DEED OF COVENANTS

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(1)

GYPSUM TRANSPORTATION LIMITED , a company incorporated according to the law of Bermuda whose registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the “ Owner ”).

(2)

DVB BANK SE with its registered office in Frankfurt and acting through its office at Parklaan 2, 3016BB Rotterdam, The Netherlands (the “ Mortgagee ”).

(A)

Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively the “ Lenders ”) has agreed to advance to the Owner its respective Commitment of an aggregate amount not exceeding the total of (i) the lesser of forty million Dollars ($40,000,000) and fifty per centum (50%) of the Market Value of Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million Dollars ($50,000,000) and fifty per centum (50%) of the Market Value of Vessel B (in respect of Tranche B) (the “ Loan ”) on the terms and subject to the conditions set out in a loan agreement dated  2008 made between the Owner (as borrower), the Lenders (as lenders), the Mortgagee as agent for the Lenders (the “ Agent ”) and the Mortgagee as security trustee for the Lenders (the “ Security Trustee ”) (the “ Loan Agreement ”).

(B)

Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of the Lenders to make the Loan available to the Owner, the Owner has, amongst other things, agreed to execute and deliver in favour of the Mortgagee as Security Trustee for the Finance Parties a first priority statutory mortgage of all the shares in the Vessel, together with this Deed, as security for the payment of the Indebtedness.

(C)

The Owner is the legal and beneficial owner of all the shares in the Vessel and has executed, delivered and registered in favour of the Mortgagee a statutory mortgage with first priority bearing the same date as this Deed over all the shares in the Vessel (the “ Mortgage ”).

1

Definitions and Interpretation

1.3.1

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

1.3.2

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

1.3.3

references to Clauses are references to clauses of this Deed;

1.3.4

references to this Deed include the recitals to this Deed;

1.3.5

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

1.3.6

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

1.3.7

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

1.3.8

references to any Finance Party include its successors, transferees and assignees.

1.4.1

references to “interest” means interest covenanted to be paid in accordance with Clauses 3, 5.15 and 8.4;

1.4.2

references to “principal” means all other sums of money for the time being comprised in the Indebtedness; and

1.4.3

the expression “the sums for the time being due on this security” means the whole of the Indebtedness.

2.1

it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Mortgage or this Deed that either of them be filed, recorded or enrolled with any governmental authority or agency or stamped with any stamp or similar transaction tax, except for the registration of the Mortgage with the Registrar of Ships (or equivalent official) at the Vessel’s port of registry; and

2.2

it is the sole legal and beneficial owner of all the shares in the Vessel and (with the exception of the Mortgage, this Deed, crew’s wages and Permitted Encumbrances) the Vessel is free from any Encumbrance and is not under arrest or in the possession of any person (other than her master and crew) who may become entitled to assert a maritime or possessory lien on her; and

2.3

the Vessel is insured and classed in accordance with the requirements of this Deed.

4.1

In order to secure the payment of the Indebtedness and the performance by the Owner of all its other obligations under or arising out of the Security Documents the Owner, by the Mortgage and this Deed, mortgages and charges the Vessel to the Mortgagee as security agent for the Finance Parties with full title guarantee.

4.2

The security constituted by the Mortgage and this Deed shall be continuing and shall not be satisfied by any intermediate payment or satisfaction until the Indebtedness shall have been paid in full and none of the Finance Parties shall be under any further actual or contingent liability to any third party in relation to the Vessel, the Assigned Property or any other matter referred to in the Security Documents. The security constituted by the Mortgage and this Deed shall be in addition to any other security now or in the future held by any of the Finance Parties for or in respect of the Indebtedness, and shall not merge with or prejudice or be prejudiced by any such security or any other contractual or legal rights of any of the Finance Parties nor be affected by any irregularity, defect or informality or by any release, exchange or variation of any such security. Section 93 of the Law of Property Act 1925, or any provision which the Mortgagee considers analogous to that provision under the law of any other relevant jurisdiction, shall not apply to the security constituted by the Mortgage and/or this Deed.

5.1

The Owner covenants to ensure at its own expense throughout the Facility Period that:

5.2

The Mortgagee agrees that, if and for so long as the Vessel may be laid up with notification to the Mortgagee, the Owner may at its own expense take out port risk insurance on the Vessel in place of hull and machinery insurance.

5.3

The Owner undertakes to place the Obligatory Insurances in such markets, in such currency, on such terms and conditions, and with such brokers, underwriters and associations as the Mortgagee shall have previously approved in writing. The Owner shall not alter the terms of any of the Obligatory Insurances such that coverage is reduced nor allow any person other than the Managers and any entity that is part of the Group to be co-assured under any of the Obligatory Insurances without the prior written consent of the Mortgagee which consent will not be unreasonably withheld, and will supply the Mortgagee from time to time on request with such information as the Mortgagee may in its reasonable discretion require with regard to the Obligatory Insurances and the brokers, underwriters or associations through or with which the Obligatory Insurances are placed.

5.4

The Owner undertakes duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Obligatory Insurances, and, at its own expense, to arrange and provide any guarantees from time to time required by any protection and indemnity or war risks association. From time to time at the Mortgagee’s request, the Owner will provide the Mortgagee with evidence satisfactory to the Mortgagee that such premiums, calls, contributions and other sums have been duly and punctually paid; that any such guarantees have been duly given; and that all declarations and notices required by the terms of any of the Obligatory Insurances to be made or given by or on behalf of the Owner to brokers, underwriters or associations have been duly and punctually made or given.

5.5

The Owner will comply in all respects with all terms and conditions of the Obligatory Insurances and will make all such declarations to brokers, underwriters and associations as may be required to enable the Vessel to operate in accordance with the terms and conditions of the Obligatory Insurances. The Owner will not do, nor permit to be done, any act, nor make, nor permit to be made, any omission, as a result of which any of the Obligatory Insurances may become liable to be suspended, cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Obligatory Insurances may be reduced or become liable to be repaid or rescinded in whole or in part. In particular, but without limitation, the Owner will not permit the Vessel to be employed other than in conformity with the Obligatory Insurances without first taking out additional insurance cover in respect of that employment, and the Owner will promptly notify the Mortgagee of any new requirement imposed by any broker, underwriter or association in relation to any of the Obligatory Insurances. This notification shall not include notices of cancellation to amend War Risk Navigