the Lender is unable to obtain Dollars in the London Interbank Market in order to fund or continue to fund the Loan (or any part thereof) during any Interest Period; or

(c) LIBOR for that Interest Period does not adequately reflect the Lender's cost of

funding for that Interest Period.

4.5 Suspension of drawdown. If the Lender's notice under Clause 4.4 is served before the Loan is made, the Lender's obligation to make the Loan shall be suspended while the circumstances referred to in the Lender's notice continue.

4.6 Application of alternative rate of interest. Following the service of a notice by the Lender pursuant to Clause 4,4, but before the commencement of the Interest Period to which that notice relates, the Lender shall have the right to:

(a) reduce (in its sole discretion) the duration of the Interest Period selected by the Borrower, unless a shorter period is not available in which case the Lender shall have the right to amend (in its sole discretion) the duration of the Interest Period selected by the Borrower; and/or

(b) determine (in its sole discretion) the relevant rate of interest which shall apply to the Loan during that Interest Period and which shall be the aggregate of (i) the Margin and (ii) either (at the option of the Lender):

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(i) the arithmetic mean of the rates per annum offered, on the relevant Quotation Date, for deposits in Dollars for a period equal to, or as near as possible to, the relevant Interest Period which appear on the Reuters screen at the corresponding electronic pages of (i) KLIEMM (Carl Kliem GmbH), (ii) USDDEPO=ICAP (leap Plc) and (iii) USDDEPO=TTLK (Tullet Prebon Plc); or

(ii) the rate per annum, expressed as a percentage, which reflects the cost to the Lender of funding the Loan (or any part thereof) during that Interest Period from whichever alternative sources are available to the Lender (and as it may select in its sole discretion) in Dollars or in any available currency,

(the "Alternative Rate").

The Lender shall promptly notify the Borrower in writing of any Alternative Rate and any change to the Interest Period selected initially by the Borrower arising through the operation of this Clause 4.6.

4.7 Negotiation of alternative basis for funding. If the Borrower does not agree with the Alternative Rate they shall notify the Lender in writing not later than 2 days after the date on which the Lender serves its notice pursuant to Clause 4.6. The Borrower and the Lender shall use reasonable endeavours to agree, within 5 days after the date on which the Borrower serves its notice of objection to the Alternative Rate (the "Negotiation Period"), an alternative basis (including, but not limited to, an alternative interest period, funding in an alternative currency or currencies and an alternative margin which, for the avoidance of doubt, shall reflect the Lender's cost of funding) for the Lender to continue to fund the Loan during the Interest Period concerned.

4.8 Application of alternative rate of interest. Any Alternative Rate or an alternative basis shall take effect in accordance with the terms notified by the Lender pursuant to Clause 4.6 or, as the case may be, upon the terms agreed pursuant to Clause 4.7. The alternative basis shall continue to apply if the relevant circumstances are continuing at the end of the applicable Interest Period (in the case of the Alternative Rate) or interest period so set by the Lender (in the case of an alternative interest rate) and for so long as the Lender and the Borrower is in agreement as to the alternative basis for funding.

4.9 Prepayment. If the Borrower does not agree with the Interest Period and/or Alternative Rate set by the Lender pursuant to Clause 4.6 and an alternative basis for funding the Loan (or any part thereof) is not agreed pursuant to Clause 4.7 within the Negotiation Period, the Borrower shall prepay the Loan upon demand by the Lender together with all accrued interest thereon at the applicable rate plus the Margin.

5 INTEREST PERIODS

5.1 Commencement of Interest Periods. The first Interest Period applicable to the Loan shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

5.2 Duration of normal Interest Periods. Subject to Clauses 6.3 and 6.4, each Interest Period in respect of the Loan shall be:

(a)  3, 6 or 9 months as notified by the Borrower to the Lender not later than 11.00 a.m. (Piraeus time) 3 Business Days before the commencement of the Interest Period;

(b)  3 months, if the Borrower fails to notify the Lender by the time specified in paragraph (a) above; or

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(c)  such other period as the Lender may agree with the Borrower.

5.3 Duration of Interest Periods for repayment instalments. In respect of an amount due to be repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

5.4 Non-availability of matching deposits for Interest Period selected. If, after the Borrower has selected and the Lender has agreed an Interest Period longer than 6 months, the Lender notifies the Borrower by 11.00 a.m. (Piraeus time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 3 months.

6 DEFAULT INTEREST

6.1 Payment of default interest on overdue amounts. The Borrower shall pay interest in accordance with the following provisions of this Clause 6 on any amount payable by the Borrower under any Finance Document which the Lender does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 18.4, the date on which it became immediately due and payable.

6.2 Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Lender to be 2 per cent. above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 6.3(a) and (b); or

(b) in the case of any other overdue amount, the rate set out at Clause 6.3(b).

6.3 Calculation of default rate of interest. The rates referred to in Clause 6.2 are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);

(b) the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Lender may select from time to time:

(i) LIBOR; or

(ii) if the Lender determines that Dollar deposits for any such period are not being made available to it by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Lender by reference to the cost of funds to it from such other sources as the Lender may from time to time determine.

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6.4 Notification of interest periods and default rates. The Lender shall promptly notify the Borrower of each interest rate determined by it under Clause 6.3 and of each period selected by it for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Lender's notification.

6.5 Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined.

6.6 Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

7 REPAYMENT AND PREPAYMENT

7.1 Repayment instalments. The Borrower shall repay the Loan by (a) 22 consecutive three-monthly instalments of (i) in the case of the first and second instalments, in the amount of $2,000,000 each, (ii) in the case of the third instalment, in the amount of $1,750,000, (iii) in the case of the fourth instalment in the amount of $1,250,000, (iv) in the case of the fifth to tenth instalments (inclusive), in the amount of $875,000 each and (v) in the case of the eleventh to twenty second instalments (inclusive), in the amount of $500,000 each and (b) a balloon payment in the amount of $13,750,000 (the "Balloon Instalment") Provided that if the Loan is drawdown in less than the maximum available amount thereof, each repayment instalment (including the Balloon Instalment) shall be reduced pro rata by an amount in aggregate equal to such undrawn amount.

7.2 Repayment Dates. The first repayment instalment for the Loan shall be repaid on 2 April 2009, each subsequent repayment instalment shall be repaid at 3-monthly intervals thereafter and the last instalment shall be repaid, together with the Balloon Instalment, on 1 July 2014.

7.3 Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.

7.4 Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan on the last day of an Interest Period.

7.5 Conditions for voluntary prepayment. The conditions referred to in Clause 7.4 are that:

(a) a partial prepayment shall be in an amount of $500,000 or a higher integral multiple thereof;

(b) the Lender has received from the Borrower at least 30 days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and

(c) the Borrower has provided evidence satisfactory to the Lender that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with.

7.6 Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Lender and the amount specified in the prepayment

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notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

7.7 Mandatory prepayment. The Borrower shall be obliged to prepay the Relevant Proportion of the Loan if a Ship is sold or becomes a Total Loss:

(a) in the case of a sale, on or before the date on which the sale is completed by delivery of the relevant Ship to its buyer; or

(b) in the case of a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date relative to the Ship and the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.

In this Clause 7.7, "Relevant Proportion"means:

(i) where the Primary Ship is sold or becomes a Total Loss, the whole of the Loan; and

(ii) where the Additional Ship is sold or becomes a Total Loss, an amount which is required to eliminate any shortfall in the ratio set out in Clause 14.1.

7.8 Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 20 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 20.1(b) but without premium or penalty.

7.9 Application of partial prepayment. Each partial prepayment shall be applied in inverse order of maturity against the repayment instalments (including the Balloon Instalment) which are outstanding at the relevant time.

7.10 No reborrowing. No amount prepaid may be reborrowed.

8 CONDITIONS PRECEDENT

8.1 Documents, fees and no default. The Lender's obligation to advance the Loan is subject to the following conditions precedent:

(a) that, on or before the service of the Drawdown Notice, the Lender receives the documents described in Part A of Schedule 2 in form and substance satisfactory to it and its lawyers;

(b) that, on the Drawdown Date but prior to the advance of the Loan, the Lender receives the documents described in Part B of Schedule 2 in form and substance satisfactory to it and its lawyers;

(c) that before the service of the Drawdown Notice the Lender receives the arrangement fee referred to in Clause 19.1 and has received payment of the expenses referred to in Clause 19.2;

(d) that both at the date of the Drawdown Notice and at the Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;

(ii) the representations and warranties in Clause 9.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and

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not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 4.4 has occurred and is continuing; and

(iv) there has been no material adverse change in the financial position, state of affairs or prospects of the Borrower, any Security Party or any member of the Group since the date of the Lender's commitment letter (dated                 ) to the Borrower for the Loan, in the light of which the Lender considers that there is a significant risk that the Borrower or any other Security Party will later become unable to discharge its liabilities under the Finance Documents to which it is a party as they fall due;

(e) that, if the ratio set out in Clause 14.1 were applied immediately following the advance of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(f) that the Lender has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Lender may request by notice to the Borrower prior to the Drawdown Date.

8.2 Waiver of conditions precedent. If the Lender, at its discretion, permits the Loan to be borrowed before certain of the conditions referred to in Clause 8.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Lender may specify).

9 REPRESENTATIONS AND WARRANTIES

9.1 General. The Borrower represents and warrants to the Lender as follows.

9.2 Status. The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands.

9.3 Share capital and ownership. The Borrower has an authorised share capital divided into 61,104,760 common shares and 5,916,150 warrants each of $0.01 par value, issued in registered form.

9.4 Corporate power. The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute the Finance Documents to which it is a party; and

(b) to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party.

9.5 Consents in force. All the consents referred to in Clause 9.4 remain in force and nothing has occurred which makes any of them liable to revocation.

9.6 Legal validity; effective Security Interests. The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

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(a) constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

subject to any relevant insolvency laws affecting creditors' rights generally.

9.7 No third party Security Interests. Without limiting the generality of Clause 9.6, at the time of the execution and delivery of each Finance Document:

(a) the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

9.8 No conflicts. The execution by the Borrower of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of the Borrower; or

(c) any contractual or other obligation or restriction which is binding on the Borrower or any of its assets including, without limitation, its shareholding in each Owner.

9.9 No withholding taxes. All payments which the Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

9.10 No default. No Event of Default or Potential Event of Default has occurred and is continuing.

9.11 Information. All information which has been provided in writing by or on behalf of the Borrower or any Security Party to the Lender in connection with any Finance Document satisfied the requirements of Clause 10.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 10.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower, the Owner or any other member of the Group from that disclosed in the latest of those accounts.

9.12 No litigation. No legal or administrative action involving the Borrower, either Owner or any other member of the Group (including, without limitation, any action relating to any alleged or actual breach of the ISM Code and the ISPS code and/or any action relating to the MOA and the Initial Charterparty) has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken.

9.13 Validity and completeness of MOA and Initial Charterparty. The MOA and the Initial Charterparty each constitute valid, binding and enforceable obligations of the parties thereto in accordance with their terms; and:

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(a) the copies of each of the MOA and the Initial Charterparty delivered to the Lender before the date of this Agreement is a true and complete copy thereof; and

(b) no amendments or additions to the MOA or the Initial Charterparty have been agreed nor has any party thereto waived any of their respective rights under the MOA or the Initial Charterparty.

9.14 No rebates etc. There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Primary Owner, the Seller or a third party in connection with the purchase by the Primary Owner of the Ship other than as disclosed to the Lender in writing on or prior to the date of this Agreement (including, without limitation, any information disclosed in the Form F-1 registration statement and prospectus filed with the US Securities and Exchange Commission, a copy of which has been delivered to the Lender).

9.15 Compliance with certain undertakings. At the date of this Agreement, the Borrower is in compliance with Clauses 10.2, 10.4, 10.9 and 10.12.

9.16 Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to the Borrower or its business.

9.17 ISM Code and ISPS Code compliance. The Borrower will procure that each Owner and the Approved Manager obtain all necessary ISM Code Documentation and ISPS Code Documentation in connection with the Ship owned by that Owner and comply with the ISM Code and the ISPS Code.

9.18 No money laundering. Without prejudice to the generality of Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).

10 GENERAL UNDERTAKINGS

10.1 General. The Borrower undertakes with the Lender to comply with the following provisions of this Clause 10 at all times during the Security Period, except as the Lender may otherwise permit.

10.2 Title; negative pledge and pari passu ranking. The Borrower will:

(a) own (directly or indirectly) the entire beneficial interest in each Owner free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and, in the case of the Additional Owner, any Security Interests created by the Commerzbank Loan Agreement and any other document in relation thereto;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and

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(c) procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

10.3 No disposal of assets. The Borrower will not transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.

10.4 Restriction on other liabilities or obligations to be incurred. The Borrower will not incur, and will procure that neither Owner will incur, any liability or obligation except liabilities and obligations:

(a) in the case of the Additional Owner, under the Commerzbank Loan Agreement or any other document in connection thereto;

(b) under the Finance Documents to which each is a party;

(c) (in the case of the Primary Owner), under the MOA and the Initial Charterparty and, in the case of each Owner, incurred in the normal course of its business of owning, operating and chartering its Ship; and

(d) (in the case of the Borrower) incurred in the normal course of its business (which shall include, without limitation, incurring Financial Indebtedness for the financing of the vessels owned by its subsidiaries guaranteeing the obligations of its subsidiaries and all other matters reasonably incidental thereto).

10.5 Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

10.6 Provision of financial statements. The Borrower will send to the Lender:

(a) as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower (commencing with the financial year ended 31 December 2007), the audited consolidated accounts of the Group for that financial year;

(b) as soon as possible, but in no event later than 60 days after the end of each quarterly period in each financial year of the Borrower (commencing with the financial quarter ended on 30 June 2008), the combined unaudited accounts of the Group for that 3- month period certified in each case as to their correctness by the chief financial officer of the Borrower; and

(c) promptly after each request by the Lender, such further financial information about the Borrower, each Owner, the Group and/or each Ship including, but not limited to, charter arrangements, Financial Indebtedness, operating expenses and loan repayment profiles, as the Lender may require.

10.7 Form of financial statements. All accounts (audited and unaudited) delivered under Clause 10.6 will:

(a) be prepared in accordance with all applicable laws and GAAP;

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(b) give a true and fair view of the state of affairs of the Group at the date of those accounts and of its profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Group; and

(d) be accompanied by a certificate signed by a certificate signed by the chief financial officer of the Borrower confirming that, as at the date of the certificate, no Event of Default has occurred and is continuing.

10.8 Shareholder and creditor notices. The Borrower will send the Lender, at the same time as they are despatched, copies of all communications which are despatched to all of the Borrower's shareholders or creditors or any class of them.

10.9 Consents. The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Lender of, all consents required:

(a) for the Borrower and each Owner to perform their respective obligations under any Finance Document to which each is a party;

(b) for the validity or enforceability of any Finance Document;

(c) for each Owner to continue to own and operate its Ship,

and the Borrower will comply (or procure compliance) with the terms of all such consents.

10.10 Maintenance of Security Interests. The Borrower will:

(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

10.11 Notification of litigation. The Borrower will provide the Lender with details of any legal or administrative action involving the Borrower, the Owner, any other Security Party, the Approved Manager, each Ship or the Earnings or the Insurances of each Ship as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of the Finance Documents.

10.12 Principal place of business. The Borrower wilt maintain its place of business, and keep its corporate documents and records, at the address stated at Clause 28.2(a); and the Borrower will not establish, or do anything as a result of which it would be deemed to have a place of business in the United Kingdom or the United States of America.

10.13 Confirmation of no default. The Borrower will, within 2 Business Days after service by the Lender of a written request, serve on the Lender a notice which is signed by an officer or director of the Borrower and which (based on its most recent annual or interim financial statements):

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(a) states that no Event of Default or Potential Event of Default has occurred; or

(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

10.14 Notification of default. The Borrower will notify the Lender as soon as the Borrower becomes aware of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,

and will thereafter keep the Lender fully up-to-date with all developments.

10.15 Provision of further information. The Borrower will, as soon as practicable after receiving the request, provide the Lender with any additional financial or other information relating:

(a) to the Borrower, each Owner, any other member of the Group, each Ship, the Approved Manager or any other Security Party, the Insurances or the Earnings of each Ship; or

(b) to any other matter relevant to, or to any provision of, a Finance Document, which may be requested by the Lender at any time.

10.16 No amendment to MOA or Initial Charterparty. The Borrower will procure that the Primary Owner will not agree to any amendment or supplement to (in the case of the Primary Owner) the MOA or the Initial Charterparty.

10.17 Ownership. The Borrower shall ensure that (a) it shall remain the direct or indirect owner of all of the limited liability company interests in each Owner and (b) there shall be no change in the legal and beneficial ownership of the shares in that Owner.

10.18 General and administrative costs. The Borrower shall ensure that the payment of all the general and administrative costs of the Borrower and each Owner in connection with the ownership and operation of its Ship (including, without limitation, the payment of the management fee pursuant to the Management Agreement to which that Owner is a party) shall be fully subordinated to the payment obligations of the Borrower and each Owner under this Agreement and the other Finance Documents throughout the Security Period.

10.19 Money laundering. Promptly upon the Lender's request the Borrower will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender in order to carry out and be satisfied with the results of all necessary "know your client" or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents and their directors and officers.

11 CORPORATE UNDERTAKINGS

11.1 General. The Borrower also undertakes with the Lender to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Lender may otherwise permit (in the case of Clause 11.7(a) such permission to be in writing).

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11.2 Maintenance of status. The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.

11.3 Negative undertakings. The Borrower will not:

(a) change the nature of its business; or

(b) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrower's share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected;

or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length Provided that this shall not prevent or restrict the Borrower from on-lending the Loan to the Primary Owner;

(c) allow each Owner to open or maintain any account with any bank or financial institution except accounts with the Lender for the purpose of the Finance Documents or, in the case of the Additional Owner, with Commerzbank for the purposes of the Commerzbank Finance Documents;

(d) issue, allot or grant any person a right to any shares in its capital or repurchase (other than through the share repurchase schemes disclosed by the Borrower to the Lender on or prior to the date of this Agreement) or reduce its issued share capital; or

(e) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.

11.4 Subordination of rights of Borrower. All rights which the Borrower at any time has (whether in respect of the Loan or any other transaction) against either Owner or its assets shall be fully subordinated to the rights of the Lender under the Finance Documents; and in particular, the Borrower shall not during the Security Period:

(a) claim, or in a bankruptcy of either Owner or prove for any amount payable to the Borrower by either Owner, whether in respect of the Loan or any other transaction;

(b) take or enforce any Security Interest for any such amount; or

(c) claim to set-off any such amount against any amount payable by the Borrower to either Owner.

11.5 Financial Covenants. The Borrower undertakes that at all times:

(a) the Interest Coverage Ratio shall not be less than 2:1;

(b) (other than during the Waiver Period) the Leverage Ratio shall not be greater than 0.6:1; and

(c) the Borrower will maintain Liquid Funds in an aggregate amount of at least $500,000 per Fleet Vessel.

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11.6 Compliance Check. Compliance with the undertakings contained in Clause 11.5 shall be determined as at each Compliance Date by reference to, in the case of the compliance check as at each of 31 March, 30 June and 30 September in each financial year, the unaudited consolidated accounts of the Group for the financial quarters ending on such date in each financial year delivered by the Lender pursuant to this Agreement and for the compliance check as at 31 December in each financial year, the audited consolidated accounts for that financial year of the Group delivered to the Lender pursuant to this Agreement. At the same time as it delivers those consolidated accounts, the Borrower shall deliver to the Lender a Compliance Certificate signed by the chief financial officer of the Borrower.

11.7 Dividends. The Borrower may:

(a) not pay dividends or make any other form of distribution during the Waiver Period; and

(b) at all other times pay dividends or make any other form of distribution subject to the satisfaction of the following conditions:

(i) the Lender has received a certificate issued by the chief financial officer of the Borrower on the date on which the payment of the dividend is declared which confirms that no Event of Default has occurred which is continuing and that no Event of Default or Potential Event of Default will result from the payment of the dividend or the making of the distribution; and

(ii) the Lender is satisfied that on the date on which the certificate referred to in paragraph (a) is issued, the Security Cover Percentage is equal to at least:

(A) in the case of the period commencing on 28 February 2010 and ending on the first anniversary thereof, 110 per cent.; and

(B) at all times thereafter, 125 per cent.

12 INSURANCE

12.1 General. The Borrower also undertakes with the Lender to procure that each Owner will comply with the following provisions of this Clause 12 at all times during the Security Period except as the Lender may otherwise permit.

12.2 Maintenance of obligatory insurances. The Borrower shall procure that each Owner shall keep its Ship insured at the expense of that Owner against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including protection and indemnity war risks);

(c) in the case of protection and indemnity war risks, in an amount equal to the amount for which the war risks under the hull policies are effected (including, without limitation, protection and indemnity war risks in excess of the amount of war risks (hull));

(d) protection and indemnity risks in excess of the limit of cover for oil pollution liability risks included within the protection and indemnity risks; and

(e) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lender be reasonable for that Owner to insure and which are specified by the Lender by notice to that Owner.

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12.3 Terms of obligatory insurances. The Borrower shall procure that each Owner shall effect such insurances:

(a) in Dollars;

(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) an amount equal to 125 per cent. of the Loan and (ii) the Market Value of the Ship owned by it; and

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

(d) in relation to protection and indemnity risks, in respect of the full value and tonnage of that Ship;

(e) on approved terms; and

(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

12.4 Further protections for the Lender. In addition to the terms set out in Clause 12.3, the Borrower shall procure that the obligatory insurances shall:

(a) name the Lender as sole loss payee with such directions for payment as the Lender may specify;

(b) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;

(c) provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Lender in respect of any rights or interests (secured or not) held by or available to the Lender in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than either Owner or the Lender) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender;

(e) provide that the Lender may make proof of loss if either Owner fails to do so; and

(f) provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Lender, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Lender for 30 days (or 7 days in the case of

29

war risks) after receipt by the Lender of prior written notice from the insurers of such cancellation, change or lapse.

12.5 Renewal of obligatory insurances. The Borrower shall procure that each Owner shall:

(a) at least 21 days before the expiry of any obligatory insurance:

(i) notify the Lender of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Owner proposes to renew that insurance and of the proposed terms of renewal; and

(ii) in case of any substantial change in insurance cover, obtain the Lender's approval to the matters referred to in paragraph (i) above;

(b) at least 14 days before the expiry of any obligatory insurance, renew the insurance in accordance with the Lender's approval pursuant to paragraph (a); and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.

12.6 Copies of policies; letters of undertaking. The Borrower shall procure that each Owner shall ensure that all approved brokers provide the Lender with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters of undertaking in a form required by the Lender and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 12.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause;

(c) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Lender, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender of the terms of the instructions;

(e) they will notify the Lender if any person other than that Owner is named as assured or co-assured in any of the obligatory insurances and shall procure that, upon the written request of the Lender, such additional assured or co-assured executes in favour of the Lender an assignment (in such form as the Lenders may approve or require) of its interest in the obligatory insurances; and

(f) they will not set off against any sum recoverable in respect of a claim relating to that Ship owned by the Owner owning that Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies or, any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts,

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and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Lender.

12.7 Copies of certificates of entry. The Borrower shall procure that each Owner shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provides the Lender with:

(a) a certified copy of the certificate of entry for the Ship owned by it;

(b) a letter or letters of undertaking in such form as may be required by the Lender; and

(c) where required to be issued under the terms of insurance/indemnity provided by that Owner's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Owner in accordance with the requirements of such protection and indemnity association; and

(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship owned by it if applicable.

12.8 Deposit of original policies. The Borrower shall procure that each Owner shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

12.9 Payment of premiums. The Borrower shall procure that each Owner shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Lender.

12.10 Guarantees. The Borrower shall procure that each Owner shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

12.11 Restrictions on employment. The Borrower shall procure that each Owner will not employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances.

12.12 Compliance with terms of insurances. The Borrower shall procure that each Owner shall not do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and, in particular:

(a) that Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 12.7(c) above) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;

(b) the Owner shall not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

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(c) the Owner shall not make all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which its Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) the Owner shall not employ its Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

12.13 Alteration to terms of insurances. The Borrower shall procure that neither Owner shall neither make agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Lender.

12.14 Settlement of claims. The Borrower shall procure that neither Owner shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

12.15 Provision of copies of communications. The Borrower shall procure that each Owner shall provide the Lender, at the time of each such communication, copies of all written communications between each Owner and:

(a) the approved brokers; and

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Owner's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Owner and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

12.16 Provision of information. In addition, the Borrower shall procure that each Owner shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) reasonably requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to adequacy of the obligatory insurances the effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 12.17 below or dealing with or considering any matters relating to any such insurances

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and the Borrower shall, within a reasonable time following the Lender's demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.

12.17 Mortgagee's interest insurances. The Lender shall be entitled from time to time to effect, maintain and renew a mortgage's interest insurance in respect of each Ship in an amount equal to 110 per cent. of the Loan, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing such insurance or dealing with, or considering, any matter arising out of such insurance.

12.18 Review of insurance requirements. The Lender shall be entitled to review the requirements of this Clause 12 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Lender, significant and capable of affecting either Owner or the Ship owned by it and their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which that Owner may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrower.

12.19 Modification of insurance requirements. The Lender shall notify the Borrower of any proposed modification under Clause 1118 to the requirements of this Clause 12 which the Lender, acting up the advice of their insurance consultants considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 12 and shall bind the Borrower accordingly.

12.20 Compliance with mortgagee's instructions. The Lender shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require the Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Lender until the relevant Owner implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 12.19.

13 SHIP COVENANTS

13.1 General. The Borrower also undertakes with the Lender to procure that each Owner shall comply with the following provisions of this Clause 13 at all times during the Security Period except as the Lender may otherwise permit.

13.2 Ship's name and registration. The Borrower shall procure that each Owner shall keep the Ship owned by it registered in its ownership under the Marshall Islands flag; shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.

13.3 Repair and classification. The Borrower shall procure that each Owner shall keep the Ship owned by it in a good and safe condition and state of repair:

(a) consistent with first-class ship ownership and management practice;

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(b) so as to maintain the highest class with Det Norske Veritas (or such other first-class classification society which is a member of IACS acceptable to the Lender) free of overdue recommendations and conditions of such classification society; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the Marshall Islands or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code, the ISPS Code, the ISM Code Documentation and the ISPS Code Documentation.

13.4 Modification. The Borrower shall procure that neither Owner shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on her which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce her value.

13.5 Removal of parts. The Borrower shall procure that neither Owner shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Lender and becomes on installation on that Ship the property of the relevant Owner and subject to the security constituted by the Mortgage relative to the Ship owned by it Provided that each Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.

13.6 Surveys. The Borrower shall procure that each Owner shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender (at the expense of the Borrower) with copies of all survey reports.

13.7 Inspection. The Borrower shall procure that each Owner shall permit the Lender (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. All fees and expenses incurred in relation to the appointment of surveyors shall be for the account of the Borrower.

13.8 Prevention of and release from arrest. The Borrower shall procure that each Owner shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, her Earnings or her Insurances;

(b) all taxes, dues and other amounts charged in respect of the Ship owned by it, her Earnings or her Insurances; and

(c) all other outgoings whatsoever in respect of the Ship owned by it, her Earnings or her Insurances

and, forthwith upon receiving notice of the arrest of the Ship owned by it, or of her detention in exercise or purported exercise of any lien or claim, that Owner shall procure her release by providing bail or otherwise as the circumstances may require.

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13.9 Compliance with laws etc. The Borrower shall procure that each Owner and the Approved Manager shall:

(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by that Owner, its ownership, operation and management or to the business of that Owner;

(b) not employ the Ship owned by it nor allow her employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless that Owner has (at its expense) effected any special, additional or modified insurance cover required for it to enter or trade to any war zone.

13.10 Provision of information. The Borrower shall procure that each Owner shall promptly provide the Lender with any information which the Lender requests regarding:

(a) the Ship owned by it, her employment, position and engagements;

(b) the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;

(d) any towages and salvages;

(e) its compliance or the compliance of the Ship owned by it with the ISM Code and the ISPS Code,

and, upon the Lender's request, provide copies of any current charter relating to the Ship owned by it and of any current charter guarantee, and copies of the ISM Code Documentation and the ISPS Code Documentation.

13.11 Notification of certain events. The Borrower shall procure that each Owner shall immediately notify the Lender by letter of

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

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

(c) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

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

(e) any intended dry docking of that Ship;

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(f) any Environmental Claim made against that Owner or in connection with the Ship owned by it, or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against that Owner, the Approved Manager or otherwise in connection with the Ship owned by it; or

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

and the Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require of each Owner's, the Approved Manager's or any other person's response to any of those events or matters.

13.12 Restrictions on chartering, appointment of managers etc. The Borrower shall procure that neither Owner shall:

(a) let the Ship owned by it on demise charter for any period;

(b) other than, in the case of the Primary Ship, the Initial Charterparty or any Future Charterparty, enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 11 months;

(c) change the terms on which that Ship is employed or the identity of the person by whom the Ship is employed;

(d) enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance;

(e) charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;

(f) appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment;

(g) de-activate or lay up that Ship; or

(h) put that Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed $250,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or her Earnings for the cost of such work or otherwise.

13.13 Notice of Mortgage. The Borrower shall procure that each Owner shall keep the Mortgage applicable to the Ship owned by it registered against that Ship as a valid first or, as the case may be, second preferred mortgage, carry on board that Ship a certified copy of the applicable Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by the relevant Owner to the Lender.

13.14 Sharing of Earnings. The Borrower shall procure that neither Owner shall:

(a) enter into any agreement or arrangement for the sharing of any Earnings of the Ship owned by it;

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(b) enter into any agreement or arrangement for the postponement of any date on which any Earnings of the Ship owned by it are due; the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Owner to any Earnings; or

(c) enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings.

13.15 Charterparty Assignment. If the Primary Owner enters into any Future Charterparty, the Borrower shall, at the request of the Lender, procure that the Primary Owner executes in favour of the Lender a Charterparty Assignment in respect of that Charterparty, and shall deliver to the Lender such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 2, Part A as the Lender may require.

14 SECURITY COVER

14.1 Provision of additional security cover; prepayment of Loan. The Borrower undertakes with the Lender that if at any time after the Waiver Period the Lender notifies the Borrower that:

(a) the aggregate Market Value of the Primary Ship and the Additional Ship (after deducting the Relevant Amount); plus

(b) the net realisable value of any additional security previously provided under this Clause 14,

is below the Relevant Percentage of the Loan, the Borrower will, within 14 days after the date on which the Lender's notice is served, either:

(i) provide, or ensure that a third party provides, additional security which, in the opinion of the Lender, has a net realisable value at least equal to the shortfall and which, if it consists of or includes a Security Interest, covers such asset or assets and is documented in such terms as the Lender may approve or require; or

(ii) prepay in accordance with Clause 7 such part (at least) of the Loan as will eliminate the shortfall.

In this Clause 14.1:

"Relevant Amount" means "E" where:

(i) "A" is the aggregate Market Value of all the Commerzbank Ships at any relevant time;

(ii) "B" is that part of "A" which is required to satisfy the security cover provisions of the Commerzbank Loan Agreement;

(iii) "C" is the amount by which A exceeds B;

(iv) "D"is the Market Value of the Additional Ship expressed as a percentage of the aggregate Market Value of all the Commerzbank Ships; and

(v) "E" is C multiplied by D.

"Relevant Percentage" means:

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(i) for the period commencing on 1 March 2010 and ending on 28 February 2011, 110 per cent.; and

(ii) at all times thereafter, 125 per cent.

14.2 Meaning of additional security. In Clause 14.1 "security"means a Security Interest over an asset or assets (including, without limitation a vessel (other than either Ship)) (whether securing the Borrower's liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit, cash deposit or other security in respect of the Borrower's liabilities under the Finance Documents.

14.3 Requirement for additional documents. The Borrower shall not be deemed to have complied with Clause 14.1 (i) above until the Lender has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 3, 4 and 5 of Schedule 2, Part A and such legal opinions in terms acceptable to the Lender from such lawyers as they may select.

14.4 Valuation of a Ship. The market value of a Ship at any date is that shown by a valuation prepared:

(a) as at a date not more than 15 days previously;

(b) addressed to the Lender;

(c) by an independent ship sale and purchase broker appointed or approved by the Lender;

(d) with or without physical inspection of that Ship (as the Lender may require);

(e) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and

(1) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

14.5 Value of additional security. The net realisable value of any additional security which is provided under Clause 14.1 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 14.4.

14.6 Valuations binding. Any valuation under Clause 14.4 shall be binding and conclusive as regards the Borrower.

14.7 Provision of information. The Borrower shall promptly provide the Lender and any independent ship sale and purchase shipbroker or expert acting under Clause 14.4 with any information which the Lender or the shipbroker or expert may request for the purposes of the valuation of a Ship; and, if the Borrower fails to provide within 3 Business Days following such request, the valuation of that Ship may be made on any basis and assumptions which the independent ship sale and purchase shipbroker or the Lender (or the expert appointed by it) considers prudent.

14.8 Payment of valuation expenses. Without prejudice to the generality of the Borrower's obligations under Clauses 19.2, 19.3 and 20.3, the Borrower shall, on demand, pay the Lender the amount of the fees and expenses of any shipbroker or expert instructed by the Lender under this Clause.

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15 PAYMENTS AND CALCULATIONS

15.6 Currency and method of payments. All payments to be made by the Borrower to the Lender under a Finance Document shall be made to the Lender:

(a) by not later than 11.00 a.m. (Piraeus time) on the due date;

(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Lender shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and

(c) to the account of the Lender at Bank of New York, USA or credit to the account of the Lender (Account No 8033138548), or to such other account with such other bank as the Lender may from time to time notify to the Borrower.

15.7 Payment on non-Business Day. If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

15.8 Basis for calculation of periodic payments. All interest and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

15.9 Lender accounts. The Lender shall maintain an account showing the amounts advanced by the Lender and all other sums owing to the Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

15.10 Accounts prima facie evidence. If the account maintained under Clauses 15.9 shows an amount to be owing by the Borrower or a Security Party to the Lender, that account shall be prima facie evidence that that amount is owing to the Lender.

16 APPLICATION OF RECEIPTS

16.1 Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by the Lender under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Lender under the Finance Documents other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses 19, 20 and 21 of this Agreement or by the Borrower or

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any Security Party under any corresponding or similar provision in any other Finance Document);

(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Lender under the Finance Document but shall have failed to pay or deliver to the Lender at the time of application or distribution under this Clause 16); and

(iii) thirdly, in or towards satisfaction of the Loan;

(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Lender, by notice to the Borrower and the Security Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this Clause 16.1; and

(c) THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

16.2 Variation of order of application. The Lender may, by notice to the Borrower and the Security Parties, provide for a different manner of application from that set out in Clause 16.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

16.3 Notice of variation of order of application. The Lender may give notices under Clause 16.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

16.4 Appropriation rights overridden. This Clause 16 and any notice which the Lender gives under Clause 16.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

17 APPLICATION OF EARNINGS

17.1 Payment of Earnings. The Borrower undertakes with the Lender to ensure that throughout the Security Period (subject only to provisions of each General Assignment), all the Earnings of each Ship are paid to the Earnings Account for that Ship.

17.2 Location of accounts. The Borrower shall promptly:

(a) comply, and ensure that each Owner complies, with any requirement of the Lender (subject in the case of the Earnings Account for the Additional Ship, to the applicable provisions of the Intercreditor Deed and the Commerzbank Finance Documents) as to the location or re-location of the Earnings Account applicable to its Ship; and

(b) execute, and ensure that each Owner executes (in the case of the Additional Owner subject to the applicable provisions of the Intercreditor Deed and the Commerzbank Finance Documents) any documents which the Lender specifies to create or maintain in favour of the Lender a Security Interest over (and/or rights of setoff, consolidation or other rights in relation to) the relevant Earnings Account.

17.3 Interest accrued on Primary Ship Earnings Account. Any credit balance on the Earnings Account relative to the Primary Ship shall bear interest at the rate from time to time offered by the Lender to its customers for Dollar deposits of similar amounts and for

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periods similar to those for which such balances appear to the Lender likely to remain on that Earnings Account.

17.4 Release of accrued interest. In the case of the Earnings Account relative to the Primary Ship, interest accruing under Clause 17.2 shall be freely available to the relevant Owner.

17.5 Debits for expenses etc. The Lender shall be entitled (but not obliged) from time to time to debit the Earnings Account relative to the Primary Ship without prior notice in order to discharge any amount due and payable to it under Clause 19 or 20 or payment of which it has become entitled to demand under Clause 19 or 20.

17.6 Borrower's obligations unaffected. The provisions of this Clause 17 do not affect:

(a) the liability of the Borrower to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrower or any Security Party under any Finance Document.

18 EVENTS OF DEFAULT

18.1 Events of Default. An Event of Default occurs if:

(a) the Borrower or any Security Party fails to pay when due or if so payable on demand, within 2 Business Days of such demand, any sum payable under a Finance Document or under any document relating to a Finance Document unless such failure is due to a bank payment transmission error; or

(b) any breach occurs of Clause 8.2, 10.2, 10.3, 10.16, 10.17, 11.2, 11.3, 11.5, 14.1 or 17.1; or

(c) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b) above if, in the opinion of the Lender, such default is capable of remedy and such default continues unremedied 10 Business Days after written notice from the Lender requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in any Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b) or (c) above); or

(e) any representation, warranty or statement made by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (exceeding, in the case of the Borrower, $1,000,000 (or the equivalent in any other currency), in aggregate:'

(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

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(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

(i) a Relevant Person becomes, in the opinion of the Lender, unable to pay its debts as they fall due; or

(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Lender and effected not later than 3 months after the commencement of the winding up; or

(v) a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person; or

(vi) a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or

(vii) any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi) above; or

(viii) in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Lender, is similar to any of the foregoing; or

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(h) the Borrower or any Security Party ceases or suspends carrying on or changes the nature of its business or a part of its business which, in the opinion of the Lender, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Lender considers material under a Finance Document; or

(ii) for the Lender to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(j) any consent necessary to enable each Owner to own, operate or charter the Ship owned by it or to enable the Borrower or any Security Party to comply with any provision which the Lender considers material of a Finance Document or the MOA is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(k) without the prior consent of the Lender, Mr. Prokopios Tsirigakis ceases to be, at any time during the Security Period, the Chief Executive Officer of the Borrower; or

(1) the shares of the Borrower cease to be quoted on the Nasdaq National Market in New York or any other international recognised stock exchange acceptable to the Lender; or

(m) without the prior written consent or the Lender, a change has occurred after the date of this Agreement in the ownership of any of the shares in the Owner or in the ultimate control of the voting rights attaching to any of those shares; or

(n) the Initial Charterparty is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender or by effluxion of time unless a replacement charter in all respects acceptable to the Lender, to be made between the Primary Owner and a charterer acceptable to the Lender, is effected within 60 days of the cancellation or termination of the Initial Charterparty or the date on which the Initial Charterparty ceases to remain in full force and effect or being negotiated; or

(o) any provision which the Lender considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(p) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(q) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of the Borrower or any Security Party; or

(ii) any accident or other event involving either Ship or another vessel owned, chartered or operated by a Relevant Person;

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in the light of which the Lender considers that there is a significant risk that the Borrower or any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due.

18.2 Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default the Lender may:

(a) serve on the Borrower a notice stating that the commitment and all obligations of the Lender to the Borrower under this Agreement are terminated; and/or

(b) serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

(c) take any other action which, as a result of the Event of Default or any notice served under paragraph (a) or (b) above, the Lender is entitled to take under any Finance Document or any applicable law.

18.3 Termination of Commitment. On the service of a notice under Clause 18.2(a) the Commitment, and all other obligations of the Lender to the Borrower under this Agreement, shall terminate.

18.4 Acceleration of Loan. On the service of a notice under Clause 18.2(b), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

18.5 Multiple notices; action without notice. The Lender may serve notices Clauses 18.2(a) and (b) simultaneously or on different dates and it may take any action referred to in Clause 18.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

18.6 Exclusion of Lender liability. Neither the Lender nor any receiver or manager appointed by the Lender, shall have any liability to the Borrower or a Security Party:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset, except that this does not exempt the Lender or a receiver or manager from liability for losses shown to have been caused by the gross negligence or the wilful misconduct of the Lender's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

18.7 Relevant Persons. In this Clause 18 a "Relevant Person"means the Borrower, any Security Party and any other member of the Group; but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

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18.8 Interpretation. In Clause 18.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 18.1(g) "petition"includes an application.

19 FEES AND EXPENSES

19.1 Arrangement fee. The Borrower shall pay on the date of this Agreement to the Lender a non-refundable arrangement fee of $140,000 (representing 0.4 per cent. of the Commitment).

19.2 Costs of negotiation, preparation etc. The Borrower shall pay to the Lender on its demand the amount of all expenses incurred by the Lender in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document (including, without limitation, any legal fees or expenses incurred by the Lender with).

19.3 Costs of variations, amendments, enforcement etc. The Borrower shall pay to the Lender, on the Lender's demand, the amount of all expenses (including without limitation any legal fees or expenses) incurred by the Lender in connection with:

(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(b) any consent or waiver by the Lender concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

(c) the valuation of any security provided or offered under Clause 14 or any other matter relating to such security; or

(d) such circumstances where the Lender, in its absolute opinion, considers that there has been a material change to the insurances in respect of either Ship, the review of the insurances of either Ship pursuant to Clause 12.18;

(e) any step taken by the Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

19.4 Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Lender's demand, fully indemnify the Lender against any liabilities and expenses resulting from any failure or delay by the Borrower to pay such a tax.

19.5 Certification of amounts. A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 19 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

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20 INDEMNITIES

20.1 Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify the Lender on its demand in respect of all expenses, liabilities and losses which are incurred by the Lender, or which the Lender reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender;

(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 6);

(d) the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 18,

and in respect of any tax (other than tax on its overall net income) for which the Lender is liable in connection with any amount paid or payable to the Lender (whether for its own account or otherwise) under any Finance Document.

20.2 Breakage costs. Without limiting its generality, Clause 20.1 covers any liability or loss, including a loss of a prospective profit, incurred by the Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which includes the Loan or any overdue amount); and

(b) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender) to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.

20.3 Miscellaneous indemnities. The Borrower shall fully indemnify the Lender on its demand in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses or every king ("liability items") which may be made or brought against or incurred by the Lender, in any country, in relation to:

(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Lender or by any receiver appointed under a Finance Document;

(b) any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document,

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the

46

Lender.

Without prejudice to its generality, this Clause 20.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

20.4 Currency indemnity. If any sum due from the Borrower or any Security Party to the Lender under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency")into another currency (the "Payment Currency")for the purpose of:

(a) making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment,

the Borrower shall indemnify the Lender against the loss arising when the amount of the payment actually received by the Lender is converted at the available rate of exchange into the Contractual Currency.

In this Clause 20.4, the "available rate of exchange"means the rate at which the Lender is able at the opening of business (Piraeus time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 20.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

20.5 Certification of amounts. A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

21 NO SET-OFF OR TAX DEDUCTION

21.1 No deductions. All amounts due from the Borrower under a Finance Document shall be paid:

(a) without any form of set-off, cross-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

21.2 Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any payment:

(a) the Borrower shall notify the Lender as soon as it becomes aware of the requirement;

(b) the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

47

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Lender receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

21.3 Evidence of payment of taxes. Within one month after making any tax deduction, the Borrower shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had been paid to the appropriate taxation authority.

21.4 Exclusion of tax on overall net income. In this Clause 21 "tax deduction"means any deduction or withholding for or on account of any present or future tax except tax on the Lender's overall net income.

22 ILLEGALITY, ETC

22.1 Illegality. This Clause 22 applies if the Lender notifies the Borrower that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation,

for the Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

22.2 Notification and effect of illegality. On the Lender notifying the Borrower under Clause 22.1, the Commitment shall terminate; and thereupon or, if later, on the date specified in the Lender's notice under Clause 22.1 as the date on which the notified event would become effective the Borrower shall prepay the Loan in full in accordance with Clause 7.

22.3 Mitigation. If circumstances arise which would result in a notification under Clause 22.1 then, without in any way limiting the rights of the Lender under Clause 22.3, the Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a) have an adverse effect on its business, operations or financial condition; or

(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

23 INCREASED COSTS

23.1 Increased costs. This Clause 23 applies if the Lender notifies the Borrower that it considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied

48

(disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement (including, without limitation, any laws or regulations which shall replace, amend and/or supplement those set out in the statement of the Basle Committee on Banking Regulations and Supervisory Practices dated July 1988 and entitled "International Convergence of Capital Management and Capital Structures")) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,

the Lender (or a parent company of it) has incurred or will incur an "increased cost".

23.2 Meaning of "increased cost". In this Clause 23, "increased cost" means:

(a) an additional or increased cost incurred as a result of, or in connection with, the Lender having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement, of funding or maintaining the Commitment or performing its obligations under this Agreement, or of having outstanding all or any part of the Loan or other unpaid sums; or

(b) a reduction in the amount of any payment to the Lender under this Agreement or in the effective return which such a payment represents to the Lender or on its capital;

(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Loan or (as the case may require) the proportion of that cost attributable to the Loan; or

(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Lender under this Agreement;

but not an item attributable to a change in the rate of tax on the overall net income of the Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 20.1 or by Clause 21.

For the purposes of this Clause 23.2 the Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

23.3 Payment of increased costs. The Borrower shall pay to the Lender, on its demand, the amounts which the Lender from time to time notifies the Borrower that it has specified to be necessary to compensate it for the increased cost.

23.4 Notice of prepayment. If the Borrower is not willing to continue to compensate the Lender for the increased cost under Clause 23.3, the Borrower may give the Lender not less than 14 days' notice of its intention to prepay the Loan at the end of an Interest Period.

23.5 Prepayment. A notice under Clause 23.4 shall be irrevocable; and on the date specified in the Borrower's notice of intended prepayment, the Commitment shall terminate and the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin.

49

23.6 Application of prepayment. Clause 7 shall apply in relation to the prepayment.

24 SET-OFF

24.1 Application of credit balances. The Lender may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of the Lender in or towards satisfaction of any sum then due from the Borrower to the Lender under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of; all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate,

24.2 Existing rights unaffected. The Lender shall not be obliged to exercise any of its rights under Clause 24.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is entitled (whether under the general law or any document).

24.3 No Security Interest. This Clause 24 gives the Lender a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

25 TRANSFERS AND CHANGES IN LENDING OFFICE

25.1 Transfer by Borrower. The Borrower may not, without the consent of the Lender, transfer any of its rights or obligations under any Finance Document.

25.2 Assignment by Lender. The Lender may assign all or any of the rights and interests which it has under or by virtue of the Finance Documents to another bank or financial institution.

25.3 Rights of assignee. In respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document, or any misrepresentation made in or in connection with a Finance Document, a direct or indirect assignee of any of the Lender's rights or interests under or by virtue of the Finance Documents shall be entitled to recover damages by reference to the loss incurred by that assignee as a result of the breach or misrepresentation irrespective of whether the Lender would have incurred a loss of that kind or amount.

25.4 Sub-participation; subrogation assignment. The Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower; and the Lender may assign, in any manner and terms agreed by it, all or any part of those rights to an insurer or surety who has become subrogated to them.

50

25.5 Disclosure of information. The Lender may disclose to a potential assignee or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

25.6 Change of lending office. The Lender may change its lending office by giving notice to the Borrower and the change shall become effective on the later of:

(a) the date on which the Borrower receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26 VARIATIONS AND WAIVERS

26.1 Variations, waivers etc. by Lender. A document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or the Lender's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower and the Lender and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

26.2 Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clause 26.1, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Lender (or any person acting on its behalf) shall result in the Lender (or any person acting on its behalf) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

27 NOTICES

27.1 General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by registered letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

27.2 Addresses for communications. A notice shall be sent:

(a) to the Borrower: 7 Fragoklissias Avenue 151 25 Marousi Athens, Greece

51

		Fax No: +30 210 61 78 278 Attn: the Chief Financial Officer
(b)	to the Lender:	Piraeus Bank A.E. 47-49 Alai Miaouli 185 36 Piraeus Greece
		Fax No: +30 210 42 9 2601 Attn: Relationship Manager

or to such other address as the relevant party may notify the other.

27.3 Effective date of notices. Subject to Clauses 27.4 and 27.5:

(a) a notice which is delivered personally shall be deemed to be served, and shall take effect, at the time when it is delivered; and

(b) a notice which is delivered by registered letter shall be deemed to be served, and shall take effect, 5 Business Days after being deposited in the post postage prepaid in an envelope addressed to it at the relevant address; and

(c) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

27.4 Service outside business hours. However, if under Clause 27.3 a notice would be deemed to be served:

(a) on a day which is not a Business Day in the place of receipt; or

(b) on such a Business Day, but after 5 p.m. local time,

the notice shall (subject to Clause 27.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

27.5 Illegible notices. Clauses 27.3 and 27.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

27.6 Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

52

27.7 English language. Any notice under or in connection with a Finance Document shall be in English.

27.8 Meaning of "notice". In this Clause 28 "notice"includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

28 SUPPLEMENTAL

28.1 Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to the Lender are:

(a) cumulative;

(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

28.2 Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

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

28.4 Counterparts. A Finance Document may be executed in any number of counterparts.

29 LAW AND JURISDICTION

29.1 English law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

29.2 Exclusive English jurisdiction. Subject to Clause 29.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

29.3 Choice of forum for the exclusive benefit of the Creditor Parties. Clause 29.2 is for the exclusive benefit of the Lender which reserves the right:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

29.4 Process agent. The Borrower irrevocably appoints Eurofin International Ltd. at its registered office for the time being, presently at Chelsea Harbour, London SWIO OXD, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

53

29.5 Lender's rights unaffected. Nothing in this Clause 29 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

29.6 Meaning of "proceedings". In this Clause 29, "proceedings"means proceedings of any kind, including an application for a provisional or protective measure and a "Dispute"means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

54

SCHEDULE 1

DRAWDOVVN NOTICE

To: Piraeus Bank A.E.

47-49 Akti Miaouli

185 36 Piraeus

Greece

Attention: Loans Administration                                                                                                                                                           June 2008

DRAWDOWN NOTICE

2 We refer to the loan agreement (the "Loan Agreement")dated          June 2008 and made between us, as Borrower, and you, as Lender, in connection with a loan facility of up to US$35,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

3 We request to borrow the Loan as follows:

(a) Amount : $[•];

(b) Drawdown Date: [•] 2008;

(c) Duration of the first Interest Period: [•] months;

(d) Payment instructions : [                                 ].

4 We represent and warrant that:

(a) the representations and warranties in Clause 9 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;

(b) no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.

5 This notice cannot be revoked without the prior consent of the Lender.

6 [We authorise you to deduct the arrangement fee referred to in Clause 19.1 from the amount of the Loan].

for and on behalf of

STAR BULK CARRIERS CORP.

55

SCHEDULE 2

CONDITION PRECEDENT DOCUMENTS

Part A

The following are the documents referred to in Clause 8.1(a).

1 A duly executed original:

(a) this Agreement;

(b) the Guarantee; and

(c) the Accunt Pledge.

2 Copies of the certificate of incorporation and constitutional documents of the Borrower and the Owner.

3 Copies of resolutions of the directors of the Borrower and of the directors and shareholders of the Owner authorising the execution of each of the Finance Documents to which the Borrower or the Owner (as the case may be) is a party and, in the case of the Borrower, authorising named officers to give the Drawdown Notice and other notices under this Agreement.

4 The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower and the Owner.

5 Copies of all consents which the Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document to which it is a party and, in the case of the Owner, the MOA.

6 The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account.

7 Evidence satisfactory to the Lender that each Owner is a direct or indirect wholly-owned subsidiary of the Borrower.

8 A copy of the MOA and of all documents signed or issued by the Owner or the Seller (or either of them) under or in connection with the MOA.

9 Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution by the Seller of the MOA and of all documents to be executed by the Seller under the MOA.

10 All documentation required by the Lender in relation to the Borrower and any Security Party pursuant to the Lender's "know your customer" requirements.

11 Documentary evidence that the agent for service of process named in Clause 28.4 has accepted its appointment.

56

12 Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Lender may require.

13 If the Lender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Lender.

57

PART B

The following are the documents referred to in Clause 8.1(b).

1 A copy of the Initial Charterparty (showing a net charter rate of not less than (i) $53,454 per day until 1 March 2009 (ii) $40,067 per day for the 12-month period commencing on 1 March 2009 and (iii) $26,575 per day for the 12-month period commencing on 1 March 2010) and of all documents signed or issued by the parties thereto under or in connection with the Initial Charterparty.

2 A duly executed original of the Mortgage, the Deed of Covenant, the General Assignment, the Account Pledge and (if applicable) any Charter Assignment for the Primary Ship (and of each document to be delivered under each of them).

3 Documentary evidence that:

(a) the Primary Ship has been unconditionally delivered to, and accepted by, the Primary Owner under the MOA and the full purchase price payable under the MOA (in addition to the part financed by the Loan) has been duly paid, together with a copy of the bill of sale and the other documents delivered by the Seller thereunder;

(b) the Primary Ship is definitively and permanently registered in the name of the Primary Owner under the Marshall Islands flag;

(c) the Primary Ship is in the absolute and unencumbered ownership of the Primary Owner save as contemplated by the Finance Documents;

(d) the Ship maintains the highest available class with Det Norske Veritas (or such other first-class classification society which is a member of IACS as the Lender may approve) free of all overdue recommendations and conditions of such classification society;

(e) the Mortgage has been duly registered against the Primary Ship as a valid first preferred ship mortgage in accordance with the laws of the Marshall Islands; and

(f) the Primary Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.

4 A copy of the Management Agreement and a duly executed original of the Manager's Undertaking in relation to the Primary Ship.

5 Copies of:

(a) the document of compliance (DOC) and safety management certificate (SMC) referred to

in paragraph (a) of the definition of the ISM Code Documentation in respect of the Primary Ship and the Approved Manager certified as true and in effect by the Primary Owner; and

(b) the ISPS Code Documentation in respect of the Primary Ship and the Primary Owner certified as true and in effect by the Primary Owner.

6 A valuation (at the cost of the Borrower) of the Primary Ship prepared by an independent ship broker appointed or approved by the Lender, addressed to the Lender, stated to be for the purpose of this Agreement and dated not earlier than 15 days before the Drawdown Date showing the Market Value of the Primary Ship in an amount satisfactory to the Lender.

58

7 A favourable legal opinion from lawyers appointed by the Lender on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Lender may require.

8 A favourable opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the insurances for the Primary Ship as the Lender may require.

9 If the Lender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Lender.

Every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or any other person acceptable to the Lender in its sole discretion.

59

SCHEDULE 3

FORM OF COMPLIANCE CERTIFICATE

To: Piraeus Bank A.E.

47-49 Akti Miaouli

18536 Piraeus

Greece

[•] 200[•]

Dear Sirs,

We refer to a loan agreement dated [•] 2008 (the "Loan Agreement")made between (amongst others) yourselves and ourselves in relation to a term loan facility of up to $35,000,000.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.

We enclose with this certificate a copy of the [audited]/[unaudited] consolidated accounts for the Group for the [financial year] [3-month period] ended [•]. The accounts (i) have been prepared in accordance with all applicable laws and GAAP all consistently applied, (ii) give a true and fair view of the state of affairs of the Group at the date of the accounts and of its profit for the period to which the accounts relate and (iii) fully disclose or provide for all significant liabilities of the Group.

We also enclose copies of the valuations of all the Fleet Vessels which were used for the purpose of calculating the Leverage Ratio as at [•].

The Borrower represents that no Event of Default or Potential Event of Default has occurred as at the date of this certificate [except for the following matter or event [set out all material details of matter or event]]. In addition as of [•], the Borrower confirms compliance with the financial covenants set out in Clause 11.5 of the Loan Agreement for the 3 months ending as of the date to which the enclosed accounts are prepared.

We now certify that, as at [•]:

(a) the Interest Coverage Ratio is [•]:[•];

(b) the Leverage Ratio is [•]:[•]; and

(b) the Liquid Funds are $[•], representing $[•] per Fleet Vessel,

as shown in the attached calculation sheets.

This certificate shall be governed by, and construed in accordance with, English law.

_____________________________

[•]

Chief Financial Officer of

STAR BULK CARRIERS CORP.

60

EXECUTION PAGE

BORROWER
SIGNED by GRORGE SYLLANTAVOS	)
for and on behalf of	)           /s/ GRORGE SYLLANTAVOS
STAR BULK CARRIERS CORP.	)

CHRISOFOROS BISMPIKOS

SOLICITOR

Watson, Farley & Williams

2, DEETEKAS MERARCHIAS

PIRAEUS 185 36 – GREECE

/s/ CHRISOFOROS BISMPIKOS

LENDER
SIGNED by	)
for and on behalf of	)
PIRAEUS BANK A.E.	)

CHRISOFOROS BISMPIKOS

SOLICITOR

Watson, Farley & Williams

2, DEETEKAS MERARCHIAS

PIRAEUS 185 36 – GREECE

/s/ CHRISOFOROS BISMPIKOS

SK 25767 0001 1183565

61

EX-4.13

Exhibit 4.13

Dated 29 September 2010

STAR BULK CARRIERS CORP.

as Borrower

-and-

STAR COSMO LLC

as Owner

-and-

PIRAEUS BANK A.E.

as Lender

______________________________

FIRST SUPPLEMENTAL AGREEMENT

______________________________

in relation to a Loan Agreement dated 1 July 2008

(as amended and restated by an amending and restating agreement

dated 25 May 2009 and as amended and supplemented

by a supplemental letter dated 23 July 2009) in respect of a loan facility of (originally)

US$35,000,000 of which the current outstandings aggregate US$23,250,000

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	DEFINITIONS	1
2	REPRESENTATIONS AND WARRANTIES	2
3	LENDER’S AGREEMENT	3
4	CONDITIONS	3
5	VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS	4
6	CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS	6
7	EXPENSES	6
8	COMMUNICATIONS	6
9	SUPPLEMENTAL	6
10	LAW AND JURISDICTION	6
EXECUTION PAGE		8

THIS FIRST SUPPLEMENTAL AGREEMENT is dated 29th ,September 2010 and made

BETWEEN:

(1) STAR BULK CARRIERS CORP.,a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) STAR COSMO LLC,a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands (the "Owner"); and

(3) PIRAEUS BANK A.E. acting through its office at 47-49 Akti Miaouli, Piraeus, Greece, as Lender.

BACKGROUND

(A) By a loan agreement dated 1 July 2008 (as amended and restated by an amending and restating agreement dated 25 May 2009 and as amended and supplemented by a supplemental letter dated 23 July 2009, the "Loan Agreement")made between (i) the Borrower as borrower and (ii) the Lender as lender, it was agreed that the Lender would make available to the Borrower a loan facility of (originally) up to US$35,000,000 (the "Loan")of which the current principal outstandings aggregate US$23,250,000.

(B) The Borrower has requested that the Lender agrees to:

(i) the release (the "First Release")to the Borrower the amount of US$5,000,000 which was credited to an account held with, and pledged, pursuant to a pledge agreement dated 10 June 2009, in favour of, the Lender for the purpose of providing the Lender with additional security pursuant to clause 14.1(b)(i) of the Loan Agreement; and

(ii) the release (the "Second Release"and, together, with the "First Release",the "Releases"and each a "Release") of Star Alpha LLC ("Star A")from its obligations under a guarantee dated 25 May 2009 executed by Star A in favour of the Lender as security for the Borrower’s obligations under (inter alia) the Loan Agreement; and

(C) This First Supplemental Agreement sets out the terms and conditions on which the Lender agrees to each Release.

NOW THEREFORE IT IS HEREBY AGREED

1. DEFINITIONS

1.1 Defined Expressions. Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this First Supplemental Agreement.

1.2 Definitions. In this First Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:

"Effective Date"means the date on which the conditions precedent in Clause 4 are satisfied; and

"Second Mortgage Addendum"means the second addendum to the Mortgage on "STAR COSMO", executed or to be executed by the Owner in favour of the Lender in such form as the Lender may approve or require.

1.3 Construction of certain terms. Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this First Supplemental Agreement. References to Clauses are to clauses of this First Supplemental Agreement save as may be otherwise expressly provided in this First Supplemental Agreement.

2. REPRESENTATIONS AND WARRANTIES

2.1 Repetition of Loan Agreement representations and warranties. TheBorrower hereby represents and warrants to the Lender, as at the date of this First Supplemental Agreement, that the representations and warranties set forth in Clause 9 of the Loan Agreement (updated mutatis mutandis to the date of this First Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this First Supplemental Agreement.

2.2 Repetition of Guarantee representations and warranties. The Owner hereby represents and warrants to the Lender, as at the date of this First Supplemental Agreement, that the representations and warranties set forth in Clause 10 of the Guarantee to which it is a party (updated mutatis mutandis to the date of this First Supplemental Agreement) are true and correct as if all references therein to "this Guarantee" were references to that Guarantee as further amended by this First Supplemental Agreement.

2.3 Further representations and warranties. The Borrower and the Owner hereby further represents and warrants to the Lender that as at the date of this First Supplemental Agreement:

(a) in the case of:

(i) the Owner is duly formed and validly existing and in good standing; and

(ii) the Borrower is duly incorporated and validly existing and in good standing,

in each case, under the laws of the Marshall Islands and each has full power to enter into and perform its obligations under this First Supplemental Agreement or, in the case of the Owner, the Second Mortgage Addendum and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this First Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement (in the case of the Owner including, but not limited to, and the Second Mortgage Addendum) and the other Finance Documents as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this First Supplemental Agreement and so long as any moneys are owing under

2

any of the Finance Documents and/or the Second Mortgage Addendum and while all or any part of the Commitment remains outstanding;

(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this First Supplemental Agreement and, in the case of the Owner, the Second Mortgage Addendum and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this First Supplemental Agreement and all such other documents as contemplated hereby (in the case of the Owner including, but not limited to, and the Second Mortgage Addendum) does not and will not, from the date of this First Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or the Owner or on any of their property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents) on any of such property or assets; and

(e) it has fully disclosed in writing to the Lender all facts which it knows or which it should reasonably know and which are material for disclosure to the Lender in the context of this First Supplemental Agreement and all information furnished by the Borrower or the Owner or on their behalf relating to its business and affairs in connection with this First Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.

3. LENDER'S AGREEMENT

3.1 Agreement of the Lenders. The Lender, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this First Supplemental Agreement, hereby agrees with the Borrower, subject to and upon the terms and conditions of this First Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to each Release.

3.2 The Borrower and the Owner agree and confirm that the Loan Agreement and the Finance Documents to which each is a party shall remain in full force and effect and each of the Borrower and the Owner shall remain liable under the Loan Agreement and the Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder.

3.3 The agreement of the Lender contained in Clauses 3.1 and 3.2 shall have effect on and from the Effective Date.

4. CONDITIONS

4.1 Conditions precedent. The agreements of the Lender contained in Clause 3.1 of this First Supplemental Agreement shall all be expressly subject to the condition that the Lender shall have received in form and substance satisfactory to it and its legal advisers on or before on or before the Effective Date:

(a) evidence that the persons executing this First Supplemental Agreement on behalf of the Borrower and the Owner are duly authorised to execute the same;

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(b) true and complete copy of the resolutions passed at a meeting of the directors of the Borrower authorising and approving the execution of this First Supplemental Agreement and any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on its behalf;

(c) true and complete copies of the resolutions passed at separate meetings of the sole director and shareholder of the Owner authorising and approving the execution of the First Supplemental Agreement, the Second Mortgage Addendum and any other document or action to which each is or is to be a party and authorising its sole director or other representatives to execute the same on its behalf;

(d) the original of any power of attorney issued by the Borrower and Owner pursuant to such resolutions aforesaid;

(e) the Second Mortgage Addendum has been duly executed by the Owner together with evidence that the Second Mortgage Addendum has been duly registered in accordance with the laws of the Marshall Islands;

(f) evidence that the Borrower has made a prepayment of the Loan in an amount equal to $2,000,000;

(g) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this First Supplemental Agreement and the Second Mortgage Addendum (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Lender deems appropriate;

(h) such legal opinions as the Lender may require in respect of the matters contained in this First Supplemental Agreement and the Second Mortgage Addendum; and

(i) evidence that the agent referred to in clause 29.4 of the Loan Agreement has accepted its appointment as agent for service of process under this First Supplemental Agreement.

5. VARIATIONS TO LOAN AGREEMENT AND FINANCE DOCUMENTS

5.1 Specific amendments to Loan Agreement. In consideration of the agreements of the Lender contained in Clause 3.1 of this First Supplemental Agreement, the Borrower hereby agrees with the Lender that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

(a) by inserting in clause 1.1 thereof the definition of "Second Mortgage Addendum" set out in Clause 1.2;

(b) by deleting the definitions of "Additional Owner" and "Additional Ship" in clause 1.1 thereof and construing:

(i) all other definitions in which there is a reference to the "Additional Owner" and "Additional Ship" accordingly; and

(ii) all references to an "Owner" and "Ship" to refer solely to the "Primary Owner" and "Primary Ship" respectively;

(c) the definition of, and references throughout each of the Finance Documents to, the Mortgage relevant to "STAR COSMO" and shall be construed as if the same

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referred to that Mortgage as amended and supplemented by the Second Mortgage Addendum;

(d) by deleting the definition of "Margin" in clause 1.1 thereof and replacing it with the following new definition:

""Margin" means:

(a) in relation to the period commencing from (and including) 1 August 2010 and ending on (and including) 31 December 2011, 3 per cent. per annum; and

(b) at all times thereafter, 2.5 per cent. per annum;";

(e) by adding the words "and in the Second Mortgage Addendum" after the words "Mortgage Addendum" in the second line of sub-paragraph (a) of the definition of "Mortgage" in clause 1.1 thereof,

(f) by deleting clauses 7.1 and 7.2 thereof in their entirety and replacing them with the following new clauses:

"7.1 Repayment instalments. Save as previously repaid or prepaid, the Borrower shall repay the Loan by:

(a) 16 consecutive three-monthly instalments of (i) in the case of the first to fourth instalments (inclusive), $800,000 each and (ii) in the case of the fifth to sixteenth instalments (inclusive), $457,000 each; and

(b) a balloon payment in the amount of $12,566,000 (the "Balloon Instalment").

"7.2 Repayment Dates. The first repayment instalment referred to in Clause 7.1 shall be repaid on I October 2010, each subsequent repayment instalment shall be repaid at 3-monthly intervals thereafter and the last instalment shall be repaid, together with the Balloon Instalment, on 1 July 2014.";

(g) by deleting the words "if at any time after the Waiver Period" in the first line of clause 14.1 thereof;

(h) by deleting the words "Relevant Percentage" in the seventh line of clause 14.1 thereof and replacing them with the figures words "125 per cent.";

(i) by deleting the definition of "Relevant Percentage" in clause 14.1 thereof;

(j) by construing all references therein to "this Agreement" where the context admits as being references to "this Agreement as the same is amended and supplemented by this First Supplemental Agreement and as the same may from time to time be further supplemented and/or amended"; and

(k) by construing references to each of the Finance Documents as being references to each such document as it is from time to time supplemented and/or amended.

5.2 Amendments to Finance Documents. With effect on and from the Effective Date each of the Finance Documents other than the Loan Agreement shall be, and shall be deemed by this First Supplemental Agreement to have been, amended as follows:

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(a) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this First Supplemental Agreement; and

(b) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this First Supplemental Agreement.

5.3 Finance Documents to remain in full force and effect. The Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this First Supplemental Agreement.

6. CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS

6.1 General. Save for the alterations to the Loan Agreement and the other Finance Documents made or to be made pursuant to this First Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this First Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the other Finance Documents shall continue and remain valid and enforceable.

7. EXPENSES

7.1 Fees and expenses. The provisions of clause 19 (fees and expenses) of the Loan Agreement shall apply to this First Supplemental Agreement as if they were expressly incorporated in this First Supplemental Agreement with any necessary amendments.

8. COMMUNICATIONS

8.1 General. The provisions of clause 27 (notices) of the Loan Agreement, as amended and supplemented by this First Supplemental Agreement, shall apply to this First Supplemental Agreement as if they were expressly incorporated in this First Supplemental Agreement with any necessary modifications.

9. SUPPLEMENTAL

9.1 Counterparts. This First Supplemental Agreement may be executed in any number of counterparts.

9.2 Third Party rights. A person who is not a party to this First Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this First Supplemental Agreement.

10. LAW AND JURISDICTION

10.1 Governing law. This First Supplemental Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.

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10.2 Incorporation of the Loan Agreement provisions. The provisions of clause 29 (law and jurisdiction) of the Loan Agreement, as amended and supplemented by this First Supplemental Agreement, shall apply to this First Supplemental Agreement as if they were expressly incorporated in this First Supplemental Agreement with any necessary medications.

IN WITNESS WHEREOF the parties hereto have caused this First Supplemental Agreement to be duly executed the day and year first above written.

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EXECUTION PAGE

BORROWER
SIGNED by Georgia Mastarakis	)
for and on behalf of	)	/s/ Georgia Mastarakis
STAR BULK CARRIERS CORP.	)
OWNER
SIGNED by Georgia Mastarakis	)
for and on behalf of	)	/s/ Georgia Mastarakis
STAR COSMO LLC	)
LENDER
SIGNED by Jason Dallas and Krikor Janikian	)
for and on behalf of	)	/s/ Jason Dallas / Krikor Janikian
PIRAEUS BANK A.E.	)

Witness to all the	)
above signatures	)

Name:	CHRISOFOROS BISMPIKOS
	SOLICITOR
Address:	Watson, Farley & Williams
	PIRAEUS 185 36 – GREECE
	/s/ CHRISOFOROS BISMPIKOS

SK 25767 0001 1183622

8

EX-4.18

Exhibit 4.18

Date 3 September 2010

STAR BULK CARRIERS CORP.

as Borrower

- and -

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

- and -

COMMERZBANK AG

as Agent and as Security Trustee

- and -

COMMERZBANK AG

as Swap Bank

______________________________

LOAN AGREEMENT

_______________________________

relating to a term loan facility of up to US$26,000,000

to finance part of the purchase price of a Capesize bulk carrier

named "NORD-KRAFT" (tbr "STAR AURORA")

WATSON FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	INTERPRETATION	1
2	FACILITY	18
3	POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS	18
4	DRAWDOWN	19
5	INTEREST	20
6	INTEREST PERIODS	21
7	DEFAULT INTEREST	22
8	REPAYMENT AND PREPAYMENT	23
9	CONDITIONS PRECEDENT	25
10	REPRESENTATIONS AND WARRANTIES	26
11	GENERAL UNDERTAKINGS	28
12	CORPORATE UNDERTAKINGS	32
13	INSURANCE	33
14	SHIP COVENANTS	38
15	SECURITY COVER	42
16	PAYMENTS AND CALCULATIONS	43
17	APPLICATION OF RECEIPTS	45
18	APPLICATION OF EARNINGS	46
19	EVENTS OF DEFAULT	47
20	FEES AND EXPENSES	51
21	INDEMNITIES	52
22	NO SET-OFF OR TAX DEDUCTION	54
23	ILLEGALITY, ETC	54
24	INCREASED COSTS	55
25	SET-OFF	56
26	TRANSFERS AND CHANGES IN LENDING OFFICES	57
27	VARIATIONS AND WAIVERS	59
28	NOTICES	60
29	SUPPLEMENTAL	62
30	LAW AND JURISDICTION	63

SCHEDULE 1 LENDERS AND COMMITMENTS	64
SCHEDULE 2 DETAILS OF CHARTERPARTIES	65
SCHEDULE 3 DRAWDOWN NOTICE	66
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS	67
SCHEDULE 5 TRANSFER CERTIFICATE	70
SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE	74
EXECUTION PAGE	75

THIS LOAN AGREEMENT is made on 3 September 2010

BETWEEN:

(1) STAR BULK CARRIERS CORP., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960 as Borrower;

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

(3) COMMERZBANK AG acting through its office at DomstraBe 18, 20095 Hamburg Germany, as Agent;

(4) COMMERZBANK AG acting through its office at DomstraBe 18, 20095 Hamburg Germany, as Security Trustee; and

(5) COMMERZBANK AG acting through its office at Kaiserstrasse 16, 60621 Frankfurt am Main, Germany, as Swap Bank.

WHEREAS:

(A) The Lenders have agreed to make available to the Borrower a term loan facility in an amount of up to the lesser of (a) $26,000,000 and (b) 60 per cent. of the Initial Market Value of "AURORA" which shall be made available to Borrower and on lent to Star A for the purpose of financing part of the acquisition cost of that Ship.

(B) The Swap Bank has agreed to enter into interest rate swap transactions with the Borrower from time to time to hedge, at the Borrower's request, the Borrower's exposure under this Agreement to interest rate fluctuations.

(C) The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Definitions. Subject to Clause 1.5 in this Agreement:

"Additional Ships" means, together, "STAR DELTA", "STAR GAMMA", "STAR EPSILON", "STAR ZETA" and "STAR THETA" and, in the singular, means any of them;

"Additional Owners" means, together, Star D, Star E, Star G, Star T and Star Z and, in the singular, means any of them;

"Additional Finance Documents" means, together,

(a) the Guarantees;

(b) the Shares Pledges;

(c) the Mortgages;

(d) the General Assignments;

(e) the Charter Assignments;

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(f) the Master Agreement Assignments;

(g) the Manager's Undertakings; and

(h) the Intercreditor Deed,

in respect of the Additional Owners and/or the Additional Ships and, in the singular, means any of them;

"Affected Lender" has the meaning given in Clause 5.5;

"Agency and Trust Deed" means the agency and trust deed executed or to be executed between the Borrower, the Lenders, the Agent, the Swap Bank and the Security Trustee in such form as the Lenders may approve or require;

"Agent" means Commerzbank AG and any of its successors including, without limitation, any successor appointed under clause 5 of the Agency and Trust Deed;

"Approved Flag" means the Marshall Islands flag or such other flag as the Agent may, acting upon the instructions of the Majority Lenders, approve as the flag on which a Ship is or, as the case may be, shall be registered;

"Approved Flag State" means the Republic of Marshall Islands, or any other country in which the Agent, may, acting upon the instructions of the Majority Lenders, approve that a Ship is or, as the case may be, shall be registered;

"Approved Manager" means:

(a) in relation to the commercial management of each Ship, Star Bulk Management Inc., a corporation incorporated in the Republic of Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960 and

(b) in relation to the technical management of each Ship, Star Bulk S.A., a corporation incorporated in Liberia having its registered office at 80 Broad Street, Monrovia, Liberia,

or any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as the commercial and/or technical manager of a Ship and, in the plural, means both of them;

"AURORA" means the 2000-built Capesize bulk carrier of 171,199 metric tons deadweight currently registered in the ownership of the Seller under the Danish flag with the name "NORD-KRAFT" to be acquired by Star A pursuant to the MOA and registered in its ownership under an Approved Flag with the name "STAR AURORA";

"Availability Period" means, in relation to the Loan, the period commencing on the date of this Agreement and ending on:

(a) 31 December 2010 (or such later date as the Agent may, with the authorisation of all the Lenders, agree with the Borrower); or

(b) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

"Balloon Instalment" has the meaning given to it in Clause 8.1;

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"Book Equity" means, at any relevant time, the aggregate of the amounts paid-up or credited as paid-upon of the issued capital stock of the Borrower and the other members of the Group and any additional paid-in capital of the Borrower and the other members of the Group and the amount of consolidated capital and revenue reserves of the Borrower and the other members of the Group (including any share premium account, capital redemption reserve fund, revaluation reserve and any credit balance on any retained earnings account(s) of any member of the Group) and other stockholders' equity determined in accordance with GAAP all as shown by the latest consolidated accounts of the Group delivered under this Agreement but after:

(i) deducting any debit balance on such retained earnings account(s);

(j) deducting any amount shown in such combined balance sheet in respect of goodwill (including goodwill arising on consolidation) and other intangible assets;

(k) excluding any amounts set aside for taxation as at the date of such balance sheet and making such adjustments as may be appropriate in respect of any significant additional taxation expected to result from transactions carried out by any member of the Group after such date and not reflected in that balance sheet;

"Borrower" means Star Bulk Carriers Corp., a corporation incorporated in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960;

"Business Day" means a day on which banks are open in London, Hamburg, Athens and Piraeus and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

"Cash Collateral Account" has the meaning given to it in clause 1.2 of the Existing Loan Agreement;

"Charterparty" means, in relation to a Ship, the Initial Charterparty or the Future Charterparty and, in the plural, means all of them;

"Charterparty Assignment" means:

(a)           in relation to "AURORA", the first priority; and

(b)           in relation to each Additional Ship, the second priority,

assignment of the rights of the Owner of that Ship under each Initial Charterparty or, as the case may be, any Future Charterparty executed or, as the context may require, to be executed by the relevant Owner in favour of the Security Trustee, in each case, in such form as the Lenders may approve or require and, in the plural, means all of them;

"Commitment" means, in relation to a Lender, the amount set opposite its name in the third column of Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments" means the aggregate of the Commitments of all the Lenders);

"Compliance Certificate" means a certificate in the form set out in Schedule 7 (or in any other form which the Agent, acting with the authorisation of all the Lenders, approves or requires);

"Contract Price" means $42,500,000 being the purchase price for "AURORA" payable by Star A to the Seller pursuant to the MOA;

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"Contractual Currency" has the meaning given in Clause 21.5;

"Confirmation" and "Early Termination Date" in relation to any continuing Designated Transaction, have the meanings given in the Master Agreement;

"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender;

"Creditor Party" means the Agent, the Security Trustee, the Swap Bank or any Lender, whether as at the date of this Agreement or at any later time;

"Defaulting Party" has the meaning given to in the Master Agreement;

"Designated Transaction" means a Transaction which fulfils the following requirements:

(a) it is entered into by the Borrower pursuant to the Master Agreement with the Swap Bank; and

(b) its purpose is the hedging of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment Date;

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

"Drawdown Date" means the date requested by the Borrower for the Loan to be advanced, or (as the context requires) the date on which the Loan is actually advanced;

"Drawdown Notice" means a notice in the form set out in Schedule 3 (or in any other form which the Agent approves or reasonably requires);

"Earnings" means, in relation to each Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner thereof or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):

(a)           all freight, hire and passage moneys, compensation payable to the relevant Owner or the Security Trustee in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;

(b) all moneys which are at any time payable under Insurances in respect of loss of earnings; and

(c) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;

"Earnings Account" means, in relation to each Ship, an account in the name of the Owner of that Ship with the Agent designated "[name of Owner] - Earnings Account", or any other account (with that or another office of the Agent) which is designated by the Agent as the Earnings Account for that Ship for the purposes of this Agreement and, in the plural, means all of them;

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"Earnings Account Pledge" means, in relation to each Earnings Account, a deed of pledge creating security in respect of that Earnings Account in such form as the Lenders may approve or require and in the plural means all of them;

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

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

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

"Environmental Incident" means, in relation to each Ship:

(a) any release of Environmentally Sensitive Material from that Ship; or

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

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

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

"Event of Default" means any of the events or circumstances described in Clause 19.1;

"Existing Loan" means means the principal amount for the time being outstanding under the Existing Loan Agreement;

"Existing Loan Agreement" means the loan agreement dated 27 December 2007 (as amended and supplemented by a supplemental agreement dated 10 June 2009 and a supplemental agreement dated 27 January 2010) made between (i) the Borrower as borrower, (ii) the banks and financial institutions listed in Schedule I thereto as lenders (the "Existing Lenders") and (iii) Commerzbank AG as agent and security trustee pursuant to which the Existing Lenders made available to the Borrower a loan facility of (originally) $120,000,000;

"Finance Documents" means:

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(a) this Agreement;

(b) the Master Agreement;

(c) the Agency and Trust Deed;

(d) the Guarantees;

(e) the Mortgages;

(f) the General Assignments;

(g) the Earnings Account Pledges;

(h) the Master Agreement Assignment;

(i) the Charierpariy Assignments;

(j) the Shares Pledges;

(k) the Shares Pledge Option Agreement;

(l) the Management Agreement Assignments;

(m) the Manager's Undertakings;

(n) the Intercreditor Deed; and

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

"Financial Indebtedness" means, in relation to a person (the "debtor"), a liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

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"Financial Year" means, in relation to the Borrower, each Owner and the Group, each period of 1 year commencing on 1 January in respect of which its consolidated accounts are or ought to be prepared;

"Fleet Vessels" means, together, all of the vessels (including, but not limited to, the Ships) from time to time owned by members of the Group;

"Future Charterparty" means, in relation to each Ship, any time charterparty, consecutive voyage charter or contract of affreightment in respect of such Ship (other than any Initial Charterparty) of a duration (or capable of being or exceeding a duration) of 12 months or more and any guarantee of such charter or other contract of employment in respect of such Ship to be entered into by the Owner of such Ship and a charterer approved by the Agent in form and substance satisfactory to the Agent (in each case, acting upon the instructions of the Majority Lenders);

"GAAP" means generally accepted accounting principles as from time to time in effect in the United States of America;

"General Assignment" means:

(a) in relation to "AURORA", the first priority; and

(b) in relation to each Additional Ship, the second priority,

general assignment of the Earnings, the Insurances and any Requisition Compensation of that Ship in such form as the Lenders may approve or require and, in plural means all of them;

"Group" means the Borrower and its subsidiaries (whether direct or indirect and including, but not limited to, the Owners) from time to time during the Security Period and "member of the Group" shall be construed accordingly;

"Guarantee" means, in relation to each Owner, the guarantee executed or to be executed by that Owner in favour of the Security Trustee guaranteeing the obligations of the Borrower under this Agreement and the other Finance Documents in such form as the Lenders shall approve or require and, in the plural, means all of them;

"IACS" means the International Association of Classification Societies;

Charterparty" means, in relation to each Ship, the time charterparty in relation to that Ship as more particularly described in Schedule 2 to be in form and substance satisfactory to the Agent (acting upon the instructions of the Majority Lenders) and, in the plural, means all of them;

"Initial Market Value" means, in relation to "AURORA", the market value thereof calculated in accordance with paragraph 6 of Schedule 4, Part B;

"Insurances" means, in relation to each Ship:

(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of the Ship, her Earnings or otherwise in relation to her; and

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

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"Intercreditor Deed" means the deed entered or to be entered between (i) the Borrower, (ii) Star A, (iii) the Security Trustee as first mortgagee and (iv) the security trustee (the "Existing Security Trustee") appointed by the Existing Lenders in respect of the Existing Loan Agreement, as second mortgagee, coordinating the rights of the Security Trustee and the Existing Security Trustee in connection with Star A and "AURORA" in such form as the Lenders may approve or require;

"Interest Period" means a period determined in accordance with Clause 5;

"ISM Code" means, in relation to its application to each Owner, its Ship and its operation:

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

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

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

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

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

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

(c) any other documents which are prepared or which are otherwise relevant to establish and maintain the Ship's or the compliance of its Owner with the ISM Code which the Agent may require;

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

"ISPS Code" means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation ("IMO") now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of the IMO on Maritime Security in December 2002 and includes any amendments or extensions to it and any regulation issued pursuant to it but shall only apply insofar as it is applicable law in the relevant Ship's flag state and any jurisdiction on which such Ship is operated;

"ISPS Code Documentation" includes:

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(a) the International Ship Security Certificate issued pursuant to the ISPS Code in relation to each Ship within the period specified in the ISPS Code; and

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

"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code;

"Lender" means, subject to Clause 26.6:

(a) a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Borrower under Clause 26.14) unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

(b) the holder for the time being of a Transfer Certificate;

"LIBOR" means, for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m. (London time) on the second Business Day prior to the commencement of that Interest Period (and, for the purposes of this Agreement, "REUTERS BBA Page LIBOR 01" means the display designated as "REUTERS BBA Page LIBOR 01" on the Reuters Money News Services or such other page as may replace REUTERS BBA Page LIBOR 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association for the purpose of displaying British Bankers' Association Interest Settlement Rates for Dollars); or

(b) if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum determined by the Agent to be the arithmetic mean of the rates per annum notified to the Agent by each Lender to be the rate per annum at which deposits in Dollars are offered to that Lender by leading banks in the London Interbank Market at that Lender's request of or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;

"Liquid Funds" means, in respect of the relevant period, the aggregate of

(a) cash in hand or held with banks or other financial institutions of at least investment grade rating which is free of any Security Interest; and

(b) any undrawn amounts under loan or credit facilities which are freely available by an investment grade financial institution;

"Loan" means the principal amount for the time being outstanding under this Agreement;

"Major Casualty" means, in relation to each Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $250,000 or the equivalent in any other currency;

"Majority Lenders" means:

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(a) before the Loan has been advanced, Lenders whose Commitments total at least 66 2/3 per cent. of the Total Commitments; and

(b) after the Loan has been advanced, Lenders whose Contributions total 66 2/3 per cent. of the Loan;

"Manager's Undertaking" means, in relation to each Ship, a letter of undertaking executed or to be executed by each Approved Manager in favour of the Security Trustee in such form as the Lenders may approve or require agreeing certain matters in relation to the commercial or, as the case may be, technical management of that Ship and subordinating the rights of that Approved Manager against the Ship and the Owner thereof to the rights of the Creditor Parties under (inter alia) the Finance Documents and, in the plural, means all of them;

"Management Agreement" means, in relation to each Ship, an agreement made or to be made between the Owner of that Ship and each Approved Manager in respect of the commercial and/or technical management of the Ship to be in form and substance in every respect satisfactory to the Agent (acting upon the instructions of the Majority Lenders) and, in the plural, means all of them;

"Management Agreement Assignment" means, in relation to each Management Agreement, the first priority assignment of the rights and interests of the relevant Owner under that Management Agreement in such form as the Lenders may approve or require and, in the plural, means all of them;

"Margin" means 2.60 per cent, per annum;

"Market Value" means, in relation to each Ship and each Fleet Vessel, the market value thereof calculated in accordance with Clause 15.4;

"Market Value Adjusted Equity" means, at any relevant time the Book Equity after:

(a) deducting (so far as not otherwise excluded as attributable to minority interests) a sum equal to the aggregate of the amount by which the book value of any Fleet Vessels on a consolidated basis exceeds the Market Value of such Fleet Vessels; or

(b) adding (so far as not otherwise excluded as attributable to minority interests) a sum equal to the amount by which the Market Value of the Fleet Vessels determined in accordance with Clause 15.4 exceeds the book value of such Fleet Vessels;

"Market Value Adjusted Equity Ratio" means the Market Value Adjusted Equity expressed as a percentage of the Total Assets;

"Master Agreement" means the master agreement (on the 1992 or, at the option of the Lenders, 2002 ISDA (Multicurrency-Crossborder) form) entered or, as the context may require, to be entered into between the Borrower and the Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under the master agreement;

"Master Agreement Assignment" means the assignment of the Master Agreement executed or, as the context may require, to be executed by the Borrower in favour of the Security Trustee in such form as the Lenders may approve or require;

"Minimum Amount" has the meaning given to it in clause 12.8 of the Existing Loan Agreement;

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"MOA" means the memorandum of agreement dated 18 February 2010 entered into between the Seller and Star A in respect of the sale and purchase of "AURORA";

"Mortgage" means:

(a) in relation to each Additional Ship, a second; and

(b) in relation to "AURORA", first,

in each case priority or, as the case may be, preferred; mortgage on such Ship under the relevant Approved Flag, each in such form as the Lenders may approve or require and, in plural, means all of them;

"Mortgaged Ship" means a Ship which is subject to a Mortgage at any relevant time and, in the plural, means all of them;

"Negotiation Period" has the meaning given in Clause 5.8;

"Notifying Lender" has the meaning given in Clause 23.1 or 24.1 as the context requires;

"Owner" means in relation to:

(a) "AURORA", Star A;

(b) "STAR DELTA", Star D;

(c) "STAR EPSILON", Star E;

(d) "STAR GAMMA", Star G;

(e) "STAR THETA", Star T; and

(f) "STAR ZETA", Star Z,

and in the plural, means all of them;

"Payment Currency" has the meaning given in Clause 21.5;

"Permitted Security Interests" means:

(a) Security Interests created by the Finance Documents;

(b) liens for unpaid crew's wages in accordance with usual maritime practice;

(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(h);

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(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Owner is prosecuting or defending such action in good faith by appropriate steps; and

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

"Pertinent Jurisdiction", in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company's central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;

"Potential Event of Default" means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;

"Quotation Date" means, in relation to any Interest Period (or any other period) for which an interest rate is to be determined under any provision of a Finance Document) the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;

"Relevant Person" has the meaning given in Clause 19.9;

"Repayment Date" means a date on which a repayment is required to be made under Clause 8;

"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";

"Secured Liabilities" means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or by virtue of the Finance Documents or any judgment relating to the Finance Documents; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

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"Security Interest" means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the rights of the plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

"Security Party" means each Owner, each Approved Manager and any other person (except a Creditor Party or a party which is not a member of the Group or is not controlled (either directly or indirectly) by the Borrower) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the final paragraph of the definition of "Finance Documents";

"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower, the Security Parties and the Lenders that:

(a) all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

(c) neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 below or any other provision of this Agreement or another Finance Document; and

(d) the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

"Security Trustee" means Commerzbank AG and any of its successors including, without limitation, any successor appointed under clause 5 of the Agency and Trust Deed;

"Seller" means Dampskibsselskabet NORDEN A/S, a company incorporated and existing in Denmark at 52 Strandvejen, DK-2900 Hellerup, Denmark;

"Shares Pledge" means, in relation to each Owner (other than Star A), a second priority pledge of the shares in that Owner executed or, as the context may require, to be executed by the Borrower, as shareholder, in favour of the Security Trustee, each to be in such form as the Lenders may approve or require and, in the plural, means all of them;

"Shares Pledge Option Agreement" means an agreement to create a pledge of all the shares in Star A at the option of the Lender, executed or, as the context may require, to be

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executed by the Borrower, as shareholder, in such form as the Lender may approve or require;

"Ships" means, together, "AURORA" and the Additional Ships and, in the singular, means any of them;

"Star A" means Star Aurora LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"Star D" means Star Delta LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"STAR DELTA" means the 2000-built Supramax bulk carrier of 52,434 metric deadweight tons registered in the ownership of Star D under the Marshall Islands flag with the name "STAR DELTA";

"Star E" means Star Epsilon LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"STAR EPSILON" means the 2001-built Supramax bulk carrier of 52,434 deadweight tons registered in the name of Star E under the Marshall Islands flag with the name "STAR EPSILON";

"Star G" means Star Gamma LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"STAR GAMMA" means the 2002-built Supramax bulk carrier of 52,500 metric deadweight tons registered in the ownership of Star 0 under the Marshall Islands flag with the name "STAR GAMMA";

"Star T" means Star Theta LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"STAR THETA" means the 2003-built Supramax bulk carrier of 52,500 metric deadweight tons registered in the ownership of Star T under the Marshall Islands flag with the name "STAR THETA";

"Star Z" means Star Zeta LLC, a limited liability company formed in the Republic of Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

"STAR ZETA" means the 2003-built Supramax bulk carrier of 52,994 metric deadweight tons registered in the ownership of Star Z under the Marshall Islands flag with the name "STAR ZETA";

"Swap Bank" means Commerzbank AG acting through its office at Kaiserstrasse 16, 60621 Frankfurt Am Main, Germany;

"Swap Exposure" means, as at any relevant date, the amount certified by the Swap Bank to the Agent to be the aggregate net amount in Dollars which would be payable by the Borrower to the Swap Bank under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Designated Transactions

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entered into between the Borrower and the Swap Bank with the Borrower being the Defaulting Party;

"Total Assets" means, at any relevant time, the aggregate of (i) the aggregate Market Value of the Fleet Vessels, (ii) the value on a consolidated basis of all other tangible fixed assets of the Group (less depreciation computed in accordance with GAAP and (iii) the aggregate amount of cash and cash equivalents and receivables due to any member of the Group by a person who is not a member of the Group, including any Liquid Funds;

"Total Loss" means in relation to each Ship:

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

(b) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than her proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension;

(c) any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal;

(d) any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless she is within 30 days redelivered to the full control the relevant Owner;

"Total Loss Date" means:

(a) in the case of an actual loss of a Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of a Ship, the earliest of:

(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Owner, with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;

"Transaction" has the meaning given in the Master Agreement;

"Transfer Certificate" has the meaning given in Clause 26.2; and

"Trust Property" has the meaning given in clause 3.1 of the Agency and Trust Deed.

1.2 Construction of certain terms. In this Agreement:

"approved" means, for the purposes of Clause 13, approved in writing by the Agent;

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

"company" includes any partnership, joint venture and unincorporated association;

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"consent" includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained;

"document" includes a deed; also a letter, fax or telex;

"excess risks" means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of any Ship in consequence of her insured value being less than the value at which that Ship is assessed for the purpose of such claims;

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"law" includes any form of delegated legislation, any order or decree, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

"months" shall be construed in accordance with Clause 1.3;

"obligatory insurances" means all insurances effected, or which the Borrower is obliged to effect, under Clause 13 below or any other provision of this Agreement or another Finance Document;

"parent company" has the meaning given in Clause 1.4;

"person" includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

"regulation" includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is reasonable in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

"subsidiary" has the meaning given in Clause 1.4;

"successor" includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or

16

or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;

"tax" includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

"war risks" means the risks according to Institute War and Strike Clauses (Hull Time) (1/10/83) or (1/11/95), or equivalent conditions, including, but not limited to risk of mines, blocking and trapping, missing vessel, confiscation, vandalism, sabotage and malicious mischief and all risks excluded from the standard form of English or other marine policy.

1.3 Meaning of "month". A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

and "month" and "monthly" shall be construed accordingly.

1.4 Meaning of "subsidiary". A company (S) is a subsidiary of another company (P) if;

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attached to the issued shares of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

and any company of which S is a subsidiary is a parent company of S.

1.5 General Interpretation.

(a) In this Agreement:

(i) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(ii) references to, or to a provision of, any law include any amendment, extension, re­enactment or replacement, whether made before the date of this Agreement or otherwise; and

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(iii) words denoting the singular number shall include the plural and vice versa.

(b) Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary intention appears.

(c) References in Clause 1.1 to a document being in a particular form include references to that form with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.

(d) The clause headings shall not affect the interpretation of this Agreement.

2 FACILITY

2.1 Amount of facility. Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower a term loan facility not exceeding the lesser of (a) $26,000,000 and (b) an amount equal to 60 per cent. of the Initial Market Value of "AURORA" in a single advance.

2.2 Lenders' participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

2.3 Purpose of Loan. The Borrower undertakes with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.

3 POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS

3.1 Interests of Lenders and Swap Bank several. The rights of the Lenders and the Swap Bank under this Agreement and the Master Agreement are several; accordingly (a) each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement and (b) the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrower to it under the Master Agreement without joining the Agent, the Security Trustee or any other Lender or the Swap Bank as additional parties in the proceedings.

3.2 Proceedings by individual Lender or Swap Bank. However, without the prior consent of the Majority Lenders, neither a Lender nor a Swap Bank may bring proceedings in respect of:

(a) any other liability or obligation of the Borrower or a Security Party under or connected with a Finance Document or the Master Agreement; or

(b) any misrepresentation or breach of warranty by the Borrower or a Security Party in or connected with a Finance Document or the Master Agreement.

3.3 Obligations several. The obligations of the Lenders under this Agreement and of the Swap Bank under the Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or of the Swap Bank to perform its obligations under the Master Agreement shall not result in:

(a) the obligations of the other Lenders being increased; nor

(b) the Borrower, any Security Party or any other Creditor Party being discharged (in whole or in part) from its obligations under any Finance Document;

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and in no circumstances shall a Lender have any responsibility for a failure of another Lender or the Swap Bank to perform its obligations under this Agreement and the Master Agreement.

3.4 Parties bound by certain actions of Majority Lenders. Every Lender, the Swap Bank, the Borrower and each Security Party shall be bound by:

(a) any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;

(b) any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document; and

(c) any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.

3.5 Reliance on action of Agent. However, the Borrower and each Security Party:

(a) shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and

(b) shall not be entitled to require any evidence that such an instruction or authorisation has been given.

3.6 Construction. In Clauses 3.4 and 3.5 references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.

4 DRAWDOWN

4.1 Request for the Loan to be advanced. Subject to the following conditions, the Borrower may request the Loan to be advanced by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Hamburg time) 3 Business Days prior to the intended Drawdown Date.

4.2 Availability. The conditions referred to in Clause 4.1 are that:

(a) the Drawdown Date has to be a Business Day during the Availability Period; and

(b) the amount of the Loan shall not exceed the lesser of (i) $26,000,000 and (ii) 60 per cent. of the Initial Market Value of "AURORA,

Provided always that the aggregate principal amount of the Loan shall not exceed $26,000,000.

4.3 Notification to Lenders of receipt of Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the Drawdown Notice and shall inform each Lender of:

(a) the amount of the Loan and the Drawdown Date;

(b) the amount of that Lender's participation in the Loan; and

(c) the duration of the first Interest Period applicable to the Loan.

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4.4 Drawdown Notice irrevocable. The Drawdown Notice must be signed by an authorized signatory or a director of the Borrower; and once served, it cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

4.5 Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on the Drawdown Date under Clause 2.2.

4.6 Disbursement of Loan. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrower shall be made:

(a) to the account which the Borrower specifies in the Drawdown Notice; and

(b) in the like funds as the Agent received the payments from the Lenders.

4.7 Disbursement of Loan to third party. The payment by the Agent under Clause 4.6 to the Seller shall constitute the advance of the Loan and the Borrower shall thereupon become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.

5 INTEREST

5.1 Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan and each part thereof in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

5.2 Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan and each part thereof in respect of an Interest Period shall be the aggregate of (i) the Margin and (ii) LIBOR.

5.3 Payment of accrued interest. In the case of an Interest Period longer than 6 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

5.4 Notification of Interest Periods and rates of normal interest. The Agent shall notify the Borrower and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period;

in each case as soon as reasonably practicable after each is determined.

5.5 Market disruption. The following provisions of this Clause 5 apply if at least one Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.

5.6 Notification of market disruption. The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.5 which have caused its notice to be given.

5.7 Suspension of drawdown. If the Agent's notice under Clause 5.6 is served before the Loan is advanced:

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(a) in a case falling within paragraph (a) of Clause 5.5, the Lenders' obligations to advance the Loan;

(b) in a case falling within paragraph (b) of Clause 5.5, the Affected Lender's obligation to participate in the Loan;

shall be suspended while the circumstances referred to in the Agent's notice continue.

5.8 Negotiation of alternative rate of interest. If the Agent's notice under Clause 5.6 is served after the Loan is advanced, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Agent serves its notice under Clause 5.6 (the "Negotiation Period"), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution to the Loan during the Interest Period concerned.

5.9 Application of agreed alternative rate of interest. Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

5.10 Alternative rate of interest in absence of agreement. If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution to the Loan plus the Margin; and the procedure provided for by this Clause 5.10 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.

5.11 Notice of prepayment. If the Borrower does not agree with an interest rate set by the Agent under Clause 5.10, the Borrower may give the Agent not less than 15 Business Days' notice of its intention to prepay the Loan at the end of the interest period set by the Agent.

5.12 Prepayment; termination of Commitments. A notice under Clause 5.11 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower's notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and

(b) on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the applicable Margin.

5.13 Application of prepayment. The provisions of Clause 8 shall apply in relation to the prepayment.

6 INTEREST PERIODS

6.1 Commencement of Interest Periods. The first Interest Period shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

6.2 Duration of normal Interest Periods. Subject to Clause 6.3, each Interest Period shall be:

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(a) 3, 6, 9 or 12 months as notified by the Borrower to the Agent not later than 11.00 a.m. (Hamburg time) 3 Business Days before the commencement of the Interest Period;

(b) 3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a) above; or

(c) such other period as the Agent may, with the Majority Lenders' authority, agree with the Borrower.

6.3 Duration of Interest Periods for repayment instalments. In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

6.4 Non-availability of matching deposits for Interest Period selected. If, after the Borrower has selected an Interest Period longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (Hamburg time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.

7 DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts. The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.

7.2 Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at paragraphs (a) and (b) of Clause 7.3; or

(b) in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 7.3.

7.3 Calculation of default rate of interest. The rates referred to in Clause 72 are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);

(b) the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

(i) LIBOR; or

(ii) if the Agent determines that Dollar deposits for any such period are not being made available to a Lender or (as the case may be) Lenders by leading banks in the London Interbank Market in the ordinary course of business, a rate from time

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to time determined by the Agent by reference to the cost of funds to the Agent from such other sources as the Agent may from time to time determine.

7.4 Notification of interest periods and default rates. The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent's notification.

7.5 Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

7.6 Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

7.7 Application to Master Agreement. For the avoidance of doubt, this Clause 7 does not apply to any amount payable under the Master Agreement in respect of any continuing Designated Transaction as to which section 2(e) (Default Interest; Other Amounts) of the Master Agreement shall apply.

8 REPAYMENT AND PREPAYMENT

8.1 Repayment. The Borrower shall repay the Loan by (i) 24 consecutive 3-monthly instalments, each in the amount of $950,000 and (ii) a balloon payment of $3,200,000 (the "Balloon Instalment") payable together with the twenty fourth and final instalment Provided that if the amount of the Loan drawndown is less than $26,000,000, each repayment instalment (including the Balloon Instalment) shall be reduced pro rata by an amount equal to such undrawn amount.

8.2 Repayment Dates. The first repayment instalment shall be repaid on the date falling 3 months after the Drawdown Date, each subsequent repayment instalment shall be repaid at 3-monthly intervals thereafter and the last instalment shall be repaid together with the Balloon Instalment, on the earlier of (i) the date falling on the sixth anniversary of the Drawdown Date and (ii) 31 December 2016.

8.3 Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

8.4 Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan on the last day of an Interest Period in respect thereof.

8.5 Conditions for voluntary prepayment. The conditions referred to in Clause 8.4 are that:

(a) a partial prepayment shall be $250,000 or a multiple of $250,000;

(b) the Agent has received from the Borrower at least 10 days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period); and

(c) the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.

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8.6 Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authority of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

8.7 Notification of notice of prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.5(c).

8.8 Mandatory prepayment. The Borrower shall be obliged to prepay the Loan:

(a) if "AURORA" is sold, on or before the date on which the sale is completed by delivery of that Ship to the buyer;

(b) if "AURORA"becomes a Total Loss, on the earlier of the date falling 120 days after the relevant Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss; and

(c) if the Initial Charterparty relative to "AURORA" is terminated or becomes invalid or unenforceable or otherwise ceases to be in full force and effect for any reason or expires prior to the final Repayment Date and such Initial Charterparty is not renewed (on terms acceptable to the Agent, acting on the instructions of the Majority Lenders) or replaced, not later than the date on which such Initial Charterparty is terminated or becomes invalid or unenforceable or otherwise ceases to be in full force and effect for any reason or expires, by another Approved Charter in a form, with an Approved Charterer and on terms acceptable to the Agent (acting on the instructions of the Majority Lenders).

In this Clause 8.8(c) the following terms will have the following meanings:

"Approved Charter" means, in the case of "AURORA", any Future Charterparty in respect thereof, entered into by Star A with an Approved Charterer, for a duration at least equal to the Applicable Period, an Approved Rate and on such other terms and conditions in all respects acceptable to the Agent (acting on the instructions of the Majority Lenders;

"Approved Charterer" means a first-class charterer in all respects acceptable to the Agent (acting on the instructions of the Majority Lenders);

"Applicable Period" the period commencing on the date of the Approved Charter and ending on the final Repayment Date;

"Approved Rate" means a daily charter hire rate which exceeds at all times during the Applicable Period the aggregate of (i) the daily operating expenses of "AURORA" and (ii) the Relevant Fraction of the Debt Service;

"Debt Service" means the aggregate of (i) the amount of the aggregate of the repayment instalments payable under Clause 8.1 during the Applicable Period, (ii) the Balloon Instalment and (iii) the amount of interest on the Loan calculated by the Agent to be payable during the Applicable Period;

"Relevant Fraction" means a fraction whose:

(a) numerator is the Debt Service; and

(b) denominator is the number of days falling within the Applicable Period.

8.9 Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 below or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest

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Period together with any sums payable under Clause 21.1(b) but without premium or penalty.

8.10 Application of partial prepayment. Each partial prepayment received by the Agent shall be applied in inverse order of maturity against the repayment instalments (including the Balloon Instalment) which are outstanding at the relevant time.

8.11 Reborrowing. No amount prepaid in respect of the Loan may be reborrowed.

8.12 Prepayment Fee. The Borrower shall, in connection with each prepayment made pursuant to this Agreement, pay to the Agent (for distribution to the Lenders pro rata to their Contributions) on any Prepayment Date the applicable Prepayment Fee.

In this Clause 8.12:

"Prepayment Date" means the date on which the Borrower makes a prepayment of the whole or any part of the Loan in accordance with the terms of this Agreement; and

"Prepayment Fee" means, if the Prepayment Date occurs:

(a) during the period commencing on the date of this Agreement and ending on the date falling 364 days thereafter, $75,000;

(b) during the period commencing on the first anniversary of the date of this Agreement and ending on the date falling 364 days thereafter, $50,000; and

(c) during the period commencing on the second anniversary of the date of this Agreement and ending on the date falling 364 days thereafter, $25,000.

8.13 Unwinding of Designated Transactions. On or prior to any repayment or prepayment of the Loan under this Clause 8 or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions to the extent necessary to ensure that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1.

8.14 Prepayment of Swap Benefit. If a Designated Transaction is terminated during the Security Period in circumstances where the Swap Bank would be obliged to pay an amount to the Borrower under the Master Agreement, the Borrower hereby agrees that such payment shall be paid to the Agent to be applied by the Agent in accordance with Clause 17 and authorises the Swap Bank to pay such amount to the Agent for such purpose.

9 CONDITIONS PRECEDENT

9.1 Documents, fees and no default. Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:

(a) that, on or before service of the Drawdown Notice, the Agent receives the documents described in Part A of Schedule 4 in form and substance satisfactory to the Agent (acting on the authority of the Majority Lenders) and its lawyers;

(b) that, on or before the Drawdown Date, the Agent receives the documents described in Part B of Schedule 4 in form and substance satisfactory to the Agent (acting on the authority of the Majority Lenders) and its lawyers;

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(c) that, on or before the service of the Drawdown Notice, the Agent receives all accrued commitment fee and all other fees referred to in Clause 20.1 which are payable at that time and has received payment of the expenses referred to in Clause 20.2;

(d) that both at the date of the Drawdown Notice and at the Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;

(ii) the representations and warranties in Clause 10 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 5.5 has occurred and is continuing; and

(iv) there has been no material adverse change in the financial position, state of affairs or prospects of the Borrower, any Security Party or any member of the Group since the date of the Agent's commitment letter (dated 14 June 2010) to the Borrower for the Loan, in the light of which the Agent considers that there is a significant risk that the Borrower or any other Security Party will later become unable to discharge its liabilities under the Finance Documents to which it is a party as they fall due;

(e) that, if the ratio set out in Clause 15.1 were applied immediately following the advance of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(f) that at the Drawdown Date the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.

9.2 Waiver of conditions precedent. If the Majority Lenders, at their discretion, permit the Loan to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authority of the Majority Lenders, specify).

10 REPRESENTATIONS AND WARRANTIES

10.1 General. The Borrower represents and warrants to each Creditor Party as follows.

10.2 Status. The Borrower is duly formed and validly existing and in good standing under the laws of the Marshall Islands.

10.3 Share capital and ownership. The Borrower has an authorised share capital divided into 62,200,260 common shares each of $0.01 par value and issued in registered form.

10.4 Corporate power. The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute the Finance Documents to which it is a party; and

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(b) to borrow under this Agreement, enter into Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which the Borrower is a party.

10.5 Consents in force. All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.

10.6 Legal validity; effective Security Interests. The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

(a) constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, subject to any relevant insolvency laws affecting creditors' rights generally.

10.7 No third party Security Interests. Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:

(a) the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

10.8 No conflicts. The execution by the Borrower of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of the Borrower; or

(c) any contractual or other obligation or restriction which is binding on the Borrower or any of its assets including, without limitation, its shareholding in the Owners.

10.9 No withholding taxes. All payments which the Borrower is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

10.10 No default. No Event of Default or Potential Event of Default has occurred and is continuing.

10.11 Information. All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower, the Owners or any other member of the Group from that disclosed in the latest of those accounts.

10.12 Validity and completeness of MOA and Initial Charterparties.

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(a) the copies of the MOA and Initial Charterparties delivered to the Agent before the date of this Agreement are true and complete copies;

(b) the MOA and each Initial Charterparty constitutes valid, binding and enforceable obligations of the parties thereto respectively in accordance with its terms; and

(c) no amendments or additions to the MOA or an Initial Charterparty have been agreed nor has any party thereto waived any of their respective rights under the MOA or any Initial Charterparty.

10.13 No litigation. No legal or administrative action involving the Borrower, any Owner, any other Security Party or any other member of the Group (including, without limitation, any action relating to any alleged or actual breach of the ISM Code and the ISPS Code and/or any action relating to the MOA or any Initial Charterparty) has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken.

10.14 No rebates etc. There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to Star A, the Seller or any third party in connection with the purchase by Star A of "AURORA", other than as disclosed to the Lenders in writing on or prior to the date of this Agreement (including, without limitation, any information disclosed in the Form F-1 registration statement and prospectus filed with the US Securities and Exchange Commission, a copy of which has been delivered to the Lenders).

10.15 Compliance with certain undertakings. At the date of this Agreement, the Borrower is in compliance with Clauses 11.2, 11.4, 11.9 and 11.13.

10.16 Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to the Borrower or its business.

10.17 ISM Code and ISPS Code compliance. The Borrower will procure that the Owners and each Approved Manager have obtained (or, in the case of Star A, will obtain on or prior to the delivery of "AURORA" to it, pursuant to the MOA) all necessary ISM Code Documentation and ISPS Code Documentation in connection with the Ships owned by the Owners and will procure that the Owners and each Approved Manager will, comply with the ISM Code and the ISPS Code.

10.18 No money laundering. Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council),

11 GENERAL UNDERTAKINGS

11.1 General. The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authority of the Majority Lenders, otherwise permit.

11.2 Title; negative pledge and pari passe ranking. The Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in "AURORA", the Insurances and Earnings in respect of that Ship, free from all Security Interests and other

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interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Document and except for Permitted Security Interests;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future (including, but not limited to the Borrower's rights against the Swap Bank under the Master Agreement or all or any part of the Borrower's interest in any amount payable to the Borrower by the Swap Bank under the Master Agreement); and

(c) procure that its liabilities under the Finance Documents to which it is a party do and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

11.3 No disposal of assets. The Borrower will not transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.

11.4 Restriction on other liabilities or obligations to be incurred. The Borrower will not incur any liability or obligation except liabilities and obligations:

(a) under the Finance Documents to which it is a party;

(b) under the Master Agreement (but in such case, only in connection with Designated Transactions);

(c) under the MOA; and

(d) incurred in the normal course of its business (which shall include, without limitation, incurring Financial Indebtedness for the financing of the vessels owned by its subsidiaries guaranteeing the obligations of its subsidiaries and all other matters reasonably incidental thereto).

11.5 Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

11.6 Provision of financial statements. The Borrower will send to the Agent:

(a) as soon as possible, but in no event later than 180 days after the end of each Financial Year of the Borrower (commencing with the Financial Year which ended 31 December 2009), the audited consolidated accounts of the Group for that Financial Year;

(b) as soon as possible, but in no event later than 90 days after the end of each quarterly period in each Financial Year of the Borrower (commencing with the financial quarter ended on 30 June 2010), the combined unaudited accounts of the Group for that 3- month period, certified as to their correctness by the chief financial officer of the Borrower; and

(c) promptly after each request by the Agent, such further financial information about the Borrower, each Owner, the Group and/or the Ships including, but not limited to, charter arrangements, Financial Indebtedness, operating expenses and loan repayment profiles, as the Agent may require.

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11.7 Form of financial statements. All accounts (audited and unaudited) delivered under Clause 11,6 will:

(a) be prepared in accordance with all applicable laws and GAAP;

(b) give a true and fair view of the state of affairs of the Borrower or, as the case may be, the Group at the date of those accounts and of its profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Borrower or, as the case may be, the Group; and

(d) be accompanied by a certificate signed by a certificate signed by the chief financial officer of the Borrower confirming that, as at the date of the certificate, no Event of Default has occurred and is continuing.

11.8 Shareholder and creditor notices. The Borrower will send the Agent, at the same time as they are despatched, copies of all communications which are despatched to all of the Borrower's shareholders or creditors or any class of them.

11.9 Consents. The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

(a) for the Borrower and each Owner to perform their obligations under the Finance Documents to which each is a party;

(b) for the validity or enforceability of any Finance Document;

(c) for each Owner to continue to own and operate the Ship owned by it,

and the Borrower will comply (or procure compliance) with the terms of all such consents.

11.10 Maintenance of Security Interests. The Borrower will:

(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

11.11 Notification of litigation. The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Owner, any other Security Party, any Ship or the Earnings or the Insurances of any Ship as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of the Finance Documents.

11.12 Principal place of business. The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated at Clause 28.2(a) and the Borrower shall not establish, or do anything as a result of which it would be deemed to have a place of business in the United Kingdom or the United States of America.

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11.13 Confirmation of no default. The Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an officer or director of the Borrower and which (based on its most recent annual or interim financial statements):

(a) states that no Event of Default or Potential Event of Default has occurred; or

(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

The Agent may serve requests under this Clause 11.14 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of the Loan or (if the Loan has not been advanced) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.14 does not affect the Borrower's obligations under Clause 11.15.

11.14 Notification of default. The Borrower will notify the Agent as soon as the Borrower becomes aware of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred;

and will thereafter keep the Agent fully up-to-date with all developments.

11.15 Provision of further information. The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:

(a) to the Borrower, any Owner, any Ship, an Approved Manager or any other Security Party, the Insurances or the Earnings; or

(b) to any other matter relevant to, or to any provision of, a Finance Document, which may be requested by the Agent, the Security Trustee or any Lender at any time.

11.16 Provision of copies and translation of documents. The Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the Agent so requires in respect of any of those documents, the Borrower will provide a certified English translation prepared by a translator approved by the Agent.

11.17 No amendment to MOA or the Initial Charterparties. The Borrower shall procure that no Owner shall agree to an amendment or change or supplement to (in the case of Star A) the MOA and the Initial Charterparty to which it is a party or shall procure that no Owner agrees to an amendment or change or supplement to the Initial Charterparty to which it is a party.

11.18 Ownership. The Borrower shall ensure that (a) it shall remain the direct or indirect owner of all of the limited liability company interests in each Owner and (b) there shall be no change in the legal and beneficial ownership of the shares in each Owner.

11.19 No amendment to Master Agreement; Transactions. The Borrower will not:

(a) agree to any amendment or supplement to, or waive or fail to enforce, the Master Agreement or any of its provisions; or

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(b) enter into any Transaction pursuant to the Master Agreement except Designated Transactions.

11.20 Security. The Borrower shall deliver, or procure there are delivered, to the Agent not later than the date falling 30 days after the date of this Agreement:

(a) original copies of each Additional Finance Document duly executed by the Borrower or, as the case may be, the relevant Security Party;

(b) documents equivalent to those referred to in paragraphs 3, 4, 5 and 10 of Schedule 4, Part A in connection with the execution of each Additional Finance Document by either the Borrower or, as the case may be, the relevant Owner; and

(c) documents and evidence equivalent to those referred to in paragraphs 3(b) to (f) (inclusive), 5 and 8 of Schedule 4, Part B.

11.21 General and administrative costs. The Borrower shall ensure that the payment of all the general and administrative costs of the Borrower and the Owners in connection with the ownership and operation of the Ships (including, without limitation, the payment of the management fees pursuant to the Management Agreements) shall be fully subordinated to the payment obligations of the Borrower or, as the case may be, the Owners, under this Agreement and the other Finance Documents throughout the Security Period.

11.22 "Know your client" documentation. Promptly upon the Agent's request the Borrower will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary "know your client" or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.

12 CORPORATE UNDERTAKINGS

12.1 General. The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authority of the Majority Lenders, otherwise permit.

12.2 Maintenance of status. The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.

12.3 Negative undertakings. The Borrower will not:

(a) change the nature of its business; or

(b) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrower's share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected,

or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length Provided that it shall not prevent or restrict the Borrower from on lending the Loan to Star A; or

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(c) open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purpose of the Finance Documents; or

(d) repurchase or release its issued share capital; or

(e) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.

12.4 Minimum Liquidity. The Borrower shall maintain throughout the Security Period in freely available cash deposits in the Cash Collateral Account an amount in aggregate of not less than the Required Amount.

In this Clause 12.4 "Required Amount" means

(a) for as long as the Borrower maintains the Minimum Amount in the Cash Collateral Account pursuant to clause 12.8 of the Existing Loan Agreement, $650,000; and

(b) at all other times, $1,000,000.

12.5 Financial Covenants. The Borrower undertakes that at all times:

(a) the Market Value Adjusted Equity Ratio will not be less than 25 per cent.; and

(b) the members of the Group will maintain Liquid Funds in an amount of at least the higher of (i) $10,000,000 and (ii) $1,000,000 per Fleet Vessel.

12.6 Subordination of rights of Borrower. All rights which the Borrower at any time has (whether in respect of the Loan or any other transaction) against any Owner or its assets shall be fully subordinated to the rights of the Creditor Parties under the Finance Documents; and in particular, the Borrower shall not during the Security Period:

(a) claim, or in a bankruptcy of any Owner or prove for any amount payable to the Borrower by an Owner, whether in respect of the Loan or any other transaction;

(b) take or enforce any Security Interest for any such amount; or

(c) claim to set-off any such amount against any amount payable by the Borrower to any Owner.

12.7 Compliance Check. Compliance with the undertakings contained in Clause 12.5 shall be determined as at 30 June and 31 December in each financial year of the Borrower by reference to, in the case of the compliance check as at 30 June, the unaudited consolidated accounts of the Group for the first 2 financial quarters in each financial year delivered by the Agent pursuant to this Agreement and for the compliance check as at 31 December in each financial year, the audited consolidated accounts for that financial year of the Group delivered to the Agent pursuant to this Agreement. At the same time as it delivers those consolidated accounts, the Borrower shall deliver to the Agent a Compliance Certificate signed by the chief financial officer of the Borrower.

13 INSURANCE

13.1 General. The Borrower also undertakes with each Creditor Party to procure that each Owner will comply with the following provisions of this Clause 13 at all times during the Security Period (in the case of Star A, after "AURORA" has been delivered to it in accordance with the MOA) except as the Agent may, with the authority of the Majority Lenders, otherwise permit.

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13.2 Maintenance of obligatory insurances. The Borrower shall procure that each Owner shall keep the Ship owned by it insured at the expense of that Owner against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including protection and indemnity war risks);

(c) in the case of protection and indemnity war risks, in an amount equal to the amount for which the war risks under the hull policies are effected (including, without limitation, protection and indemnity war risks in excess of the amount of war risks (hull));

(d) protection and indemnity risks in excess of the limit of cover for oil pollution liability risks included within the protection and indemnity risks; and

(e) any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for the relevant Owner to insure and which are specified by the Security Trustee by notice to the relevant Owner.

13.3 Terms of obligatory insurances. The Borrower shall procure that each Owner shall effect such insurances:

(a) in Dollars;

(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) an amount, which when aggregated with the insured value of the other Mortgaged Ships (but after deducting, at all times after the date on which the Agent is satisfied that the Borrower has complied with its obligations under Clause 11.20 and the Security Interests contemplated thereunder has been registered and/or granted, the Existing Loan) is equal to 110 per cent. of the aggregate of (AA) the Loan and (BB) any Swap Exposure and (ii) the Market Value of the Ship owned by it; and

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

(d) in relation to protection and indemnity risks, in respect of the full value and tonnage of the Ship owned by it;

(e) on approved terms; and

(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

13.4 Further protections for the Creditor Parties. In addition to the terms set out in Clause , the Borrower shall procure that the obligatory insurances shall:

(a) name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;

(b) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;

(c) provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be

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subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph from making personal claims against persons (other than the relevant Owner or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee;

(e) provide that the Security Trustee may make proof of loss if the relevant Owner fails to do so; and

(f) provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Security Trustee for 30 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.

13.5 Renewal of obligatory insurances. The Borrower shall procure that each Owner shall:

(a) at least 21 days before the expiry of any obligatory insurance:

(i) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the relevant Owner proposes to renew that insurance and of the proposed terms of renewal; and

(ii) in case of any substantial change in insurance cover, obtain the Security Trustee's approval to the matters referred to in paragraph (i) above;

(b) at least 14 days before the expiry of any obligatory insurance, renew the insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking. The Borrower shall procure that each Owner shall ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters of undertaking in a form required by the Majority Lenders and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions;

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(e) they will notify the Security Trustee if any person other than the Owner is named as assured or co-assured in any of the obligatory insurances and shall procure that, upon the written request of the Security Trustee, such additional assured or co-assured executes in favour of the Security an assignment (in such form as the Lenders may approve or require) of its interest in the obligatory insurances; and

(f) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by the relevant Owner under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies or, any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee.

13.7 Copies of certificates of entry. The Borrower shall procure that each Owner shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by that Owner is entered provides the Security Trustee with:

(a) a certified copy of the certificate of entry for that Ship;

(b) a letter or letters of undertaking in such form as may be required by the Security Trustee; and

(c) where required to be issued under the terms of insurance/indemnity provided by the relevant Owner's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Owner in accordance with the requirements of such protection and indemnity association; and

(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship if applicable.

13.8 Deposit of original policies. The Borrower shall procure that each Owner shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums. The Borrower shall procure that each Owner shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.

13.10 Guarantees. The Borrower shall procure that each Owner shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

13.11 Restrictions on employment. The Borrower shall procure that no Owner shall employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances.

13.12 Compliance with terms of insurances. The Borrower shall procure that no Owner shall do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and, in particular:

(a) each Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.7(c) above) ensure that the obligatory insurances are

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not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) no Owner shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

(c) each Owner shall make all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) no Owner shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

13.13 Alteration to terms of insurances. The Borrower shall procure that no Owner shall either make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee.

13.14 Settlement of claims. The Borrower shall procure that no Owner shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

13.15 Provision of copies of communications. The Borrower shall procure that each Owner shall provide the Security Trustee, at the time of each such communication, copies of all written communications between that Owner and:

(a) the approved brokers; and

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Owner's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Owner and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

13.16 Provision of information. In addition, the Borrower shall procure that each Owner shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 below or dealing with or considering any matters relating to any such insurances

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and the Borrower shall, within a reasonable time following the Security Trustee's written demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a) above.

13.17 Mortgagee's interest and additional peril insurances. The Security Trustee shall be entitled from time to time to effect, maintain and renew all or any of the following insurances in such amounts, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate a mortgagee's interest insurance and a mortgage's interest additional perils (pollution) insurance, each in an amount, when aggregated with the amount for which all other Mortgaged Ships (but after deducting, at all times after the date on which the Agent is satisfied that the Borrower has complied with its obligations under Clause 11.20 and the Security Interests contemplated thereunder has been registered and/or granted, less the Existing Loan) at that time are insured pursuant to this Clause 13.17, equal to 110 per cent. of the aggregate of (i) the Loan, (ii) the Existing Loan and (iii) any Swap Exposure, and the Borrower shall, upon demand, fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

13.18 Review of insurance requirements. The Security Trustee shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Majority Lenders, significant and capable of affecting the Owners or the Ships and their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Owners may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrower.

13.19 Modification of insurance requirements. The Security Trustee shall notify the Borrower of any proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Majority Lenders, acting upon the advice of their insurance consultants, consider appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 13 and shall bind the Borrower accordingly.

13.20 Compliance with mortgagee's instructions. The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require any Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Owner of that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.19.

14 SHIP COVENANTS

14.1 General. The Borrower also undertakes with each Creditor Party to procure that each Owner shall comply with the following provisions of this Clause 14 at all times during the Security Period (in the case of "AURORA", after it has been delivered to Star A in accordance with the MOA) except as the Agent, with the authority of the Majority Lenders, may otherwise permit.

14.2 Ship's name and registration. The Borrower shall procure that each Owner shall:

(a) keep the Ship owned by it registered in its ownership under an Approved Flag;

(b) not change the name or port of registry of any Ship; and

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(c) not do or allow to be done anything as a result of which such registration might be cancelled or imperilled.

14.3 Repair and classification. The Borrower shall procure that each Owner shall keep the Ship owned by it in a good and safe condition and state of repair:

(a) consistent with first-class ship ownership and management practice;

(b) so as to maintain the highest class with a first-class classification society which is a member of IACS acceptable to the Agent free of overdue recommendations and conditions of such classification society; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the relevant Approved Flag State or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code, the ISPS Code, the ISM Code Documentation and the ISPS Code Documentation.

14.4 Classification society undertaking. The Borrower shall procure that each Owner shall instruct the classification society referred to in Clause 14.3(b) (and procure that the classification society undertakes with the Security Trustee):

(a) to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the classification society in relation to the Ship owned by the applicable Owner;

(b) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of the applicable Owner and its Ship at the offices of the classification society and to take copies of them;

(c) to notify the Security Trustee immediately in writing if the classification society:

(i) receives notification from the applicable Owner or any person that the relevant Ship's classification society is to be changed; or

(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship's class under the rules or terms and conditions of the Owner's or the Ship's membership of the classification society;

(d) following receipt of a written request from the Security Trustee:

(i) to confirm that each Owner is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or

(ii) if an Owner is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.

14.5 Modification. The Borrower shall procure that no Owner shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on her which would or might materially alter the structure, type or performance characteristics of the Ship or materially reduce her value.

14.6 Removal of parts. The Borrower shall procure that no Owner shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the

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part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on that Ship the property of the relevant Owner and subject to the security constituted by the Mortgage and if applicable, the Deed of Covenant, relative to that Ship Provided that each Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.

14.7 Surveys. The Borrower shall procure that each Owner shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Majority Lenders, provide the Security Trustee (at the expense of the Borrower) with copies of all survey reports.

14.8 Inspection. The Borrower shall procure that each Owner shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. All fees and expenses incurred in relation to the appointment of surveyors shall be for the account of the Borrower.

14.9 Prevention of and release from arrest. The Borrower shall procure that each Owner shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, her Earnings or her Insurances;

(b) all taxes, dues and other amounts charged in respect of the Ship, her Earnings or her Insurances; and

(c) all other outgoings whatsoever in respect of the Ship, her Earnings or her Insurances

and, forthwith upon receiving notice of the arrest of the Ship, or of her detention in exercise or purported exercise of any lien or claim, the relevant Owner shall procure her release by providing bail or otherwise as the circumstances may require.

14.10 Compliance with laws etc. The Borrower shall procure that each Owner and each Approved Manager shall:

(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by the relevant Owner, its ownership, operation and management or to the business of that Owner;

(b) not employ the relevant Ship nor allow her employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the relevant Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the Owner thereof has (at its expense) effected any special, additional or modified insurance cover required for it to enter or trade to any war zone.

14.11 Provision of information. The Borrower shall procure that each Owner shall promptly provide the Security Trustee with any information which the Security Trustee request regarding:

(a) the Ship owned by it, her employment, position and engagements;

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(b) the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;

(d) any towages and salvages;

(e) its compliance or the compliance of the relevant Ship with the ISM Code and the ISPS Code,

and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship and of any current charter guarantee, and copies of the ISM Code Documentation and the ISPS Code Documentation.

14.12 Notification of certain events. The Borrower shall procure that each Owner shall immediately notify the Security Trustee by letter of:

(a) any casualty which is or is likely to be or to become a Major Casualty;

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

(c) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

(d) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or her Earnings or any requisition of that Ship for hire;

(e) any intended dry docking of that Ship;

(f) any Environmental Claim made against that Owner or in connection with the Ship owned by it, or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against an Owner, each Approved Manager or otherwise in connection with a Ship; or

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

and the Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of the Owners', each Approved Manager's or any other person's response to any of those events or matters.

14.13 Restrictions on chartering, appointment of managers etc. The Borrower shall procure that no Owner shall:

(a) let the Ship owned by it on demise charter for any period;

(b) other than pursuant to the relevant Initial Charterparty or Future Charterparty, enter into any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

(c) change the terms on which the Ship owned by it is employed or the identity of the person by whom that Ship is employed;

(d) enter into any charter in relation to the Ship owned by it under which more than 2 months' hire (or the equivalent) is payable in advance;

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(e) charter the Ship owned by it otherwise than on bona fide arm's length terms at the time when that Ship is fixed;

(f) appoint a manager of the Ship owned by it other than an Approved Manager or agree to any alteration to the terms of an Approved Manager's appointment;

(g) de-activate or lay up the Ship owned by it; or

(h) put the Ship owned by it into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed $250,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise.

14.14 Notice of Mortgage. The Borrower shall procure that each Owner shall keep the Mortgage applicable to the Ship owned by it registered against that Ship as a valid first priority or preferred mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Owner to the Security Trustee.

14.15 Sharing of Earnings. The Borrower shall procure that no Owner shall:

(a) enter into any agreement or arrangement for the sharing of any Earnings;

(b) enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Owner to any Earnings; or

(c) enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings.

14.16 Charterparty Assignment. If any Owner enters into any Future Charterparty in respect of its Ship, the Borrower shall procure that the relevant Owner shall execute in favour of the Security Trustee a Charterparty Assignment in respect of that Charterparty, and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 4, Part A as the Agent may require.

15 SECURITY COVER

15.1 Provision of additional security cover; prepayment of Loan. The Borrower undertakes with each Creditor Party that if the Agent notifies the Borrower that:

(a) the Market Value of "AURORA"; plus

(b) the net realisable value of any additional security previously provided under this Clause 15;

is below an amount equal to 135 per cent. of the aggregate of (i) the Loan and (ii) any Swap Exposure, the Borrower will, within 14 days after the date on which the Agent's notice is served, either:

(i) provide, or ensure that a third party provides, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which, if it consists of or includes a Security Interest, covers such asset or assets and is documented in such terms as the Agent may, with authorisation from the Majority Lenders, approve or require; or

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(ii) prepay in accordance with Clause 8 such part (at least) of the Loan as will eliminate the shortfall.

15.2 Meaning of additional security. In Clause 15.1 "security" means a Security Interest over an asset or assets (including, without limitation a vessel (other than "AURORA")) (whether securing the Borrower's liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit, cash deposit or other security in respect of the Borrower's liabilities under the Finance Documents.

15.3 Requirement for additional documents. The Borrower shall not be deemed to have complied with Clause 15.1 (i) above until the Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 3, 4 and 5 of Schedule 4, Part A and such legal opinions in terms acceptable to the Majority Lenders from such lawyers as they may select.

15.4 Valuation of Ship. The market value of a Ship at any date is that shown by valuation of that Ship prepared:

(a) as at a date not more than 15 days previously;

(b) by an independent ship sale and purchase broker appointed by the Agent;

(c) with or without physical inspection of the Ship (as the Agent may require);

(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and

(e) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

15.5 Value of additional security. The net realisable value of any additional security which is provided under Clause 15.1 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.4.

15.6 Valuations binding. Any valuation under Clause 15.1(i), 15.4 or 15.5 shall be binding and conclusive as regards the Borrower (save in the case of manifest error) as shall be any valuation which the Majority Lenders make of a security which does not consist of or include a Security Interest.

15.7 Provision of information. The Borrower shall promptly provide the Agent and any independent ship sale and purchase broker or expert acting under Clause 15.4 or 15.5 with any information which the Agent or broker or expert may request for the purposes of the valuation; and, if the Borrower fails to provide the information within 3 Business Days following such request, the valuation may be made on any basis and assumptions which the independent ship sale and purchase broker or the Majority Lenders (or the expert appointed by them) consider prudent.

15.8 Payment of valuation expenses. Without prejudice to the generality of the Borrower's obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of the broker instructed by the Agent under this Clause .

16 PAYMENTS AND CALCULATIONS

16.1 Currency and method of payments. All payments to be made:

(a) by the Lenders to the Agent; or

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(b) by the Borrower to the Agent, the Security Trustee or any Lender

under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(i) by not later than 11.00 a.m. (New York City time) on the due date;

(ii) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(iii) if in Dollars, to the account of the Agent at Commerzbank AG, New York Branch (account number 938026262; SWIFT Code: COBADEFP208 under reference Star Aurora LLC - US$26 million facility, or to such other account with such other bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and

(iv) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.

16.2 Payment on non-Business Day. If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

16.3 Basis for calculation of periodic payments. All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

16.4 Distribution of payments to Creditor Parties. Subject to Clauses 16.5, 16.6 and 16.7:

(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Swap Bank or the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders or the Swap Bank generally shall be distributed by the Agent to each Lender or the Swap Bank pro rata to the amount in that category which is due to it.

16.5 Permitted deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or the Swap Bank, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or the Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or the Swap Bank to pay on demand.

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16.6 Agent only obliged to pay when monies received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender or the Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender or the Swap Bank until the Agent has satisfied itself that it has received that sum.

16.7 Refund to Agent of monies not received. If and to the extent that the Agent makes available a sum to the Borrower or a Lender or the Swap Bank, without first having received that sum, the Borrower or (as the case may be) the Lender or the Swap Bank concerned shall, on demand:

(a) refund the sum in full to the Agent; and

(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

16.8 Agent may assume receipt. Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

16.9 Creditor Party accounts. Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

16.10 Agent's memorandum account. The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

16.11 Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor Party.

17 APPLICATION OF RECEIPTS

17.1 Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents and the Master Agreement in the following order and proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at paragraphs (ii) and (iii) (including, but without limitation, all amounts payable by the Borrower under Clauses 20, 21 and 22 of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document);

(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression "interest" shall include any net amount which the Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to

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the relevant Swap Bank at the time of application or distribution under this Clause 17); and

(iii) thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure of the Swap Bank (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder with the Borrower being the Defaulting Party);

(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document or the Master Agreement but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a); and

(c) THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

17.2 Variation of order of application. The Agent may, with the authorisation of the Majority Lenders and the Swap Bank by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.3 Notice of variation of order of application. The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

17.4 Appropriation rights overridden. This Clause 17 and any notice which the Agent gives under Clause 17.3 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

18 APPLICATION OF EARNINGS

18.1 Payment of Earnings. The Borrower undertakes with each Creditor Party to ensure that throughout the Security Period (subject only to provisions of the relevant General Assignment), all the Earnings of each Ship are paid to the Earnings Account for that Ship.

18.2 Location of accounts. The Borrower shall promptly:

(a) comply, and ensure that each Owner complies, with any requirement of the Agent as to the location or re-location of its Earnings Account;

(b) execute, and ensure that each Owner executes, any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) its Earnings Account.

18.3 Debits for expenses etc. The Agent shall be authorised by the Borrower (but not obliged) from time to time to debit the Earnings Account in respect of "AURORA" without prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.

18.4 Borrower's obligations unaffected. The provisions of this Clause 18 do not affect:

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(a) the liability of the Borrower to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrower or any Security Party under any Finance Document.

19 EVENTS OF DEFAULT

19.1 Events of Default. An Event of Default occurs if:

(a) the Borrower or any Security Party fails to pay when due or (if so payable) on demand within 2 Business Days of such demand any sum payable under a Finance Document or under any document relating to a Finance Document unless such failure is due to a bank payment transmission error; or

(b) any breach occurs of Clause 9.2, 11.2, 11.3, 11.17, 12.2, 12.3, 12.4, 12.5, 13.2, 15.1 or 18.1;or

(c) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b) above) if, in the opinion of the Majority Lenders, such default is capable of remedy, and such default continues unremedied 10 Business Days after written notice from the Agent requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b) or (c) above); or

(e) any representation, warranty or statement made by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (exceeding, in the case of the Borrower, $1,000,000 in aggregate (or the equivalent in any other currency)):

(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

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(i) a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or

(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

(v) a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person; or

(vi) a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or

(vii) any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi) above; or

(viii) in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Majority Lenders, is similar to any of the foregoing; or

(h) the Borrower or any Security Party ceases or suspends carrying on or changes the nature of its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

(ii) for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(j) any consent necessary to enable any Owner to own, operate or charter a Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

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(k) without the prior consent of the Agent (acting upon the instructions of the Majority Lenders), Mr. Prokopios Tsirigakis ceases to be, at any time during the Security Period, the Chief Executive Officer of the Borrower; or

(l) without the prior consent of the Agent (acting upon the instructions of the Majority Lenders), Mr. Petros Pappas ceases to be, at any time during the Security Period, the Non-Executive Co-Chairman of the Borrower; or

(m) without the prior written consent of the Majority Lenders, a change has occurred after the date of this Agreement in the ownership of any of the shares in any Owner or in the ultimate control of the voting rights attaching to any of those shares; or

(n) any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(o) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(p) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of the Borrower or any Security Party; or

(ii) any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person;

in the light of which the Majority Lenders consider that there is a significant risk that the Borrower or any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due; or

(q) the Master Agreement is terminated, cancelled, suspended, rescinded, or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Agent, acting with the authorisation of the Majority Lenders.

19.2 Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default:

(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(i) serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are terminated; and/or

(ii) serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately clue and payable or are due and payable on demand; and/or

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii) above, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorization of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii) above, the

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Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.

19.3 Termination of Commitments. On the service of a notice under paragraph (a)(i) of Clause 19.2, the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall terminate.

19.4 Acceleration of Loan. On the service of a notice under paragraph (a)(ii) of Clause 19.2, the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

19.5 Multiple notices; action without notice. The Agent may serve notices under paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

19.6 Notification of Creditor Parties and Security Parties. The Agent shall send to each Lender, the Security Trustee and each Security Party a copy of the text of any notice which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy of the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.

19.7 Lender's rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

19.8 Exclusion of Creditor Party Liability. No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset;

except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been caused by the gross negligence or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

19.9 Relevant Persons. In this Clause 19 "a Relevant Person" means the Borrower, a Security Party and any other member of the Group (but excluding any company which is dormant and the value of whose gross assets is $50,000 or less).

19.10 Interpretation. In Clause 19.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(g) "petition" includes an application.

19.11 Position of the Swap Bank. Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of the Swap Bank except to the extent that the Swap Bank is also a Lender.

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20 FEES AND EXPENSES

20.1 Arrangement and commitment fees. The Borrower:

(a) has paid on 13 August 2010 a non-refundable arrangement fee of $130,000 (being an amount equal to 0.50 per cent. of the maximum amount of the Loan); and

(b) shall pay to the Agent a commitment fee for distribution among the Lenders pro rata to their Commitments at the rate of 0.75 per cent. per annum on the undrawn amount of the Total Commitments from (and including) 31 July 2010 to and including the earlier of (A) the Drawdown Date and (B) the last day of the Availability Period, such fee to be paid quarterly in arrears and on the last day of such period.

20.2 Costs of negotiation, preparation etc. The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Lenders, the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document (including, without limitation, any legal fees or expenses).

20.3 Costs of variations, amendments, enforcement etc. The Borrower shall pay to the Agent, on the Agent's demand, the amount of all expenses (including, without limitation, any legal fees or expenses) incurred by a Lender in connection with:

(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(b) any consent or waiver by the Lenders, the Majority Lenders or the Lender concerned or the Swap Bank under or in connection with a Finance Document, or any request for such a consent or waiver;

(c) the valuation of any security provided or offered under Clause 15.8 or any other matter relating to such security;

(d) such circumstances where the Agent, in its absolute opinion, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of that Ship pursuant to Clause 13.18;

(e) any step taken by the Lender concerned or the Swap Bank with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (e) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

20.4 Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any liabilities and expenses resulting from any failure or delay by the Borrower to pay such a tax.

20.5 Certification of amounts. A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

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21 INDEMNITIES

21.1 Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify the Agent and each Lender on the Agent's demand, the Security Trustee on its demand and the Swap Bank on its demand in respect of all expenses, liabilities and losses which are incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7);

(d) the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19;

and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document,

21.2 Breakage costs. Without limiting its generality, Clause 21.1 covers any liability, expense or loss, including a loss of a prospective profit, incurred by a Lender or the Swap Bank

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

(b) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned and the Swap Bank), including, but not limited to, any Designated Transaction, to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

21.3 Miscellaneous indemnities. The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind ("liability items") which may be made or brought against, or incurred by, the relevant Creditor Party, in any country, in relation to:

(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;

(b) any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document;

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other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of a Creditor Party's officers or employees.

Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

21.4 Extension of indemnities; environmental indemnity. Without prejudice to its generality, Clause 21.3 covers:

(a) any matter which would be covered by Clause 21.3 if any of the references in that Clause to a Lender or, as the case may be, the Swap Bank, were a reference to the Agent or (as the case may be) to the Security Trustee; and

(b) any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment.

21.5 Currency indemnity. If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

(a) making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment;

the Borrower shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 21.5, the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (Hamburg time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 21.5 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

21.6 Certification of amounts. A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

21.7 Sums deemed due to a Lender. For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

21.8 Application to Master Agreement. For the avoidance of doubt, Clause 21.5 does not apply in respect of sums due from the Borrower to the Swap Bank under or in connection with the Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of the Master Agreement shall apply.

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22 NO SET-OFF OR TAX DEDUCTION

22.1 No deductions. All amounts due from the Borrower under a Finance Document shall be paid:

(a) without any form of set-off, cross-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

22.2 Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any payment:

(a) the Borrower shall notify the Agent as soon as it becomes aware of the requirement;

(b) the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

22.3 Evidence of payment of taxes. Within 1 month after making any tax deduction, the Borrower concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

22.4 Exclusion of tax on overall net income. In this Clause 22 "tax deduction" means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income.

22.5 Application to the Master Agreement. For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrower to the Swap Bank under or in connection with the Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.

23 ILLEGALITY, ETC

23.1 Illegality. This Clause 23 applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation,

for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

23.2 Notification of illegality. The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.

23.3 Prepayment; termination of Commitment. On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date

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on which the notified event would become effective the Borrower shall prepay the Notifying Lender's Contribution in accordance with Clause 8.

23.4 Mitigation. If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office, third party or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a) have an adverse effect on its business, operations or financial condition; or

(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

24 INCREASED COSTS.

24.1 Increased costs.  This Clause 24 applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender considers that as a result of

(a) the introduction or alteration after the date of this Agreement of a law or regulation or an alteration after the date of this Agreement in the manner in which a law or regulation is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Notifying Lender's overall net income); or

(b) the effect of complying with any law or regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement (including, without limitation, any laws or regulations which shall replace, amend and/or supplement those set out in the statement of the Basle Committee on Banking Regulations and Supervisory Practices dated July 1988 and entitled "International Convergence of Capital Management and Capital Structures")) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,

is that the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost", that is to say:

(i) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; or

(ii) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

(iii) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(iv) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

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but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22.

For the purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

24.2 Notification to Borrower of claim for increased costs. The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.

24.3 Payment of increased costs. The Borrower shall pay to the Agent, at the end of any Interest Period during which the Agent makes demand, for the account of the Notifying Lender, the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

24.4 Notice of prepayment. If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, the Borrower may give the Agent not less than 14 days' notice of its intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

24.5 Prepayment; termination of Commitment. A notice under Clause 24.4 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower's notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the applicable Margin.

24.6 Application of prepayment. Clause 8 shall apply in relation to the prepayment.

25 SET-OFF

25.1 Application of credit balances, Each Creditor Party may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars;

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

25.2 Existing rights unaffected. No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to

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any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

25.3 Sums deemed due to a Lender. For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

26 TRANSFERS AND CHANGES IN LENDING OFFICES

26.1 Transfer by Borrower. The Borrower may not, without the consent of the Agent, given on the instructions of all the Lenders:

(a) transfer any of its rights or obligations under any Finance Document; or

(b) enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.

26.2 Transfer by a Lender. Subject to Clause 26.5, a Lender (the "Transferor Lender") may, with the prior consent of the Agent, at any time cause:

(a) its rights in respect of all or part of its Contribution; or

(b) its obligations in respect of all or part of its Commitment; or

(c) a combination of (a) and (b)

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank, financial institution or any other third party (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.

26.3 Transfer Certificate, delivery and notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the Lenders;

(b) on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above.

26.4 Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 on or before that date.

26.5 No transfer without Transfer Certificate. No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation

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to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

26.6 Lender re-organisation; waiver of Transfer Certificate. However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the successor shall automatically and without any further act being necessary become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

26.7 Effect of Transfer Certificate. A Transfer Certificate takes effect in accordance with English law as follows:

(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;

(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender (or the part thereof specified in the Transfer Certificate) and a Commitment of an amount specified in the Transfer Certificate;

(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;

(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.5 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

26.8 Maintenance of register of Lenders. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by

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any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 5 Business Days prior notice.

26.9 Reliance on register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

26.10 Authorisation of Agent to sign Transfer Certificates. The Borrower, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

26.11 Registration fee. In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $2,000 from the Transferor Lender or (at the Agent's option) the Transferee Lender.

26.12 Sub-participation; subrogation assignment. A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

26.13 Disclosure of information. A Lender may disclose to a potential Transferee Lender or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

26.14 Change of lending office. A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26.15 Notification. On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

26.16 Master Agreement For the avoidance of doubt Clause 26 does not apply to a transfer of Swap Bank's rights or obligations under the Master Agreement.

27 VARIATIONS AND WAIVERS

27.1 Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

27.2 Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender and the Swap Bank":

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(a) a change in the Margin or in the definition of LIBOR;

(b) a change to the date for, or the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;

(c) a change to any Lender's Commitment;

(d) an extension of the Availability Period;

(e) a change to the definition of "Majority Lenders" or "Finance Documents";

(f) a change to the preamble or to Clause 2, 3, 4, 5.1, 8.1, 8.2, 17, 18, 19 or 30;

(g) a change to this Clause 27;

(h) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

(i) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's or, as the case may be, the Swap Bank's consent is required.

27.3 Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law;

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

28 NOTICES

28.1 General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by registered letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

28.2 Addresses for communications. A notice shall be sent:

(a) to the Borrower: 7 Fragoklisias 151 25 Maroussi Athens Greece   Fax No: +30 210 61 78 378

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Attn: the Chief Financial Officer

(b)	to a Lender:	At the address opposite its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate
(c)	to the Agent and/or  Security Trustee:	Commerzbank AG Domstraf3e 18 20095 Hamburg Germany Fax No: +(49) 40 37699 649 Attn: Claas Ringleben/Carlo Glaeser
(d)	to the Swap Bank	Commerzbank AG Credit Risk Financial Institutions & Special Products Exposure Management Kaiserstrasse 16 60621 Frankfurt am Main Germany Telex No. 41552530 Answerback: CBD SWIFT Code: COBADEFFXXX Tel. No: +49 69 1 36-45844 Attn: CR-FISP Exposure Management With a copy to: Group Legal Kaiserstrasse 16 60621 Frankfurt am Main Germany Fax No.: +49 69 1 36-270 74 Tel. No: +49 69 1 36-25830 Attn: Group Legal

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders, and the Security Parties,

28.3 Effective date of notices. Subject to Clauses 28.4 and 28.5:

(a) a notice which is delivered personally shall be deemed to be served, and shall take effect, at the time when it is delivered;

(b) a notice which is delivered by registered letter shall be deemed to be served, and shall take effect, 5 Business Days after being deposited in the post postage prepaid in an envelope addressed to it at the relevant address; and

(c) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

28.4 Service outside business hours. However, if under Clause 28.3 a notice would be deemed to be served:

(a) on a day which is not a business day in the place of receipt; or

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(b) on such a business day, but after 5 p.m. local time;

the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

28.5 Illegible notices. Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within one hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

28.6 Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

28.7 English language. Any notice under or in connection with a Finance Document shall be in English.

28.8 Meaning of "notice". In this Clause "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

28.9 Electronic communication

(a) Any communication to be made between the Agent or the Security Trustee and a Lender or the Swap Bank under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent, the Security Trustee and the relevant Lender or the Swap Bank:

(i) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(ii) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(iii) notify each other of any change to their address or any other such information supplied by them.

(b) Any electronic communication made between the Agent and a Lender or the Security Trustee or the Swap Bank will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender or the Swap Bank to the Agent or the Security Trustee only if it is addressed in such a manner as the Agent or Security Trustee shall specify for this purpose.

29 SUPPLEMENTAL

29.1 Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to each Creditor Party are:

(a) cumulative;

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(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

29.2 Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

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

29.4 Counterparts. A Finance Document may be executed in any number of counterparts.

30 LAW AND JURISDICTION

30.1 English law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

30.2 Exclusive English jurisdiction. Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any Disputes.

30.3 Choice of forum for the exclusive benefit of the Creditor Parties. Clause 30.2 is for the exclusive benefit of the Creditor Parties, which reserves the right:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

30.4 Process agent. The Borrower irrevocably appoints Eurofin International Ltd, whose present address is Chelsea Harbour, London SW10 OXD, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

30.5 Creditor Party's rights unaffected. Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

30.6 Meaning of "proceedings". In this Clause 30, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure and a "Dispute" means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any new contractual obligation arising out of or in connection with this Agreement.

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year first before written.

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SCHEDULE I

LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment (US Dollars)
Commerzbank AG	DomstraBe 18 20095 Hamburg German	26,000,000

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SCHEDULE 2

DETAILS OF CHARTERPARTIES

Ship	Hire Rate($/day)		Estimated/Actual Delivery Date	Charter Period (months)	Charterer
"STAR AURORA"		27,500	(est) September 2010	35 to 37 months	Rio Tinto Shipping(Asia) Pte Ltd
"STAR GAMMA"		38,000	Delivered on 27 January 2009	35 to 37 months	Korea Line Corp.
"STAR DELTA"		14,000	Delivered on 7 February 2009	20 ton 24 months	Global Maritime Investments Inc.
"STAR EPSILON"		16,000	Delivered on 22 November 2009	11 to 13 months	Cargill International S.A.
"STAR ZETA"		42,500	Delivered on 24 May	35 to 37 months	Dampskibsselskabelt Norden S.A.
"STAR THETA"		19,000	Delivered on 9 June	16 to 18 months	Cargill International S.A.

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SCHEDULE 3

DRAWDOWN NOTICE

To: Commerzbank AG Domstraße 18 Hamburg Germany

 Attention: Loans Administration   [•] 2010

DRAWDOWN NOTICE

1. We refer to the loan agreement (the "Loan Agreement") dated [•] 2010 and made between ourselves as Borrower, the Lenders referred to therein, yourselves as Agent, Swap Bank and as Security Trustee and in connection with a term loan facility of up to US$26,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2. We request to borrow the Loan to finance part of the acquisition cost of "AURORA" as follows:

(a) Amount of Loan: $[26,000,000];

(b) Drawdown Date: [•] 2010;

(c) Duration of the first Interest Period shall be [•] months;

(d) Payment instructions: account of [•] and numbered [•] with [•] of [•].

3.           We represent and warrant that:

(a) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and

(b) no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.

4.           This notice cannot be revoked without the prior consent of the Majority Lenders.

5. We authorise you to deduct any outstanding fees referred to in Clause 20.1 from the amount of the Loan.

[Attorney-in-Fact][Director]

for and on behalf of

STAR BULK CARRIERS CORP

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SCHEDULE 4

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a).

1.           A duly executed original of each of:

(a) this Agreement;

(b) the Agency and Trust Deed;

(c) the Master Agreement;

(d) the Master Agreement Assignment in respect of "AURORA";

(e) the Guarantee in respect of Star A;

(f) the Shares Pledge Option Agreement; and

(g) the Earnings Account Pledge in respect of Star A.

2. Copies of the certificate of incorporation and constitutional documents of the Borrower and each Owner.

3. Copies of resolutions of the directors and shareholders of each Owner and the directors of the Borrower authorising the execution of each of the Finance Documents to which each is a party and, in the case of the Borrower, authorising named officers to serve the Drawdown Notice and any other notice under this Agreement.

4. The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower or any Security Party.

5. Copies of all consents which the Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document and, in the case of the Borrower, the MOA.

6. The originals of any mandates or other documents required in connection with the opening or operation of the each Earnings Account including, but not limited to, the Bank's "Account Operating Documentation".

7. Evidence satisfactory to the Agent that each Owner is a direct or indirect wholly-owned subsidiary of the Borrower.

8. A copy of the MOA and of all documents signed or issued by the parties thereto under or in connection with it.

9. Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution of the MOA and all documents to be executed by the parties thereto under the MOA.

10. A copy of the Management Agreement in respect of "AURORA".

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11. A survey report in respect of "AURORA" addressed to the Agent from an independent marine surveyor approved by the Agent (acting on the instructions of the Majority Lenders) in respect of the physical condition of that Ship or any other report acceptable to the Agent (acting on the instructions of the Majority Lenders) in respect of the physical condition of that Ship.

12. Evidence satisfactory to the Agent that the Required Amount is credited in the Cash Collateral Account pursuant to Clause 12.4.

13. All documentation required by each Creditor Party in relation to the Borrower and any Security Party pursuant to that Creditor Party's "know your customer" requirements.

14. Documentary evidence that the agent for service of process named in Clause 30 has been appointed.

15. Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands or, as the case may be, any other Approved Flag State and such other relevant jurisdictions as the Agent may require.

16. If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

PART B

The following are the documents referred to in Clause 9.1(b).

1. A copy of the Initial Charterparty in relation to each Ship and of all documents signed or issued by the parties thereto under or in connection with that Initial Charterparty.

2. A duly executed original of the Mortgage, the General Assignment, the Management Agreement Assignment and the Charterparty Assignment relating to "AURORA" (and of each document to be delivered under each of them).

3. Documentary evidence that:

(a) "AURORA" has been unconditionally delivered by the Seller to and accepted by, the Borrower under the MOA and the Contract Price has been duly paid, together with a copy of the bill of sale and the other documents delivered by the Seller thereunder;

(b) "AURORA"is definitively and permanently registered in the name of its Owner under an Approved Flag;

(c) "AURORA" is in the absolute and unencumbered ownership of its Owner, save as contemplated by the Finance Documents;

(d) "AURORA"maintains the highest available class with a first-class classification society which is a member of IACS as the Agent may approve free of all overdue recommendations and conditions of such classification society;

(e) the Mortgage in respect of "AURORA" has been duly registered against that Ship as a valid first priority or preferred ship mortgage in accordance with the laws of the relevant Approved Flag State;

(f) "AURORA" is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and

4. A duly executed original of each Manager's Undertaking in relation to each Ship.

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5. Copies of:

(a) the document of compliance (DOC) and safety management certificate (SMC) referred to in paragraph (a) of the definition of the ISM Code Documentation and the ISSC in respect of "AURORA" and the relevant Approved Manager certified as true and in effect by the relevant Owner; and

(b) the ISPS Code Documentation in respect of "AURORA" and the Owner thereof certified as true and in effect by the relevant Owner.

6 A valuation (at the cost of the Borrower) in respect of "AURORA", addressed to the Agent, stated to be for the purpose of this Agreement and dated not earlier than 15 days before the Drawdown Date from an independent sale and purchase shipbroker appointed by the Agent to be prepared in accordance with Clause 15.4.

7 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Marshall Islands and such other relevant jurisdictions as the Agent may require.

8 A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances of "AURORA" as the Agent may require.

9 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

Every other copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or any other person acceptable to the Agent in its sole discretion.

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SCHEDULE 5

TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To: Commerzbank AG for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below.

[                         ]

1 This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [•] 2010 and made between (1) Star Bulk Carriers Corp. as borrower (the "Borrower"), (2) the banks and financial institutions named therein as Lenders, (3) Commerzbank AG as Agent, (4) Commerzbank AG as Security Trustee and (5) Commerzbank AG as Swap Bank in respect of a term loan facility of up to US$26,000,000.

2 In this Certificate:

"the Relevant Parties" means the Agent, the Borrower, each Security Party, the Security Trustee, the Swap Bank and each Lender;

"the Transferor" means [full name] of [lending office];

"the Transferee" means [full name] of [lending office].

Terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate.

3 The effective date of this Certificate is [[•] 200[•]   Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4 The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [ ] per cent. of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:

Contribution Amount transferred

5 By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[•]] [from [•] per cent. of its Commitment, which percentage represents $[•]] and the Transferee acquires a Commitment of $[•].

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6 The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (for the avoidance of doubt, save for the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

7 The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

8 The Transferor:

(a) warrants to the Transferee and each Relevant Party:

(i) that the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and

(ii) that this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above;

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

9           The Transferee:

(a) confirms that it has received a copy of the Loan Agreement and each other Finance Document;

(b) agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, the Swap Bank or any Lender in the event that:

(i) the Finance Documents prove to be invalid or ineffective,

(ii) the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under the Finance Documents;

(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document , or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or any Security Party under the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, the Swap Bank or any Lender in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party (i) that it has full capacity to enter into this transaction and has taken all corporate action and obtained all official consents which it needs to take or obtain in connection with this transaction; and (ii) that this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

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10 The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

11 The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 11 above as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

[Name of Transferor]	[Name of Transferee]
By:	By:
Date:	Date:

Agent

Signed for itself and for and on behalf of itself

as Agent and for every other Relevant Party

COMMERZBANK AG

By:

Date:

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Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person

(Loan Administration Department):

Telephone: Telex:

Fax:

Contact Person

(Credit Administration Department):

Telephone:

Telex:

Fax:

Account for payments:

Note:  This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.

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SCHEDULE 7

FORM OF COMPLIANCE CERTIFICATE

To: Commerzbank AG DomstraBe 18 Hamburg Germany

[•] 200[•]

Dear Sirs,

We refer to a loan agreement dated [•] 2010 (the "Loan Agreement") made between (amongst others) yourselves and ourselves in relation to a term loan facility of up to $26,000,000.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.

We enclose with this certificate a copy of the [audited]/[unaudited] consolidated accounts for the Group for the [financial year] [6-month period] ended [•]. The accounts (i) have been prepared in accordance with all applicable laws and GAAP all consistently applied, (ii) give a true and fair view of the state of affairs of the Group at the date of the accounts and of its profit for the period to which the accounts relate and (iii) fully disclose or provide for all significant liabilities of the Group.

We also enclose copies of the valuations of all the Fleet Vessels which were used for the purpose of calculating the Market Value Adjusted Equity Ratio as at [•].

The Borrower represents that no Event of Default or Potential Event of Default has occurred as at the date of this certificate [except for the following matter or event [set out all material details of matter or event]]. In addition as of [•], the Borrower confirms compliance with the financial covenants set out in Clause 12.5 of the Loan Agreement for the 3 months ending as of the date to which the enclosed accounts are prepared.

We now certify that, as at [•]:

(a) the Market Value Adjusted Equity Ratio is [•] per cent.; and

(b) the Liquid Funds are $[•],

as shown in the attached calculation sheets.

This certificate shall be governed by, and construed in accordance with, English law.

________________________

[•]

Chief Financial Officer of

STAR BULK CARRIERS CORP.

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EXECUTION PAGE

BORROWER
SIGNED by George Syllantavos	)	/s/ George Syllantavos
for and on behalf of	)
STAR BULK CARRIERS CORP.	)

LENDERS
SIGNED by Maria-Chrysoula Karpida	)	/s/ Maria-Chrysoula Karpida
for and on behalf of	)
COMMERZBANK AG	)

AGENT
SIGNED by Maria-Chrysoula Karpida	)	/s/ Maria-Chrysoula Karpida
for and on behalf of	)
COMMERZBANK AG	)

SECURITY TRUSTEE
SIGNED by Maria-Chrysoula Karpida	)	/s/ Maria-Chrysoula Karpida
for and on behalf of	)
COMMERZBANK AG	)

SWAP BANK
SIGNED by Maria-Chrysoula Karpida	)	/s/ Maria-Chrysoula Karpida
for and on behalf of	)
COMMERZBANK AG	)

Witness to all the Above signature		) )
Name:	Chrisoforos Bismpikos		/s/ Chrisoforos Bismpikos
	Solicitor
Address	Watson Farley & Williams
	89 Akti Misouli
	Piraeus 185 38
	Greece

SK 99999 0010 1183732

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EX-4.19

Exhibit 4.19

Date 20 January 2011

STAR BULK CARRIERS CORP.

as Borrower

-and –

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Lender

LOAN AGREEMENT

relating to a US$70,000,000 term loan facility to provide pre and post delivery finance in respect of the construction and acquisition of two Capesize bulk carriers having builder’s Hull nos. PN063 and PN064, currently under construction in Philippines by Hhic-Phil Inc., a subsidiary of Hanjin Heavy Industries, Korea

WATSON, FARLEY & WILLIAMS

Piraeus

INDEX

Clause		Page
1	INTERPRETATION	1
2	FACILITY	16
3	DRAWDOWN	17
4	INTEREST	18
5	INTEREST PERIODS	19
6	DEFAULT INTEREST	20
7	REPAYMENT AND PREPAYMENT	21
8	CONDITIONS PRECEDENT	23
9	REPRESENTATIONS AND WARRANTIES	24
10	GENERAL UNDERTAKINGS	26
11	CORPORATE UNDERTAKINGS	30
12	INSURANCE	31
13	SHIP COVENANTS	36
14	SECURITY COVER	40
15	PAYMENTS AND CALCULATIONS	42
16	APPLICATION OF RECEIPTS	42
17	APPLICATION OF EARNINGS	43
18	EVENTS OF DEFAULT	45
19	FEES AND EXPENSES	49
20	INDEMNITIES	50
21	NO SET-OFF OR TAX DEDUCTION	52
22	ILLEGALITY, ETC	52
23	INCREASED COSTS	53
24	SET-OFF	54
25	TRANSFERS AND CHANGES IN LENDING OFFICE	54
26	VARIATIONS AND WAIVERS	55
27	NOTICES	56
28	SUPPLEMENTAL	57
29	LAW AND JURISDICTION	57

THIS AGREEMENT is made on 20 January 2011

BETWEEN

(1) STAR BULK CARRIERS CORP., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, The Marshall Islands (the “Borrower”); and

(2) CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, a French societe anonyme, acting in such capacity having its registered office at 9, quai du President Paul Doumer, 92920 Paris La Defense Cedex, France registered under the SIREN No. 304 187 701 at the Registre du Commerce et des Societes of Nanterre (the “Lender”).

WHEREAS

(A) The Lender has agreed to make available to the Borrower:

(i) pre-delivery term loan facility of up to US$42,720,000 to be made available in four advances for the purpose of financing the whole or, at the case may be, a substantial part of the keel-laying and launching instalments payable by the Borrower or, as the case may be, the Owners to the Builder under two shipbuilding contracts for the construction and acquisition of two Capesize bulk carriers, each of approximately 180,000 metric tons deadweight currently under construction in the Philippines by Hhic-Phil Inc., a subsidiary of Hanjin Heavy Industries, Korea, having builder’s Hull Nos. PN063 and PN064 respectively; and

(ii) a post-delivery term loan facility of up to US$70,000,000 to be divided into two equal advances of US$35,000,000 (one for each of the newbuildings) which shall be made available for the purpose of:

(a) (notionally) refinancing the part of the pre-delivery term loan facility referred to in paragraph (i) above which is applicable to the relevant newbuilding in accordance with the terms of this Agreement;

(b) financing the delivery instalment payable by each Owner under the shipbuilding contract to which it is a party; and

(c) providing the Borrower with additional liquidity for general corporate purposes by using the part (if any) of each such advance which is not used by the Borrower, in accordance with the terms of this Agreement, after the financing or, as the case may be, the refinancing of the items listed in paragraphs (a) and (b) above.

(B) The Borrower may, upon its request, hedge, from time to time, its exposure under this Agreement to interest rate fluctuations by entering into interest rate swap transactions with the Lender pursuant to the Master Agreement (as defined below).

IT IS AGREED as follows:

1           INTERPRETATION

1.1           Definitions. Subject to Clause 1.5, in this Agreement:

“Account” means each of the Earnings Accounts and the Retention Account and, in the plural, means all of them;

“Account Pledge” means, in respect of each Account, a deed or pledge creating security in respect of that Account in the Agreed Form and, in the plural, means all of them;

“Accounting Information” means the annual audited consolidated accounts of the Group referred to in Clause 10.6(a) or, as the context may require, the annual unaudited consolidated accounts of the Group referred to in Clause 10.6(b);

“Advances” means, together, the Predelivery Advances and the Delivery Advances and, in the singular, means any of them;

“Advance A” means each of the Owner A Advance A and the Owner B Advance A and, in the plural, means both of them;

“Advance B” means each of the Owner A Advance B and the Owner B Advance B and, in the plural, means both of them;

“Agreed Form” means in relation to any document, that document in the form approved in writing by the Lender or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document;

“Approved Flag” means the Marshall Islands flag or such other flag as the Lender may approve as the flag on which a Ship is or, as the case may be, shall be registered;

“Approved Flag State” means the Republic of Marshall Islands or any other country in which the Lender may approve that a Ship is or, as the case may be, shall be registered;

“Approved Manager” means, in relation to the:

(a) commercial management of each Ship, Star Bulk Management Inc., a corporation incorporated in the Republic of Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MI-I 96960; and

(b) technical management of each Ship, Star Bulk S.A., a corporation incorporated in Liberia having its registered office at 80 Broad Street, Monrovia, Liberia,

each maintaining an office (in accordance with Greek law 89) at 7 Fragoklisias, 151 25 Maroussi, Athens, Greece or any other company which the Lender may approve from time to time as the commercial and/or technical manager of a Ship and, in the plural, means both of them;

“Asset Cover Ratio” means the ratio of the aggregate of the Market Value of the Mortgaged Ships, at the relevant time, expressed as a percentage of the Loan;

“Availability Period” means the period commencing on the date of this Agreement and ending on:

(a) in relation to, each Tranche, the date falling on the earlier of (A) the Delivery Date in respect of the Ship to which that Tranche relates and (B) 210 days after the Scheduled Deliver Date in respect of that Ship,

(or, in each case, such later date as the Lender may agree with the Borrower); or

(b) if earlier, the date on which the Lender’s obligation to make the Loan is cancelled or terminated;

“Balloon Instalment” has the meaning given to it in Clause 7.1(b)(ii);

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“Builder” means Hhic-Phil Inc., a company incorporated in the Republic of Philippines whose principal office is at Green Beach 1, Redondo Peninsula, Sitio Agushin Brgy, Cawag, Subic Zambales, the Philippines;

“Business Day” means a day on which banks are open in London, Paris, Seoul, Manila, Piraeus and Athens and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

“Charterparty” means, in relation to a Ship, any time charterparty in respect of that Ship of 12 months or more and any guarantee of such charter or other contract of employment in respect of that Ship to be entered into by the Owner of that Ship and a charterer approved in all respects by the Lender in its sole discretion and, in the plural, means all of them;

“Charterparty Assignment” means, in relation to each Ship, the first priority assignment of the rights of the Owner of that Ship under any Charterparty to which that Ship may be subject at any time during the Security Period executed or to be executed by the relevant Owner in favour of the Lender in the Agreed Form and, in the plural, means all of them;

“Compliance Certificate” means a certificate in the form set out in Schedule 3 (or in any other form which the Lender approves or requires in its sole discretion);

“Confirmation” and “Early Termination Date” in relation to any continuing Transaction, have the meanings given in the Master Agreement;

“Contractual Currency” has the meaning given in Clause 20.4;

“Delivery Advance” means, in respect of each Ship:

(a) on the Drawdown Date of the relevant Delivery Advance, an amount of up to the lesser of (i) $35,000,000 and (ii) 65 per cent. of the Initial Market Value of the Ship which is to be financed by that Delivery Advance to be made available to the Borrower for the purpose of

(i) (notionally) refinancing the Predelivery Tranche to which that Ship relates;

(ii) financing the fifth instalment payable under Article X.2(e) of the Shipbuilding Contract to which that Ship relates; and

(iii) providing the Borrower with additional liquidity for general corporate purposes by using the part (if any) of that Delivery Advance which is not used by the Borrower after the financing or, as the case may be, the refinancing of the items listed in paragraphs (i) and (ii) above in accordance with the terms of this Agreement; and

(b) at all times thereafter, the principal amount outstanding in respect of that Delivery Advance at the relevant time pursuant to the terms of this Agreement,

and, in the plural, means both of them;

“Delivery Date” means, in respect of each Ship, the date on which title to and possession of that Ship is transferred from the Builder to the relevant Borrower under the Shipbuilding Contract relative to that Ship;

“Dollars” and “$” means the lawful currency for the time being of the United States of America;

3

“Drawdown Date” means, in relation to each Advance, the date requested by the Borrower for that Advance to be made, or (as the context requires) the date on which the Advance is actually made;

“Drawdown Notice” means a notice in the form set out in Schedule 1 (or in any other form which the Lender approves or reasonably requires);

“Earnings” means, in relation to each Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner of that Ship and which arise out of the use or operation of that Ship, including (but not limited to):

(a)           except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to that Owner in the event of requisition of the Ship owned by it for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and

(vi) all moneys which are at any time payable under any Insurances in respect of loss of hire; and

(b) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;

“Earnings Account” means, in respect of each Ship, an account in the name of that Owner with the Lender in Paris designated “[name of Owner] - Earnings Account”, or any other account (with that or another office of the Lender or with a bank or financial institution other than the Lender) which is designated by the Lender as the Earnings Account for that Ship for the purposes of this Agreement and, in the plural, means both of them;

“Environmental Claim” means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

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

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

“Environmental Incident” means, in relation to each Ship:

(a) any release of Environmentally Sensitive Material from that Ship; or

4

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

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Owner owning that Ship and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

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

“Event of Default” means any of the events or circumstances described in Clause 18.1;

“Finance Documents” means:

(a) this Agreement;

(b) the Guarantees;

(c) the Master Agreement;

(d) the Master Agreement Assignment;

(e) the Predelivery Security Assignments;

(f) the General Assignments;

(g) the Mortgages;

(h) the Account Pledges;

(i) the Shares Pledges;

(j) the Manager’s Undertakings; and

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

“Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

5

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

“Financial Year” means, in relation to the Borrower, each Owner and the Group, each period of 1 year commencing on 1 January in respect of which its consolidated accounts are or ought to be prepared;

“Fleet Vessels” means, together, all of the vessels (including, but not limited to, the Ships but excluding any newbuilding vessels which are under construction, at the relevant time, for any member of the Group) from time to time owned by members of the Group;

“Fleet Vessels’ Market Value” means, at any time, the aggregate market value of all Fleet Vessels referred to in the most recent Accounting Information of the Group;

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

“General Assignment” means, in respect of each Ship, a general assignment of the Earnings, the Insurances and any Requisition Compensation relative to that Ship in the Agreed Form and, in the plural, means both of them;

“Group” means the Borrower and its subsidiaries (whether direct or indirect and including, but not limited to, the Owners) from time to time during the Security Period and “member of the Group” shall be construed accordingly;

“Guarantee” means, in relation to each Owner, the guarantee executed or to be executed by that Owner in favour of the Lender guaranteeing the obligations of the Borrower under this Agreement and the other Finance Documents in the Agreed Form and, in the plural, means both of them;;

“Initial Market Value” means, in relation to each Ship, the Market Value thereof as at the Drawdown Date for the Delivery Advance relative to that Ship determined by the valuation referred to in paragraph 5 of Schedule 2, Part D;

“Insurances” means:

(a)           all policies and contracts of insurance, including entries of a Ship in any protection and indemnity or war risks association, effected in respect of that Ship, the Earnings or otherwise in relation to the Ship; and

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(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

“Interest Period” means a period determined in accordance with Clause 5;

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);

“ISPS Code” means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;

“ISSC” means a valid and current International Ship Security Certificate issued under the ISPS Code;

“Lender” means Credit Agricole Corporate and Investment Bank, a French societe anonyme, acting in such capacity having its registered office at 9, quai du President Paul Doumer, 92920 Paris La Defense Cedex, France registered under the SIREN No. 304 187 701 at the Registre du Commerce et des Societes of Nanterre;

“Leverage Ratio” means, at any relevant time, the ratio of:

(a) Total Debt; to

(b) the Fleet Vessels’ Market Value;

“LIBOR” means, for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00 a.m. (London time) on the Quotation date for that Interest Period (and, for the purposes of this Agreement, “Reuters BBA Page LIBOR 01” means the display designated as “Reuters BBA Page LIBOR 01” on the Reuters Money News Service or such other page as may replace BBA Page LIBOR 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for Dollars); or

(b) if no rate is quoted on Reuters BBA Page LIBOR 01 or if the rate referred to in (a) above would not represent the cost of funding of the Lender, the rate per annum determined by the Lender to be the rate per annum which leading banks in the London Interbank Market offer to the Lender for deposits in Dollars in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for a period equal to that Interest Period and for delivery on the first Business Day of it;

“Loan” means the principal amount for the time being outstanding under this Agreement;

“Liquid Funds” means, in respect of the relevant period, the aggregate of cash in hand held by members of the Group with banks or other financial institutions of at least investment grade rating which is free of any Security Interest;

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“Major Casualty” means any casualty to a Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $250,000 or the equivalent in any other currency;

“Manager’s Undertaking” means, in relation to each Ship, a letter of undertaking executed or to be executed by each Approved Manager in favour of the Lender in the Agreed Form agreeing certain matters in relation to that Approved Manager, serving as technical or, as the case may be, commercial manager and subordinating its rights against that Ship and the Owner thereof to the rights of the Lender under the Finance Documents and, in the plural, means all of them;

“Margin” means 2.70 per cent. per annum;

“Market Value” means, in respect of each Ship, the market value of that Ship determined from time to time in accordance with Clause 14.3;

“Master Agreement” means, the master agreement (on the 1992 or 2002 ISDA (Multicurrency - Crossborder) form as modified) made or to be made between the Lender and the Borrower, and includes all Transactions from time to time entered into and Confirmations from time to time exchanged under the master agreement and any amending, supplementing or replacement agreements made from time to time;

“Master Agreement Assignment” means an assignment of the Borrower’s rights under the Master Agreement in favour of the Lender executed or to be executed by the Borrower in the Agreed Form;

“Mortgage” means, in respect of each Ship, the first preferred or, as the case may be, priority ship mortgage on the Ship and, if required pursuant to the laws of the applicable Approved Flag State, a deed of covenant collateral thereto executed or to be executed by the Owner owning that Ship in favour of the Lender in the Agreed Form and, in the plural, means both of them;

“Mortgaged Ship” means a Ship which is subject to a Mortgage at the relevant time and, in the plural, means both of them;

“Negotiation Period” has the meaning given in Clause 4.6;

“Nomination” means, in respect of each Ship, the Borrower’s nomination of the relevant Owner as the buyer and prospective owner of that Ship pursuant to Article XIV of the relevant Shipbuilding Contract;

“Nomination Date” means, in respect of each Ship, the date on which the Nomination relative to that Ship takes effect in accordance with Article XIV of the relevant Shipbuilding Contract, being a date falling at any time prior to the Delivery Date in respect of that Ship;

“Owner” means, in relation to:

(a) the Owner A Ship, Star B; and

(b) the Owner B Ship, Star P,

and, in the plural, means both of them;

“Payment Currency” has the meaning given in Clause 20.4;

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“Permitted Security Interests” means:

(a) Security Interests created by the Finance Documents;

(b) liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;

(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to the Ship not prohibited by this Agreement;

(e) liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 13.13(h);

(f) any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where  the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

“Pertinent Document” means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 12 or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

(d) any document which has been or is at any time sent by or to the Lender in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

“Pertinent Jurisdiction”, in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

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(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;

“Pertinent Matter” means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

“Potential Event of Default” means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Lender and/or the satisfaction of any other condition, would constitute an Event of Default;

“Predelivery Advances” means, together, the Predelivery Tranche A Advances and the Predelivery Tranche B Advances and, in the singular, means any of them;

“Predelivery Security Assignment” means, in relation to each Ship, an assignment of the Shipbuilding Contract and the Refund Guarantee in respect of that Ship in the Agreed Form and, in the plural, means both of them;

“Predelivery Tranche” means, each of the Predelivery Tranche A and Predelivery Tranche B and, in the plural, means both of them;

“Predelivery Tranche A” means an amount of up to $21,400,000 to be made available to the Borrower in two advances as follows:

(a) an amount of up to $10,700,000 to finance a substantial part of the third instalment payable under Article X.2(c) of the Owner A Shipbuilding Contract upon the keel-laying of the Owner A Ship (the “Owner A Advance A”); and

(b) an amount of up to $10,700,000 to finance the whole of the fourth instalment payable under Article X.2(d)of the Owner A Shipbuilding Contract upon the launching of the Owner A Ship (the “Owner A Advance B”);

“Predelivery Tranche A Advances” means, together, the Owner A Advance A and the Owner A Advance 13 and, in the singular, means either of them;

“Predelivery Tranche B” means, in respect of the Owner B Ship, an amount of up to $21,320,000 to be made available to the Borrower in two advances as follows:

(a) an amount of up to $10,660,000 to finance the whole of the third instalment payable pursuant to Article X.2(c) of the Owner B Shipbuilding Contract upon the keel-laying of the Owner B Ship (the “Owner B Advance A”); and

(b) an amount of up to $10,660,000 to finance the whole of the fourth instalment payable under Article X.2(d) of the Owner B Shipbuilding Contract upon the launching of the Owner B Ship (the “Owner B Advance B”);

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“Predelivery Tranche B Advances” means, together, the Owner B Advance A and the Owner B Advance B and, in the singular, means either of them;

“Quotation Date” means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period;

“Refund Guarantee” means, in relation to each Ship, the irrevocable and unconditional letter of guarantee issued or to be issued by the Refund Guarantor in favour of the Borrower in respect of the instalments payable under the Shipbuilding Contract relative to that Ship (other than the fifth and final instalment payable under Article X.2(e) of the relevant Shipbuilding Contract), as the same shall be amended and/or replaced on the relevant Nomination Date so that the relevant Owner becomes beneficiary, in the Agreed Form and, in the plural, means both of them;

“Refund Guarantor” means The Export-Import Bank of Korea, a company incorporated in the Republic of Korea acting through its office at 16-1, Yoido-Dang, Yeongdeongpo­Gu, Seoul 150-996, Korea;

“Relevant Person” has the meaning given in Clause 18.7;

“Repayment Date” means a date on which a repayment is required to be made under Clause 7;

“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;

“Retention Account” means an account in the name of the Borrower or, as the case may be, in the joint names of the Owners, with the Lender in Paris designated “Star Bulk Carriers Corp. - Retention Account”, or any other account (with that or another office of the Lender or with a bank or financial institution other than the Lender) which is designated by the Lender as the Retention Account for the purposes of this Agreement;

“Secured Liabilities” means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

“Scheduled Delivery Date” means, in relation to:

(a) the Owner A Ship, 30 September 2011; and

(b) the Owner B Ship, 30 November 2011,

being in each case the date referred to in Article VII, 1 of the relevant Shipbuilding Contract as the date on which the Owner of that Ship (as nominee of the Borrower by virtue of the relevant Nomination) shall take delivery thereof in accordance with the terms of that Shipbuilding Contract;

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“Security Interest” means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

“Security Party” means the Owner and any other person (except the Lender) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”;

“Security Period” means the period commencing on the date of this Agreement and ending on the date on which the Lender notifies the Borrower and the Security Parties that:

(a) all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

(c) neither the Borrower nor any Security Party has any future or contingent liability under Clause 19, 20 or 21 or any other provision of this Agreement or another Finance Document; and

(d) the Lender does not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

“Shares Pledge” means, in relation to each Owner, a first priority pledge of the limited liability company interests in that Owner executed or to be executed by the Borrower, as sole member, in favour of the Lender, each to be in the Agreed Form and, in the plural, means both of them;

“Ship” means each of:

(a) the Capesize bulk carrier of approximately 180,000 metric tons deadweight which is to be constructed by the Builder for Star B (as nominee of the Borrower) pursuant to the Owner A Shipbuilding Contract currently having Hull No. PN063 and which is to be purchased by Owner A and registered in its name under an Approved Flag in accordance with the laws of the applicable Approved Flag State (the “Owner A Ship”); and

(b) the Capesize bulk carrier of approximately 180,000 metric tons deadweight which is to be constructed by the Builder for Star P (as nominee of the Borrower) pursuant to the Owner B Shipbuilding Contract currently having Hull No. PN064 and which is to be purchased by Owner B and registered in its name under an Approved Flag in accordance with the laws of the applicable Approved Flag State (the “Owner B Ship”),

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and, in the plural, means both of them;

“Shipbuilding Contract” means each of

(a) the shipbuilding contract dated 24 March 2010 made between the Builder and the Borrower for the construction by the Builder of the Owner A Ship (as shall be amended and supplemented by a nomination letter in the Agreed Form pursuant to which the Borrower shall nominate Star B as buyer of the Ship relative to that Shipbuilding Contract and as the same may be further supplemented and amended from time to time subject to the provisions of this Agreement and the other Finance Documents) for, and its purchase by, Star B (as nominee of the Borrower) (the “Owner A Shipbuilding Contract”); and

(b) the shipbuilding contract dated 6 April 2010 made between the Builder and the Borrower for the construction by the Builder of the Owner B Ship (as shall be amended and supplemented by a nomination letter in the Agreed Form pursuant to which the Borrower shall nominate Star P as buyer of the Ship relative to that Shipbuilding Contract and as the same may be further supplemented and amended from time to time subject to the provisions of this Agreement and the other Finance Documents) for, and its purchase by, Star P (as nominee of the Borrower) (the “Owner B Shipbuilding Contract”),

and, in the plural, means both of them;

“Star B” means Star Borealis LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

“Star P” means Star Polaris LLC, a limited liability company formed in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960;

“Swap Exposure” means, as at any relevant date, the amount certified by the Lender to be the aggregate net amount in Dollars which would be payable by the Borrower to the Swap Bank under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Transactions entered into between the Borrower and the Swap Bank with the Borrower being the defaulting party;

“Total Debt” means the aggregate of the long term debt outstanding in respect of the Fleet Vessels including the current portion of long-term debt, at any relevant time, plus committed credit lines for corporate purposes, but excluding credit lines or outstanding debt for vessels under construction at the relevant time for any member of the Group;

“Total Loss” means:

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

(b) any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the Borrower’s full control; and

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(c) any arrest, capture, seizure or detention of the Ship (including any hijacking or theft) unless it is within 1 month redelivered to the Borrower’s full control;

“Total Loss Date” means:

(a) in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of

(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship’s insurers in which the insurers agree to treat the Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred;

“Tranche A” means, together, the Predelivery Tranche A Advances and the Delivery Advance relative to the Owner A Ship;

“Tranche B” means, together, the Predelivery Tranche B Advances and the Delivery Advance relative to the Owner B Ship;

“Transaction” has the meaning given in the Master Agreement; and

“Underlying Documents” means, together, the Shipbuilding Contracts and the Refund Guarantees and, in the singular, means any of them.

1.2 Construction of certain terms. In this Agreement:

“administration notice” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator;

“approved” means, for the purposes of Clause 12, approved in writing by the Lender;

“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

“company” includes any partnership, joint venture and unincorporated association;

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

“document” includes a deed; also a letter or fax;

“excess risks” means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

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“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its security council;

“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

“months” shall be construed in accordance with Clause 1.3;

“obligatory insurances” means all insurances effected, or which the Borrower is obliged to effect, under Clause 12 or any other provision of this Agreement or another Finance Document;

“parent company” has the meaning given in Clause 1.4;

“person” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

“protection and indemnity risks” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or clause 8 of the Institute Time Clauses (Hulls)(1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

“regulation” includes any regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

“subsidiary” has the meaning given in Clause 1.4;

“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

“war risks” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).

1.3 Meaning of “month”. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

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(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and “month” and “monthly” shall be construed accordingly.

1.4 Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

and any company of which S is a subsidiary is a parent company of S.

1.5 General Interpretation. In this Agreement:

(a) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(b) references to, or to a provision of, any law include any amendment, extension, re- enactment or replacement, whether made before the date of this Agreement or otherwise;

(c) words denoting the singular number shall include the plural and vice versa; and

(d) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

1.6 Headings. In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

2           FACILITY

2.1 Amount of facility. Subject to the other provisions of this Agreement the Lender shall make available to the Borrower:

(a) a pre-delivery term loan facility of up to $42,720,000, in aggregate, to be made available in up to 4 Predelivery Advances, as follows:

(i) in the case of the Owner A Ship, 2 Predelivery Advances, each in the amount of $10,700,000; and

(ii) in the case of the Owner B Ship, 2 Predelivery Advances, each in the amount of $10,660,000,

to finance the keel-laying and launching instalments payable by:

(iii) at all times prior to the Nomination Date, the Borrower; and

(iv) at all times thereafter, each Owner,

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to the Builder under the relevant Shipbuilding Contract; and

(b) a post-delivery term loan facility to be made available in 2 Delivery Advances, each in an amount of up to the lesser of:

(i) $35,000,000; and

(ii) 65 per cent. of the Initial Market Value of the Ship being financed by that Delivery Advance,

for the purpose of:

(A) (notionally) repaying in full the aggregate amount of the Predelivery Tranche relative to the Ship to which that Delivery Advance relates;

(B) financing the fifth instalment payable by the Owner acquiring that Ship to the Builder under the Shipbuilding Contract relative to that Ship; and

(C) providing the Borrower with additional liquidity for general corporate purposes by using the part (if any) of that Delivery Advance which is not used by the Borrower after the financing or, as the case may be, the refinancing of the items listed in paragraphs (A) and (B) above in accordance with the terms of this Agreement.

2.2 Purpose of Loan. The Borrower undertakes with the Lender to use each Advance only for the purpose stated in the preamble to this Agreement.

3           DRAWDOWN

3.1 Request for Advance. Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Lender receives a completed Drawdown Notice not later than 11.00 a.m. (Paris time) 2 Business Days prior to the intended Drawdown Date.

3.2 Availability, The conditions referred to in Clause 3.1 are that:

(a) a Drawdown Date has to be a Business Day during the Availability Period; and

(b) each:

(i) Advance A shall not exceed the amount of:

(A) in the case of the Owner A Ship, $10,700,000; and

(B) in the case of the Owner B Ship, $10,660,000,

and shall be used, in each case, for the purpose of financing the whole of the keel-laying instalment payable under Article X.2(c) of the relevant Shipbuilding Contract;

(ii) Advance B shall not exceed the amount of:

(A) in the case of the Owner A Ship, $10,700,000; and

(B) in the case of the Owner B Ship, $10,660,000,

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and shall be used, in each case, for the purpose of financing the whole of the keel-laying instalment payable under Article X.2(d) of the relevant Shipbuilding Contract; and

(iii) Delivery Advance shall not exceed the lesser of (i) $35,000,000 and (ii) 65 per cent. of the Initial Market Value of the Ship to which that Delivery Advance relates, for the purpose of:

(A) (notionally) repaying in full the aggregate amount of the Predelivery Advances relative to the Ship to which that Delivery Advance relates; and

(B) financing the fifth instalment payable by the Owner acquiring that Ship to the Builder under Article X.2(e) of the Shipbuilding Contract relative to that Ship; and

(C) providing the Borrower with additional liquidity for general corporate purposes by using the part (if any) of that Delivery Advance which is not used by the Borrower after the financing or, as the case may be, the refinancing of the items listed in paragraphs (A) and (B) above in accordance with the terms of this Agreement.

Provided that the aggregate amount of the Delivery Advances shall not exceed $70,000,000 .

3.3 Drawdown Notice irrevocable. A Drawdown Notice must be signed by a director or officer of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Lender.

3.4 Disbursement of Advance. Subject to the provisions of this Agreement, the Lender shall on each Drawdown Date make the relevant Advance to the Borrower; and payment to the Borrower shall be made to the account of the Builder which the Borrower specifies in the Drawdown Notice.

3.5 Disbursement of Advance to third party. The payment by the Lender under Clause 3.4 to the Builder shall constitute the making of an Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to that Advance.

4           INTEREST

4.1 Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

4.2 Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of the Margin and LIBOR for that Interest Period.

4.3 Payment of accrued interest. In the case of an Interest Period longer than 6 months, accrued interest shall be paid every 6 months during that Interest Period and on the last day of that Interest Period.

4.4 Notification of market disruption. The Lender shall promptly notify the Borrower if for any reason the Lender is unable to obtain Dollars in the London Interbank Market in order to fund the Loan (or any part of it) during any Interest Period, stating the circumstances which have caused such notice to be given.

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4.5 Suspension of drawdown. If the Lender’s notice under Clause 4.4 is served before an Advance is made, the Lender’s obligation to make that Advance shall be suspended while the circumstances referred to in the Lender’s notice continue.

4.6 Negotiation of alternative rate of interest. If the Lender’s notice under Clause 4,4 is served after an Advance is made, the Borrower and the Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Lender serves its notice under Clause 4.4 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an alternative basis for the Lender to fund or continue to fund the Loan during the Interest Period concerned.

4.7 Application of agreed alternative rate of interest. Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

4.8 Alternative rate of interest in absence of agreement. If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Lender shall set an interest period and interest rate representing the cost of funding of the Lender in Dollars or in any available currency of the Loan plus the Margin; and the procedure provided for by this Clause 4,8 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Lender.

4.9 Notice of prepayment. If the Borrower does not agree with an interest rate set by the Lender under Clause 4.8, the Borrower may give the Lender not less than 15 Business Days’ notice of its intention to prepay at the end of the interest period set by the Lender.

4.10 Prepayment. A notice under Clause 4.9 shall be irrevocable; and on the last Business Day of the interest period set by the Lender, the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin.

4.11 Application of prepayment. The provisions of Clause 7 shall apply in relation to the prepayment.

5           INTEREST PERIODS

5.1 Commencement of Interest Periods. The first Interest Period applicable to an Advance shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

5.2 Duration of normal Interest Periods. Subject to Clauses 5.3 and 5.4, each Interest Period shall be:

(a) 3, 6 or 12 months as notified by the Borrower to the Lender not later than 11.00 a.m. (Paris time) 3 Business Days before the commencement of the Interest Period; or

(b) in the case of the first Interest Period applicable to the second and any subsequent Advance, a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon all of the Advances shall be consolidated and treated as a single Advance;

(c) 3 months, if the Borrower fails to notify the Lender by the time specified in paragraph (a); or

(d) such other period as the Lender may agree with the Borrower.

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5.3 Duration of Interest Periods for repayment instalments. In respect of an amount due to be repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

5.4 Non-availability of matching deposits for Interest Period selected. If, after the Borrower has selected and the Lender has agreed an Interest Period longer than 6 months, the Lender notifies the Borrower by 11.00 a.m. (Paris time) on the second Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.

6           DEFAULT INTEREST

6.1 Payment of default interest on overdue amounts. The Borrower shall pay interest in accordance with the following provisions of this Clause 6 on any amount payable by the Borrower under any Finance Document which the Lender does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 18.4, the date on which it became immediately due and payable.

6.2 Default rate of interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Lender to be 2 per cent, above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 6.3(a) and (b); or

(b) in the case of any other overdue amount, the rate set out at Clause 6.3(b).

6.3 Calculation of default rate of interest. The rates referred to in Clause 6.2 are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period); and

(b) the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Lender may select from time to time:

(i) LIBOR; or

(ii) if the Lender determines that Dollar deposits for any such period are not being made available to it by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Lender by reference to the cost of funds to it from such other sources as the Lender may from time to time determine.

6.4 Notification of interest periods and default rates. The Lender shall promptly notify the Borrower of each interest rate determined by it under Clause 6.3 and of each period selected by it for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Lender’s notification.

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6.5 Payment of accrued default interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined.

6.6 Compounding of default interest. Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

6.7 Application to Master Agreement. For the avoidance of doubt, this Clause 6 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 2(e) (Default Interest; Other Amounts) of the Master Agreement shall apply.

7           REPAYMENT AND PREPAYMENT

7.1 Amount of repayment instalments. The Borrower shall repay the Loan as follows:

(a) each Predelivery Tranche shall be repaid in full on the Drawdown Date of the Delivery Advance relative to the Ship to which that Predelivery Tranche relates by applying part of the Delivery Advance in repayment of the Predelivery Tranche; and

(b) each Delivery Advance by:

(i) 28 equal quarterly instalments each in the amount of $512,500; and

(ii) a balloon instalment (each, the “Balloon Instalment” and, together, the “Balloon Instalments”) in the amount of $20,650,000,

Provided that if the amount of a Delivery Advance drawdown under this Agreement is less than the maximum amount permitted pursuant to the terms hereof, each repayment instalment and the Balloon Instalment relative to that Delivery Advance shall be reduced pro rata by an amount equal to the undrawn amount.

7.2 Repayment Dates for Tranches.

(a) Each Predelivery Tranche shall be repaid (unless prepaid pursuant to Clause 7.7(b)) on the Drawdown Date of the Delivery Advance in respect of the Ship to which that Predelivery Tranche relates; and

(b) the first repayment instalment in respect of each Delivery Advance shall be repaid on a date to be advised by the Lender to the Borrower falling within the 3-month period commencing on the Drawdown Date relative to that Advance and under no circumstances being a date later than the last date of that period, each subsequent repayment instalment shall be repaid at 3-monthly intervals thereafter and the last repayment instalment in respect of that Advance shall be repaid, together with the relevant Balloon Instalment, on the date falling on the seventh anniversary of the Drawdown Date in respect of that Delivery Advance.

7.3 Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.

7.4 Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan on the last day of an Interest Period.

7.5 Conditions for voluntary prepayment. The conditions referred to in Clause 7.4 are that:

(a) a partial prepayment shall be $500,000 or a multiple of $500,000;

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(b) the Lender has received from the Borrower at least 15 days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and

(c) the Borrower has provided evidence satisfactory to the Lender that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with.

7.6 Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Lender and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

7.7 Mandatory prepayment. The Borrower shall be obliged to prepay:

(a) the Relevant Amount of the Loan:

(i) if a Ship is sold, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or

(ii) if a Ship becomes a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss; and

(b) the whole of the Predelivery Tranche relative to a Ship if any of the following occurs, on demand by the Lender:

(i) the rights of the Borrower or, as the case may be, the relevant Owner under the relevant Underlying Document in respect of the Ship to which that Predelivery Tranche relates are transferred or assigned to a third party (other than any member of the Group and subject to the terms of this Agreement and the other Finance Documents); or

(ii) either of the Underlying Documents relative to that Ship is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in force for any reason (including, but not limited to, the occurrence of any of the events listed in Article XI of the relevant Shipbuilding Contract) or a legal or administrative action has been brought against any of the parties to that Underlying Document in connection therewith; or

(iii) either of the Underlying Documents relative to that Ship is amended or varied without the prior written consent of the Lender except for any such amendment or variation as is permitted by this Agreement or any other relevant Finance Document; or

(iv) that Ship has not for any reason been delivered to, and accepted by, the Borrower or, as the case may be, the relevant Owner under the relevant Shipbuilding Contract by the end of the relevant Availability Period.

In this Clause 7.7, “Relevant Amount” means if any of the events referred to in paragraphs (a) or (b) of this Clause 7.7 occurs, the whole of the Delivery Advance relative to the Ship which has been sold or has suffered a Total Loss or, if greater, such amount of the Loan which, after giving credit for the amount of the prepayment made pursuant to this Clause 7.7, results in the Asset Cover Ratio being equal to the higher of (i) the Asset Cover Ratio maintained immediately prior to the prepayment made pursuant to this Clause 7.7 and (ii) the Asset Cover Ratio referred to in Clause 14.1.

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7.8 Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 20 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any sums payable under Clause 20.1(b) but without premium or penalty.

7.9 Application of partial prepayment. Any partial prepayment received by the Lender pursuant to:

(a) Clause 7.4, shall be applied pro rata between the Delivery Advances and then pro rata reducing any outstanding repayment instalments in respect of each Delivery Advance and the Balloon Instalment relevant to that Delivery Advance; and

(b) Clause 7.7(a), shall be applied in fully repaying the Delivery Advance applicable to the Ship which has been sold or has suffered a Total Loss and if:

(i) the amount of the prepayment exceeds the amount of that Delivery Advance pursuant to the calculation of the Relevant Amount, the amount by which such prepayment exceeds that Delivery Advance shall be applied in prepayment of the other Delivery Advance in the manner referred to in paragraph 7.9(a); and

(ii) any balance of the sale or Total Loss proceeds remains following the application of the prepayments required pursuant to this Clause 7.9(b)(i), such balance shall be released to the Borrower if no Event of Default or Potential Event of Default is in existence at that time.

7.10 No reborrowing. No amount prepaid may be reborrowed.

7.11 Unwinding of Transactions. On or prior to any repayment or prepayment of the Loan (or part thereof) under this Clause 7 or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Transactions so that the notional principal amount of the continuing Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 7.1 unless the Lender agrees otherwise following the Borrower’s written request (which agreement shall be given on such terms as the Lender may require including, without limitation, a requirement for the provision of any additional security as the Lender may require).

8           CONDITIONS PRECEDENT

8.1 Documents, fees and no default. The Lender’s obligation to make an Advance is subject to the following conditions precedent:

(a) that, on or before the service of the first Drawdown Notice, the Lender receives the documents described in Part A of Schedule 2 in form and substance satisfactory to it and its lawyers;

(b) that, on or before the Drawdown Date in respect of each Advance A, the Lender receives the documents described in Part B of Schedule 2 in a form and substance satisfactory to it and its lawyers;

(c) that on or before the Drawdown Date in respect of each Advance B, the Lender receives the documents described in Part C of Schedule 2 in a form and substance satisfactory to it and its lawyers;

(d) that, on or before the Drawdown Date in respect of each Delivery Advance, the Lender receives the documents described in Part D of Schedule 2 in form and substance satisfactory to it and its lawyers;

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(e) that, on or before service of each Drawdown Notice the Lender has received all accrued commitment commission due and payable pursuant to Clause 19.1(b);

(f) that both at the date of each Drawdown Notice and at each Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the relevant Advance;

(ii) the representations and warranties in Clause 9.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 4.4 has occurred and is continuing; and

(iv) there has been no material adverse change in the financial condition, state of affairs or prospects of the Borrower or any Security Party applying at the date of this Agreement;

(g) that, if the ratio set out in Clause 14.1 were applied immediately following the making of the Delivery Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(h) that the Lender has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Lender may request by notice to the Borrower prior to the relevant Drawdown Date.

8.2 Waivers of conditions precedent. If the Lender, at its discretion, permits an Advance to be borrowed before certain of the conditions referred to in Clause 8.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Lender may specify).

9           REPRESENTATIONS AND WARRANTIES

9.1 General.  The Borrower represents and warrants to the Lender as follows.

9.2 Status. The Borrower is duly incorporated and validly existing and in good standing under the laws of The Marshall Islands.

9.3 Share capital and ownership. The Borrower has an authorised share capital divided into 63,410,360 common shares each of $0.01 par value and issued in registered form.

9.4 Corporate power. The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute the Shipbuilding Contracts and the Finance Documents to which the Borrower is a party; and

(b) to borrow under this Agreement, to enter into Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which the Borrower is party.

9.5 Consents in force. All the consents referred to in Clause 9.4 remain in force and nothing has occurred which makes any of them liable to revocation.

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9.6 Legal validity; effective Security Interests. The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

(a) constitute the Borrower’s legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

subject to any relevant insolvency laws affecting creditors’ rights generally.

9.7 No third party Security Interests. Without limiting the generality of Clause 9.6, at the time of the execution and delivery of each Finance Document:

(a) the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

9.8 No conflicts. The execution by the Borrower of each Finance Document, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of the Borrower; or

(c) any contractual or other obligation or restriction which is binding on the Borrower or any of its assets including, without limitation, its shareholding in the Owners.

9.9 No withholding taxes. All payments which the Borrower is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

9.10 No default. No Event of Default or Potential Event of Default has occurred.

9.11 Information. All information which has been provided in writing by or on behalf of the Borrower or any Security Party to the Lender in connection with any Finance Document satisfied the requirements of Clause 10,5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 10.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in the latest of those accounts.

9.12 No litigation. No legal or administrative action involving the Borrower, either of the Owners and the Ships (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Borrower’s financial position or profitability.

9.13 Validity and completeness of Underlying Documents. Each Underlying Document constitutes valid, binding and enforceable obligations of the parties thereto respectively in accordance with its terms; and:

(a) copy of each Underlying Document delivered to the Lender before the date of this Agreement is a true and complete copy; and

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(b) no amendments or additions to either of the Underlying Documents have been agreed nor has any of the parties thereto waived any of their respective rights thereunder.

9.14 No rebates etc. There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to an Owner, the Builder or a third party in connection with the purchase by that Owner of that Ship, other than as disclosed to the Lender in writing on or prior to the date of this Agreement (including, without limitation, any information disclosed in the Form F-1 registration statement and prospectus filed with the US Securities and Exchange Commission, a copy of which has been delivered to the Lender on or before the date of this Agreement).

9.15 Compliance with certain undertakings. At the date of this Agreement, the Borrower is in compliance with Clauses 10.2, 10.4, 10.9 and 10.13.

9.16 Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to the Borrower, its business or the Ship.

9.17 ISM Code and ISPS Code compliance. All requirements of the ISM Code and ISPS Code as they relate to the Borrower, the Owners, the Approved Managers and the Ships have been complied with.

9.18 No money laundering. Without prejudice to the generality of Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council).

10           GENERAL UNDERTAKINGS

10.1 General. The Borrower undertakes with the Lender to comply with the following provisions of this Clause 10 at all times during the Security Period, except as the Lender may otherwise permit.

10.2 Title; negative pledge and pari passu ranking. The Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in the shares of each Owner, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Document and except for Permitted Security Interests;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and

(c) procure that its liabilities under the Finance Documents to which it is a party rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

10.3 No disposal of assets. The Borrower will not transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

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(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,

but paragraph (a) does not apply to any charter of the Ship as to which Clause 13.13 applies.

10.4 No other liabilities or obligations to be incurred. The Borrower will not incur any liability or obligation except liabilities and obligations under the Shipbuilding Contract and the Finance Documents and liabilities or obligations reasonably incurred in the ordinary course of its business (which shall include, without limitation, incurring Financial Indebtedness for the financing of the vessels owned by its subsidiaries guaranteeing the obligations of its subsidiaries and all other matters reasonably incidental thereto).

10.5 Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

10.6 Provision of financial statements. The Borrower will send to the Lender:

(a) as soon as possible, but in no event later than 180 days after the end of each Financial Year of the Borrower (commencing with the Financial Year which ended 31 December 2010), the audited consolidated accounts of the Group for that Financial Year; and

(b) as soon as possible, but in no event later than 90 days after the end of each quarterly period in each Financial Year of the Borrower (commencing with the financial quarter ending on 30 March 2011), the consolidated unaudited accounts of the Group for that 3-month period, certified as to their correctness by the chief financial officer of the Borrower.

10.7 Form of financial statements. All accounts (audited and unaudited) delivered under Clause 10.6 will:

(a) be prepared in accordance with all applicable laws and GAAP;

(b) give a true and fair view of the state of affairs of the Borrower and the Group at the date of those accounts and of their profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Borrower and the Group.

10.8 Shareholder and creditor notices. The Borrower will send the Lender, at the same time as they are despatched, copies of all communications which are despatched to the Borrower’s shareholders or creditors or any class of them.

10.9 Consents. The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Lender of, all consents required:

(a) for the Borrower and each Owner to perform its obligations under any Finance Document;

(b) for the validity or enforceability of any Finance Document and each Underlying Document; and

(c) for each Owner to continue to own and operate the Ship owned by it,

and the Borrower will comply (or procure compliance) with the terms of all such consents.

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10.10 Maintenance of Security Interests. The Borrower will:

(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which may be or become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

10.11 Notification of litigation. The Borrower will provide the Lender with details of any legal or administrative action involving the Borrower, either of the Owners, any other Security Party, an Approved Manager or the Ships, the Earnings or the Insurances of either Ship as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.

10.12 No amendment to Underlying Documents. The Borrower will procure that neither of the Owner will agree to any amendment or supplement to, or waive or fail to enforce, either of the Underlying Documents to which it is a party or any of its provisions other than any amendments or supplements required pursuant to each Shipbuilding Contract to give effect to the Nomination relative thereto.

10.13 Principal place of business. The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated in Clause 27.2(a); and the Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than the Marshall Islands (other than the executed offices in Athens).

10.14 Confirmation of no default. The Borrower will, within 2 Business Days after service by the Lender of a written request, serve on the Lender a notice which is signed by 2 directors of the Borrower and which:

(a) states that no Event of Default or Potential Event of Default has occurred; or

(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

10.15 Notification of default. The Borrower will notify the Lender as soon as the Borrower becomes aware of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,

and will keep the Lender fully up-to-date with all developments.

10.16 Provision of further information. The Borrower will, as soon as practicable after receiving the request, provide the Lender with any additional financial or other information relating:

(a) to the Borrower, the Owners, the Ships, the Earnings or the Insurances of the Ships; or

(b) to any other matter relevant to, or to any provision of, a Finance Document,

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which may be requested by the Lender at any time.

10.17 Ownership. The Borrower shall remain the direct or indirect owner of all of the limited liability company interests in each Owner and shall ensure that there is no change in the legal and beneficial ownership of the shares in each Owner throughout the Security Period.

10.18 General and administrative costs. The Borrower shall ensure that the payment of all the general and administrative costs of the Borrower and the Owners in connection with the ownership and operation of the Ships (including, without limitation, the payment of the management fees pursuant to the Management Agreements) shall be fully subordinated to the payment obligations of the Borrower or, as the case may be, the Owners, under this Agreement and the other Finance Documents throughout the Security Period.

10.19 Nomination. The Borrower shall ensure that each Nomination shall be effected not later than the date falling 3 days prior to the relevant Delivery Date and shall deliver, or procure there are delivered, to the Lender on the Nomination Date relative to that Nomination:

(a) evidence satisfactory to the Lender that such Nomination has been effected in accordance with the relevant Shipbuilding Contract;

(b) an original of the relevant Refund Guarantee duly issued in the name of the Owner which is subject to that Nomination and of all documents (to be in form acceptable to the Lender) signed or issued by that Owner or, as the case may be, the Refund Guarantor (or either of them) under or in connection with that Refund Guarantee;

(c) executed copies of the Predelivery Security Assignment relative to that Owner (and of each document required to be delivered to the Lender thereunder);

(d) documents equivalent to those referred to in paragraphs 3, 4, 5 of Schedule 2, Part A in connection with the execution of the Predelivery Security Assignment by the relevant Owner; and

(e) documents and evidence equivalent to those referred to in paragraphs 9 and 10 of Schedule 2, Part A.

10.20 “Know your customer” checks. If:

(a) the introduction of or any change in (or in the interpretation, administration or application

of) any law or regulation made after the date of this Agreement;

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

(c) a proposed assignment or transfer by the Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Lender or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary

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“know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents,

10.21 Notification of redemption, purchase or return of share capital. The Borrower will, as soon as practicable prior to the date on which it intends to effect any form of redemption, purchase or return of share capital provide the Lender with any additional financial or other information relating to such redemption, purchase or return of share capital for the purposes of Clause 11.3(b).

11 CORPORATE UNDERTAKINGS

11.1 General. The Borrower also undertakes with the Lender to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Lender may otherwise permit.

11.2 Maintenance of status. The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.

11.3 Negative undertakings. The Borrower will not:

(a) change the nature of its business; or

(b) effect any form of redemption, purchase or return of share capital if, in the opinion of the Lender, the effect of such redemption, purchase or return of share capital would adversely affect the Borrower’s compliance with the terms of the Finance Documents (including, but not limited to, the Borrower’s obligations under Clause 11.4); or

(c) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrower’s share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected; or

(iii) enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms’ length Provided that it shall not prevent or restrict the Borrower from on-lending the Loan to the Owners (or any loan or other facility made available to the Borrower for financing a newbuilding vessel or, as the case may be, a Fleet Vessel to be owned or, as the case may be, owned by any subsidiary of the Borrower in the ordinary course of the Borrower’s business); or

(d) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.

11.4 Minimum Liquidity. The Borrower shall ensure that throughout the Security Period each Owner maintains on the Earnings Account relative to its Ship a credit balance of not less than $500,000 and such balance shall be included in the calculation of the Liquid Funds of the Fleet Vessels pursuant to Clause 11.5(b).

11.5 Financial Covenants. The Borrower undertakes that at all times:

(a) the Leverage Ratio shall not be greater than 70 per cent; and

(b) the members of the Group will maintain Liquid Funds in an amount of at least the higher of (i) $10,000,000 and (ii) $500,000 per Fleet Vessel (including, without limitation, each Mortgaged Ship and the amount standing to the credit of each Earnings Account pursuant to Clause 11.4).

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11.6 Subordination of rights of Borrower. All rights which the Borrower at any time has (whether in respect of the Loan or any other transaction) against any Owner or its assets shall be fully subordinated to the rights of the Lender under the Finance Documents; and in particular, the Borrower shall not during the Security Period:

(a) claim, or in a bankruptcy of either Owner prove for any amount payable to the Borrower by an Owner, whether in respect of the Loan or any other transaction;

(b) take or enforce any Security Interest for any such amount; or

(c) claim to set-off any such amount against any amount payable by the Borrower to the Owners (or either of them).

11.7 Compliance Check. Compliance with the undertakings contained in Clause 11.5 shall be determined as at 30 June and 31 December in each Financial Year of the Borrower by reference to, in the case of the compliance check as at 30 June, the unaudited consolidated accounts of the Group for the first 2 financial quarters in each Financial Year delivered by the Lender pursuant to this Agreement and for the compliance check as at 31 December in each Financial Year, the audited consolidated accounts for that financial year of the Group delivered to the Lender pursuant to this Agreement. At the same time as it delivers those consolidated accounts, the Borrower shall deliver to the Lender a Compliance Certificate signed by the chief financial officer of the Borrower.

12           INSURANCE

12.1 General. The Borrower also undertakes with the Lender to procure that each Owner will comply, at all times during the Security Period, after the Delivery Date in respect of the Ship to be acquired by that Owner, with the following provisions of this Clause 12 except as the Lender may otherwise permit.

12.2 Maintenance of obligatory insurances. The Borrower shall procure that each Owner shall keep the Ship owned by it insured at the expense of that Owner against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including protection and indemnity war risks);

(c) in the case of protection and indemnity war risks, in an amount equal to the amount for which the war risks under the hull policies are effected (including, without limitation, protection and indemnity war risks in excess of the amount of war risks (hull));

(d) protection and indemnity risks in excess of the limit of cover for oil pollution liability risks included within the protection and indemnity risks; and

(e) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lender be reasonable for the relevant Owner to insure and which are specified by the Lender by notice to the relevant Owner.

12.3 Terms of obligatory insurances. The Borrower shall procure that each Owner shall effect such insurances:

(a) in Dollars;

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(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) an amount, which when aggregated with the insured value of the other Mortgaged Ship is equal to 120 per cent. of the aggregate of (A) the Loan and (B) any Swap Exposure and (ii) the Market Value of the Ship owned by it; and

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

(d) in relation to protection and indemnity risks, in respect of the full value and tonnage of the Ship owned by it;

(e) on approved terms; and

(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

12.4 Further protections for the Lender. In addition to the terms set out in Clause 13.3, the Borrower shall procure that the obligatory insurances shall:

(a) name the Lender as sole loss payee with such directions for payment as the Lender may specify;

(b) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;

(c) provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Lender in respect of any rights or interests (secured or not) held by or available to the Lender in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than the relevant Owner) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender;

(e) provide that the Lender may make proof of loss if the relevant Owner fails to do so; and

(f) provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Lender, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Lender for 30 days (or 7 days in the case of war risks) after receipt by the Lender of prior written notice from the insurers of such cancellation, change or lapse.

12.5 Renewal of obligatory insurances. The Borrower shall procure that each Owner shall:

(a) at least 14 days before the expiry of any obligatory insurance:

(i) notify the Lender of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the relevant Owner proposes to renew that insurance and of the proposed terms of renewal; and

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(ii) in case of any substantial change in insurance cover, obtain the Lender’s approval to the matters referred to in paragraph (i) above;

(b) at least 7 days before the expiry of any obligatory insurance, renew the insurance in accordance with the Lender’s approval pursuant to paragraph (a); and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.

12.6 Copies of policies; letters of undertaking. The Borrower shall procure that each Owner shall ensure that all approved brokers provide the Lender with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters of undertaking in a form required by the Lender and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 12.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause;

(c) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Lender, not less than 7 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender of the terms of the instructions;

(e) they will notify the Lender if any person other than the Owner is named as assured or co- assured in any of the obligatory insurances and shall procure that, upon the written request of the Lender, such additional assured or co-assured executes in favour of the Lender an assignment (in such form as the Lender may approve or require) of its interest in the obligatory insurances; and

(f) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by the relevant Owner under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies or, any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Lender.

12.7 Copies of certificates of entry. The Borrower shall procure that each Owner shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by that Owner is entered provides the Lender with:

(a) a certified copy of the certificate of entry for that Ship;

(b) a letter or letters of undertaking in such form as may be required by the Lender; and

(c) where required to be issued under the terms of insurance/indemnity provided by the relevant Owner’s protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Owner in accordance with the requirements of such protection and indemnity association; and

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(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship if applicable.

12.8 Deposit of original policies. The Borrower shall procure that each Owner shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

12.9 Payment of premiums. The Borrower shall procure that each Owner shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Lender.

12.10 Guarantees. The Borrower shall procure that each Owner shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

12.11 Restrictions on employment. The Borrower shall procure that no Owner shall employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances.

12.12 Compliance with terms of insurances. The Borrower shall procure that no Owner shall do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and, in particular:

(a) each Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 12.7(c) above) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;

(b) no Owner shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

(c) each Owner shall make all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) no Owner shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

12.13 Alteration to terms of insurances. The Borrower shall procure that no Owner shall either make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Lender.

12.14 Settlement of claims. The Borrower shall procure that no Owner shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

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12.15 Provision of copies of communications. The Borrower shall procure that each Owner shall provide the Lender, at the time of each such communication, copies of all written communications between that Owner and:

(a) the approved brokers; and

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Owner’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Owner and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

12.16 Provision of information. In addition, the Borrower shall procure that each Owner shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) reasonably requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 12.17 below or dealing with or considering any matters relating to any such insurances

and the Borrower shall, within a reasonable time following the Lender’s written demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.

12.17 Mortgagee’s interest and additional peril insurances. The Lender shall effect, maintain and renew all or any of the following insurances, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate:

(a) a mortgagee’s interest marine insurance in an amount of not less than 110 per cent. of the aggregate of (i) the Loan and (ii) the Swap Exposure as may be required by the Lender providing for the indemnification of the Lender for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to a Ship or a liability of a Ship or of the Owner thereof, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non­payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:

(i) any act or omission on the part of an Owner, of any operator, charterer, manager or sub-manager of the Ship owned by that Owner or of any officer, employee or agent of that Owner or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;

(ii) any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of an Owner, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Owner or of such a person, including the casting away or damaging of the Ship owned by that Owner and/or that Ship being unseaworthy; and/or

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(iii) any other matter capable of being insured against under a mortgagee’s interest marine insurance policy whether or not similar to the foregoing;

(b) if required by the Lender (in its discretion), a mortgagee’s interest additional perils insurance in an amount of not less than 110 per cent. of the aggregate of (i) the Loan and (ii) the Swap Exposure providing for the indemnification of the Lender against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of that Ship, the imposition of any Security Interest over that Ship and/or any other matter capable of being insured against under a mortgagee’s interest additional perils policy whether or not similar to the foregoing

and the Borrower shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

12.18 Review of insurance requirements. The Lender shall be entitled to review the requirements of this Clause 12 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Lender, significant and capable of affecting the Owners or the Ships and their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Owners may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrower.

12.19 Modification of insurance requirements. The Lender shall notify the Borrower of any proposed modification under Clause 12.18 to the requirements of this Clause 12 which the Lender, acting upon the advice of its insurance consultants, considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 12 and shall bind the Borrower accordingly.

12.20 Compliance with mortgagee’s instructions. The Lender shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require any Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Lender until the Owner of that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 12.19.

13           SHIP COVENANTS

13.1 General. The Borrower also undertakes with the Lender to procure that each Owner shall comply, at all times during the Security Period after the Delivery Date in respect of the Ship to be acquired by that Owner, with the following provisions of this Clause 13 except as the Lender may otherwise permit.

13.2 Ship’s name and registration. The Borrower shall procure that each Owner shall:

(a) keep the Ship owned by it registered in its ownership under an Approved Flag;

(b) not change the name or port of registry of either Ship; and

(c) not do or allow to be done anything as a result of which such registration might be cancelled or imperilled.

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13.3 Repair and classification. The Borrower shall procure that each Owner shall keep the Ship owned by it in a good and safe condition and state of repair:

(a) consistent with first-class ship ownership and management practice;

(b) so as to maintain the highest class with American Buraeu, namely +A1(E) Bulk Carrier, CSR, AB-CM, BC-A (Holds 2,4,6 and 8 may be empty), +AMS, +ACCU, ESP, GRAB(20)+BWE, UWILD, CPS, TCM, CRC, ENVIRO, PMA, SQE, GP, MLC­ACCOM, HIMP or any other first-class classification society which is a member of IACS acceptable to the Lender free of overdue recommendations and conditions of such classification society; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the relevant Approved Flag State or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code, the ISPS Code, the ISM Code Documentation and the ISPS Code Documentation.

13.4 Classification society undertaking. The Borrower shall procure that each Owner shall instruct the classification society referred to in Clause 13.3(b) (and procure that the classification society undertakes with the Lender):

(a) to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records held by the classification society in relation to the Ship owned by the applicable Owner;

(b) to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of the applicable Owner and its Ship at the offices of the classification society and to take copies of them;

(c) to notify the Lender immediately in writing if the classification society:

(i) receives notification from the applicable Owner or any person that the relevant Ship’s classification society is to be changed; or

(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship’s class under the rules or terms and conditions of the Owner’s or the Ship’s membership of the classification society;

(d) following receipt of a written request from the Lender:

(i) to confirm that each Owner is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or

(ii) if an Owner is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the classification society.

13.5 Modification. The Borrower shall procure that no Owner shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on her which would or might materially alter the structure, type or performance characteristics of the Ship or materially reduce her value.

13.6 Removal of parts. The Borrower shall procure that no Owner shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Lender and becomes on installation on that Ship the property of the relevant Owner and subject to the security constituted by the Mortgage relative to that Ship Provided that each Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.

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13.7 Surveys. The Borrower shall procure that each Owner shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender (at the expense of the Borrower) with copies of all survey reports.

13.8 Inspection. The Borrower shall procure that each Owner shall permit the Lender (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times (but in any event without interfering with the ordinary trading of that Ship) to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. All fees and expenses incurred in relation to the appointment of surveyors shall be for the account of the Borrower.

13.9 Prevention of and release from arrest. The Borrower shall procure that each Owner shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, her Earnings or her Insurances;

(b) all taxes, dues and other amounts charged in respect of that Ship, her Earnings or her Insurances; and

(c) all other outgoings whatsoever in respect of that Ship, her Earnings or her Insurances

and, forthwith upon receiving notice of the arrest of that Ship, or of her detention in exercise or purported exercise of any lien or claim, the relevant Owner shall procure her release by providing bail or otherwise as the circumstances may require.

13.10 Compliance with laws etc. The Borrower shall procure that each Owner and each Approved Manager shall:

(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by the relevant Owner, its ownership, operation and management or to the business of that Owner;

(b) not employ the relevant Ship nor allow her employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the relevant Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship’s war risks insurers unless the Owner thereof has (at its expense) effected any special, additional or modified insurance cover required for it to enter or trade to any war zone.

13.11 Provision of information. The Borrower shall procure that each Owner shall promptly provide the Lender with any information which the Lender request regarding:

(a) the Ship owned by it, her employment, position and engagements;

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(b) the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;

(d) any towages and salvages;

(e) its compliance or the compliance of the relevant Ship with the ISM Code and the ISPS Code,

and, upon the Lender’s request, provide copies of any current charter relating to that Ship and of any current charter guarantee, and copies of the ISM Code Documentation and the ISPS Code Documentation.

13.12 Notification of certain events. The Borrower shall procure that each Owner shall immediately notify the Lender by letter of:

(a) any casualty which is or is likely to be or to become a Major Casualty;

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

(c) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

(d) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or her Earnings or any requisition of that Ship for hire;

(e) any intended dry docking of that Ship;

(f) any Environmental Claim made against that Owner or in connection with the Ship owned by it, or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against an Owner, each Approved Manager or otherwise in connection with a Ship; or

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

and the Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require of the Owners’, each Approved Manager’s or any other person’s response to any of those events or matters.

13.13 Restrictions on chartering, appointment of managers etc. The Borrower shall procure that no Owner shall:

(a) let the Ship owned by it on demise charter for any period;

(b) enter into any time or consecutive voyage charter in respect of the Ship owned by it for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months (save for any such time charter disclosed to the Lender by the Borrower, the terms of which have been approved by the Lender, on or prior to the date of this Agreement);

(c) change the terms on which the Ship owned by it is employed or the identity of the person by whom that Ship is employed;

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(d) enter into any charter in relation to the Ship owned by it under which more than 2 months’ hire (or the equivalent) is payable in advance;

(e) charter the Ship owned by it otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;

(f) appoint a manager of the Ship owned by it other than an Approved Manager or agree to any alteration to the terms of an Approved Manager’s appointment;

(g) de-activate or lay up the Ship owned by it; or

(h) put the Ship owned by it into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed $250,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise.

13.14 Notice of Mortgage. The Borrower shall procure that each Owner shall keep the Mortgage applicable to the Ship owned by it registered against that Ship as a valid first priority or preferred mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Owner to the Lender.

13.15 Sharing of Earnings. The Borrower shall procure that no Owner shall:

(a) enter into any agreement or arrangement for the sharing of any Earnings;

(b) enter into any agreement or arrangement for the postponement of any date on which any Earnings are due or the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Owner to any Earnings; or

(c) enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings.

13.16 Charterparty Assignment. If an Owner enters into any Charterparty in respect of its Ship, the Borrower shall procure that the relevant Owner shall execute in favour of the Lender a Charterparty Assignment in respect of that Charterparty, and shall deliver to the Lender such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 2, Part A as the Lender may require.

14           SECURITY COVER

14.1 Minimum required security cover. Clause 14.2 applies if the Lender notifies the Borrower that:

(a) the aggregate of the Market Value of the Mortgaged Ships; plus

(b) the net realisable value of any additional security previously provided under this Clause 14,

is below the Relevant Percentage of the Loan.

In this Clause 14.1:

“Approved Charter” means any Charterparty having an unexpired duration of at least 18 months; and

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“Relevant Percentage” means:

(A) during the period commencing on the first Delivery Date to occur after the date of this Agreement and ending on the second anniversary thereof, 120 per cent.; and

(B) at all other times, 125 per cent. unless a Mortgaged Ship is subject to an Approved Charter, in which case the Relevant Percentage shall be 120 per cent., for the duration of such Approved Charter.

14.2 Provision of additional security; prepayment. If the Lender serves a notice on the Borrower under Clause 14.1, the Borrower shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 1 month after the date on which the Lender’s notice is served under Clause 14.1 (the “Prepayment Date”) unless at least Business Day before the Prepayment Date it has provided, or ensured that a third party has provided, additional security which, in the opinion of the Lender, has a net realisable value at least equal to the shortfall and which has been documented in such terms as the Lender may approve or require.

14.3 Valuation of Ship. The market value of a Mortgaged Ship at any date is that shown by a valuation prepared:

(a) as at a date not more than 14 days previously;

(b) by an independent sale and purchase shipbroker which the Lender has approved or appointed for the purpose;

(c) with or without physical inspection of that Ship (as the Lender may require);

(d) on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and

(e) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

14.4 Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 14.2 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 14.3.

14.5 Valuations binding. Any valuation under Clause 14.2, 14.3 or 14.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Lender makes of any additional security which does not consist of or include a Security Interest.

14.6 Provision of information. The Borrower shall promptly provide the Lender and any shipbroker or expert acting under Clause 14.3 or 14.4 with any information which the Lender or the shipbroker or expert may request for the purposes of the valuation; and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Lender (or the expert appointed by it) considers prudent.

14.7 Payment of valuation expenses. Without prejudice to the generality of the Borrower’s obligations under Clauses 19.2, 19.3 and 20.3, the Borrower shall, on demand, pay the Lender the amount of the fees and expenses of any shipbroker or expert instructed by the Lender under this Clause and all legal and other expenses incurred by the Lender in connection with any matter arising out of this Clause.

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14.8 Application of prepayment. Clause 7 shall apply in relation to any prepayment pursuant to Clause 14.2.

15           PAYMENTS AND CALCULATIONS

15.1 Currency and method of payments. All payments to be made by the Borrower to the Lender under a Finance Document shall be made to the Lender:

(a) by not later than 11.00 a.m. (Paris time) on the due date;

(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Lender shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and

(c) to such account with such other bank as the Lender may from time to time notify to the Borrower.

15.2 Payment on non-Business Day. If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

15.3 Basis for calculation of periodic payments.  All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

15.4 Lender accounts. The Lender shall maintain an account showing the amounts advanced by the Lender and all other sums owing to the Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

15.5 Accounts prima facie evidence. If the account maintained under Clauses 15.4 shows an amount to be owing by the Borrower or a Security Party to the Lender, that account shall be prima facie evidence that that amount is owing to the Lender.

16           APPLICATION OF RECEIPTS

16.1 Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by the Lender under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents and the Master Agreement in the following proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Lender under the Finance Documents and the Master Agreement (in respect of any Transactions) other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses 19, 20 and 21 of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document or in the Master Agreement);

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(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Lender under any of the Finance Documents and the Master Agreement (in respect of any Transactions) (and, for this purpose, the expression “interest” shall include any net amount which the Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement (in respect of any Transactions) but shall have failed to pay or deliver to the Lender at the time of application or distribution under this Clause 16); and

(iii) thirdly, in or towards satisfaction pro rata of the. Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);

(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document (in the case of the Master Agreement, in respect of any Transaction) but which the Lender, by notice to the Borrower and the Security Parties, states that in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 16.1(a), 16.1(b), 16.1(c) and 16.1(d); and

(c) THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

16.2 Variation of order of application. The Lender may, by notice to the Borrower and the Security Parties, provide for a different manner of application from that set out in Clause 16 either as regards a specified sum or sums or as regards sums in a specified category or categories.

16.3 Notice of variation of order of application. The Lender may give notices under Clause 16 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the second Business Day before the date on which the notice is served.

16.4 Appropriation rights overridden. This Clause 16 and any notice which the Lender gives under Clause 16 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

17           APPLICATION OF EARNINGS

17.1 Payment of Earnings. The Borrower undertakes with the Lender to ensure that, throughout the Security Period and subject only to the other provisions of this Agreement and the General Assignment, all the Earnings of each Ships are paid to the Earnings Account relative to that Ship and all payments made in relation to that Ships and/or its Owner are made from that Earnings Account

17.2 Monthly retentions. The Borrower undertakes with the Lender to ensure that, in each calendar month of the Security Period after a Ship’s Delivery Date, on such dates as the Lender may from time to time specify, there is transferred to the Retention Account out of the Earnings of that Ship received in the Earnings Account for that Ship during the preceding calendar month:

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(a) one-third of the amount of the repayment instalment in respect of the Delivery Advance to which that Ship relates falling due under Clause 7.1(b) on the next Repayment Date; and

(b) the relevant fraction of the aggregate amount of interest on the relevant Delivery Advance which is payable on the next due date for payment of interest under this Agreement.

The “relevant fraction” is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or, if the period is shorter, the number of months from the later of the commencement of the current Interest Period or the last due date for payment of interest to the next due date for payment of interest under this Agreement).

17.3 Shortfall in Earnings. If the aggregate Earnings received in the Earnings Account are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 17.2, the Borrower shall make up the amount of the insufficiency on demand from the Lender; but, without thereby prejudicing the Lender’s right to make such demand at any time, the Lender may permit the Borrower to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 17.2 from the Earnings received in the next or subsequent months.

17.4 Application of retentions. Until an Event of Default or a Potential Event of Default occurs, the Lender shall on each Repayment Date and on each due date for the payment of interest under this Agreement apply in accordance with Clause 15.1 so much of the balance on the Retention Account as equals:

(a) the repayment instalment or instalments due on that Repayment Date; or

(b) the amount of interest payable on that interest payment date,

in discharge of the Borrower’s liability for that repayment instalment or that interest.

17.5 Interest accrued on Retention Account. Any credit balance on the Retention Account shall bear interest at the rate from time to time offered by the Lender to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Lender likely to remain on the Retention Account.

17.6 Release of accrued interest. Interest accruing under Clause 17.5 shall be released to the Borrower on each Repayment Date unless an Event of Default or a Potential Event of Default has occurred or the then credit balance on the Retention Account is less than what would have been the balance had the full amount required by Clause 17.2 (and Clause 17.4, if applicable) been transferred in that and each previous month.

17.7 Location of Accounts. The Borrower shall promptly:

(a) comply with any requirement of the Lender as to the location or re-location of the Accounts (or any of them); and

(b) execute any documents which the Lender specifies to create or maintain in favour of the Lender a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts (or any of them).

17.8 Debits for expenses etc. The Lender shall be entitled (but not obliged) from time to time to debit the Earnings Account without prior notice in order to discharge any amount due and payable to it under Clause 19 or 20 or payment of which it has become entitled to demand under Clause 19 or 20.

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17.9 Borrower’s obligations unaffected. The provisions of this Clause 17 (as distinct from a distribution effected under Clause 17.4) do not affect:

(a) the liability of the Borrower to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrower or any Security Party under any Finance Document.

18           EVENTS OF DEFAULT

18.1 Events of Default. An Event of Default occurs if:

(a) the Borrower or any Security Party fails to pay when due any sum payable under a Finance Document or under any document relating to a Finance Document; or

(b) any breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3, 11.5 or 14.2; or

(c) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a) or (b)) which, in the opinion of the Lender, is capable of remedy and such default continues unremedied 10 or, in the case of subparagraph (1) below, 60, days after written notice from the Lender requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in any Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraph (a), (b) or (c)); or

(e) any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:

(i) any Financial Indebtedness of a Relevant Person is not paid when due; or

(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

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(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

(i) a Relevant Person becomes, in the opinion of the Lender, unable to pay its debts as they fall due; or

(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating:

(A) in the case of the Borrower, $1,000,000; and

(B) in the case of all other Relevant Persons, $200,000 or more or the equivalent in another currency; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or the Owners which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Lender and effected not later than 3 months after the commencement of the winding up; or

(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

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(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

(xi) in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Lender is similar to any of the foregoing; or

(h) the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Lender, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Lender considers material under a Finance Document; or

(ii) for the Lender to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(j) any consent necessary to enable the Borrower to own the shares in each Owner or each Owner to operate or charter the Ship owned by it or to enable the Borrower or any Security Party to comply with any provision which the Lender considers material of a Finance Document or the Shipbuilding Contract is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(k) it appears to the Lender that, without its prior consent, a change has occurred or probably has occurred after the date of legal this Agreement in the ownership of the limited liability company interests of either of the Owners; or

(l) it appears to the Lender that:

(i) the chairman of the Borrower’s board of directors (the identity of whom has been advised by the Borrower to the Lender on or prior to the date of this Agreement) ceases to hold that office at any time during the Security Period; or

(ii) that chairman or the members of the chairman’s family (the identity of whom have been advised by the Borrower to the Lender on or prior to the date of this Agreement) ceases or, as the case may be, cease to have an active role in the Borrower’s management and decision making process; or

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(m) any of the Underlying Documents is amended and/or varied without the prior written consent of the Lender; or

(n) any of the following occurs in relation to the Master Agreement:

(i) notice of an Early Termination Date is given by the Lender under Section 6(a) of the Master Agreement; or

(ii) a person entitled to do so gives notice of Early Termination Date under Section (b)(iv) of the Master Agreement; or

(iii) an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or

(iv) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender; or

(o) any provision which the Lender considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(p) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(q) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of any Relevant Person; or

(ii) any accident or other event involving the Ship or another vessel owned, chartered or  operated by a Relevant Person,

in the light of which the Lender considers that there is a significant risk that the Borrower or any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents to which each is a party as they fall due.

18.2 Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default the Lender may:

(a) serve on the Borrower a notice stating that all obligations of the Lender to the Borrower under this Agreement are cancelled; and/or

(b) serve on the Borrower a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

(c) take any other action which, as a result of the Event of Default or any notice served under paragraph (a) and (b), the Lender is entitled to take under any Finance Document or any applicable law.

18.3 Termination of obligations. On the service of a notice under Clause 18.2(a), all the obligations of the Lender to the Borrower under this Agreement shall be cancelled.

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18.4 Acceleration of Loan. On the service of a notice under Clause 18.2(b), all or, as the case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

18.5 Multiple notices; action without notice. The Lender may serve notices under Clause 18.2(a) and (b) simultaneously or on different dates and it may take any action referred to in Clause 18.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

18.6 Exclusion of Lender liability. Neither the Lender nor any receiver or manager appointed by the Lender, shall have any liability to the Borrower or a Security Party:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

except that this does not exempt the Lender or a receiver or manager from liability for losses shown to have been caused directly and mainly by the dishonesty or the wilful misconduct of the Lender’s own officers and employees or ( as the case may be) such receiver’s or manager’s own partners or employees.

18.7 Relevant Persons. In this Clause 18, a “Relevant Person” means the Borrower, a Security Party and any other member of the Group; but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

18.8 Interpretation. In Clause 18.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 18.1(g) “petition” includes an application.

19           FEES AND EXPENSES

19.1 Arrangement and commitment fees. The Borrower shall pay to the Lender:

(a) on the date of this Agreement, or any other date as may be agreed in writing between the Lender and the Borrower, a non-refundable management fee of $630,000 (representing 0.90 per cent. of the maximum available amount of the Loan); and

(b) quarterly in arrears during the period from (and including) the date of this Agreement to the earlier of (i) the Drawdown Date in respect of the second Delivery Advance and (ii) the last day of the Availability Period (and on the last day of such period), a non­refundable commitment fee at the rate of 0.90 per cent, per annum on the undrawn amount of the Loan.

19.2 Costs of negotiation, preparation etc. The Borrower shall pay to the Lender on its demand the amount of all expenses incurred by the Lender in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.

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19.3 Costs of variation, amendments, enforcement etc. The Borrower shall pay to the Lender, on the Lender’s demand, the amount of all expenses incurred by the Lender in connection with:

(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(b) any consent or waiver by the Lender concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

(c) the valuation of any security provided or offered under Clause 14 or any other matter relating to such security; or

(d) any step taken by the Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

19.4 Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Lender’s demand, fully indemnify the Lender against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.

19.5 Certification of amounts. A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 19 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

20           INDEMNITIES

20.1 Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Lender, or which the Lender reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender;

(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 6); and

(d) the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 18,

and in respect of any tax (other than tax on its overall net income) for which the Lender is liable in connection with any amount paid or payable to the Lender (whether for its own account or otherwise) under any Finance Document.

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20.2 Breakage costs. Without limiting its generality, Clause 20,1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by the Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which includes the Loan or any overdue amount); and

(b) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender) to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.

20.3 Miscellaneous indemnities. The Borrower shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by the Lender, in any country, as a result of or in connection with:

(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Lender or by any receiver appointed under a Finance Document; or

(b) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Lender.

Without prejudice to its generality, this Clause 20.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

20.4 Currency indemnity. If any sum due from the Borrower or any Security Party to the Lender under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of

(a) making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment,

the Borrower shall indemnify the Lender against the loss arising when the amount of the payment actually received by the Lender is converted at the available rate of exchange into the Contractual Currency.

In this Clause 20.4, the “available rate of exchange” means the rate at which the Lender is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 20.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

20.5 Certification of amounts. A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

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20.6 Application to Master Agreement. For the avoidance of doubt, Clause 20.4 does not apply in respect of sums due from the Borrower to the Lender under or in connection with the Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of that Master Agreement shall apply.

21           NO SET-OFF OR TAX DEDUCTION

21.1 No deductions. All amounts due from the Borrower under a Finance Document shall be paid:

(a) without any form of set-off, cross-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

21.2 Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any payment:

(a) the Borrower shall notify the Lender as soon as it becomes aware of the requirement;

(b) the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Lender receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

21.3 Evidence of payment of taxes. Within one month after making any tax deduction, the Borrower shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had been paid to the appropriate taxation authority.

21.4 Exclusion of tax on overall net income. In this Clause 21 “tax deduction” means any deduction or withholding for or on account of any present or future tax except tax on the Lender’s overall net income.

21.5 Application to Master Agreement. For the avoidance of doubt, Clause 21 does not apply in respect of sums due from the Borrower to the Lender under or in connection with the Master Agreement which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of that Master Agreement shall apply.

22           ILLEGALITY, ETC

22.1 Illegality. This Clause 22 applies if the Lender notifies the Borrower that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation,

for the Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

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22.2 Notification and effect of illegality. On the Lender notifying the Borrower under Clause 22.1, the Lender’s obligation to make any further Advances shall terminate; and thereupon or, if later, on the date specified in the Lender’s notice under Clause 22.1 as the date on which the notified event would become effective the Borrower shall prepay the Loan in full in accordance with Clause 7.

23           INCREASED COSTS

23.1 Increased costs. This Clause 23 applies if the Lender notifies the Borrower that it considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender’s overall net income); or

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,

the Lender (or a parent company of it) has incurred or will incur an “increased cost”;

(c) the effect of complying with the regulations set out in the “International Convergence of Capital Standards, a Revised Framework” published by the Basle Committee on Banking Supervision in June 2004 as implemented in the EU by the Capital Requirements Directive (2006/48/EC and 2006/49/EC) (or any subsequent amendment or substitute agreement) is that the Lender (or a parent company of it) has incurred or will incur an “increased cost” when compared to the cost of complying with such regulations as determined by the Lender (or a parent company of it) on the date of this Agreement.

In this Clause 23.1, “increased cost” means:

(i) an additional or increased cost incurred as a result of, or in connection with, the Lender having entered into, or being a party to, this Agreement of funding or maintaining the Loan or performing its obligations under this Agreement, or of having outstanding all or any part of the Loan or other unpaid sums; or

(ii) a reduction in the amount of any payment to the Lender under this Agreement or in the effective return which such a payment represents to the Lender or on its capital;

(iii) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Loan or (as the case may require) the proportion of that cost attributable to the Loan; or

(iv) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Lender under this Agreement;

but not an item attributable to a change in the rate of tax on the overall net income of the Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 20.1 or by Clause 21.

For the purposes of this Clause 23.1 the Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate

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23.2 Payment of increased costs. The Borrower shall pay to the Lender, on its demand, the amounts which the Lender from time to time notifies the Borrower that it has specified to be necessary to compensate it for the increased cost.

23.3 Notice of prepayment. If the Borrower is not willing to continue to compensate the Lender for the increased cost under Clause 23.2, the Borrower may give the Lender not less than 14 days’ notice of its intention to prepay the Loan at the end of an Interest Period.

23.4 Prepayment. A notice under Clause 23.3 shall be irrevocable; and on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin.

23.5 Application of prepayment. Clause 7 shall apply in relation to the prepayment.

24           SET-OFF

24.1 Application of credit balances. The Lender may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of the Lender in or towards satisfaction of any sum then due from the Borrower to the Lender under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

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

24.2 Existing rights unaffected. The Lender shall not be obliged to exercise any of its rights under Clause 24.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is entitled (whether under the general law or any document).

24.3 No Security Interest. This Clause 24 gives the Lender a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

25           TRANSFERS AND CHANGES IN LENDING OFFICE

25.1 Transfer by Borrower. The Borrower may not, without the consent of the Lender transfer any of its rights, liabilities or obligations under any Finance Document.

25.2 Assignment by Lender. The Lender may assign all or any of the rights and interests which it has under or by virtue of the Finance Documents subject to such assignment being made to no more than 2 internationally acknowledged banks with a long standing presence in the shipping finance industry approved by the Borrower (such approval not to be unreasonably withheld or delayed).

25.3 Rights of assignee. In respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document, or any misrepresentation made by the Borrower or any other Security Party in or in connection with a Finance Document, a direct or indirect assignee of any of the Lender’s rights or interests under or by virtue of the Finance Documents shall be entitled to recover damages by reference to the loss incurred by that assignee as a result of the breach or misrepresentation irrespective of whether the Lender would have incurred a loss of that kind or amount.

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25.4 Sub-participation; subrogation assignment. The Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower; and the Lender may assign, in any manner and terms agreed by it, all or any part of those rights to an insurer or surety who has become subrogated to them.

25.5 Disclosure of information. The Lender may disclose to a potential assignee or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

25.6 Change of lending office. The Lender may change its lending office by giving notice to the Borrower and the change shall become effective on the later of:

(a) the date on which the Borrower receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

25.7 Security over Lender’s rights. In addition to the other rights provided to the Lender under this Clause 25, the Lender may without consulting with or obtaining consent from the Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of the Lender including, without limitation:

(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(b) if the Lender is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by the Lender as security for those obligations or securities;

except that no such charge, assignment or Security Interest shall:

(i) release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the Lender under the Finance Documents.

26           VARIATIONS AND WAIVERS

26.1 Variations, waivers etc. by Lender. A document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or the Lender’s rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower and the Lender and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

26.2 Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clauses 26.1, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Lender (or any person acting on its behalf) shall result in the Lender (or any person acting on its behalf) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

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(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

27           NOTICES

27.1 General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

27.2 Addresses for communications. A notice by letter or fax shall be sent:

(a) to the Borrower: 7 Fragoklisias 151 25 Maroussi Athens Greece   Fax No: +30 210 61 78 378

(b) to the Lender: Credit Agricole Corporate and Investment Bank 9, quai du President Paul Doumer Paris La Defense Cedex France Fax No: +33 141 89 29 87

or to such other address as the relevant party may notify the other.

27.3 Effective date of notices. Subject to Clauses 27.4 and 27.5:

(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

27.4 Service outside business hours. However, if under Clause 27.3 a notice would be deemed to be served:

(a) on a day which is not a business day in the place of receipt; or

(b) on such a business day, but after 5 p.m. local time,

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the notice shall (subject to Clause 27.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

27.5 Illegible notices. Clauses 27.3 and 27.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

27.6 Valid notices. A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

27.7 English language. Any notice under or in connection with a Finance Document shall be in English.

27.8 Meaning of “notice”. In this Clause 28 “notice” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

28           SUPPLEMENTAL

28.1 Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to the Lender are:

(a) cumulative;

(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

28.2 Severability of provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

28.3 Counterparts. A Finance Document may be executed in any number of counterparts.

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

29           LAW AND JURISDICTION

29.1 English law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.

29.2 Exclusive English jurisdiction. Subject to Clause 29.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

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29.3 Choice of forum for the exclusive benefit of the Lender. Clause 29.2 is for the exclusive benefit of the Lender, which reserves the rights:

(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

29.4 Process agent. The Borrower irrevocably appoints Hill Dickinson Services (London) Ltd, at its registered office for the time being, presently at 7 Duke’s Place, London EC3A 7LP, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.

29.5 Lender’s rights unaffected. Nothing in this Clause 29 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

29.6 Meaning of “proceedings”. In this Clause 29, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure and a “Dispute” means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

SK 25767 0001 1174402

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EX-8.1

EXHIBIT 8.1

The following is a list of the Company’s subsidiaries as of March 29, 2011:

Name	Vessel/Activity	Organization	Ownership percentage
Star Bulk Management Inc.	Management Co.	Marshall Islands	100%
Star Bulk S.A.	Management Co.	Marshall Islands	100%
Star Alpha LLC	Star Alpha	Marshall Islands	100%
Star Beta LLC	Star Beta	Marshall Islands	100%
Star Gamma LLC	Star Gamma	Marshall Islands	100%
Star Delta LLC	Star Delta	Marshall Islands	100%
Star Epsilon LLC	Star Epsilon	Marshall Islands	100%
Star Zeta LLC	Star Zeta	Marshall Islands	100%
Star Theta LLC	Star Theta	Marshall Islands	100%
Star Kappa LLC	Star Kappa	Marshall Islands	100%
Lamda LLC	Star Sigma	Marshall Islands	100%
Star Omicron LLC	Star Omicron	Marshall Islands	100%
Star Cosmo LLC	Star Cosmo	Marshall Islands	100%
Star Ypsilon LLC	Star Ypsilon	Marshall Islands	100%
Star Iota	Vessel Sold	Marshall Islands	100%
Star Aurora LLC	Star Aurora	Marshall Islands	100%
Star Borealis LLC	Star Borealis (Hull)	Marshall Islands	100%
Star Polaris LLC	Star Polaris   (Hull)	Marshall Islands	100%

EX-12.1

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Spyros Capralos, certify that:

1. I have reviewed this annual report on Form 20-F of Star Bulk Carriers Corp.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: March 30, 2011

/s/  Spyros Capralos           

Spyros Capralos

Principal Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, George Syllantavos, certify that:

1. I have reviewed this annual report on Form 20-F of Star Bulk Carriers Corp.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f))  for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: March 30, 2011

/s/ George Syllantavos      

George Syllantavos

Principal Financial Officer

EX-13.1

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Star Bulk Carriers Corp. (the "Company") on Form 20-F for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Spyros Capralos, the Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 30, 2011

/s/  Spyros Capralos           

Spyros Capralos

Principal Executive Officer

EX-13.2

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Star Bulk Carriers Corp. (the "Company") on Form 20-F for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, George Syllantavos, the Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 30, 2011

/s/  George Syllantavos     

George Syllantavos

Principal Financial Officer

EX-15.1

 Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-153304 on Form F-3 and No. 333-156843 on Form F-3 of our reports dated March 29, 2011, relating to the consolidated financial statements of Star Bulk Carriers Corp. and its subsidiaries (the "Company"), and the effectiveness of the Company's internal control over financial reporting, appearing in this Annual Report on Form 20-F of the Company for the year ended December 31, 2010.

/s/ Deloitte.

Deloitte.

Hadjipavlou, Sofianos & Cambanis S.A.

March 29, 2011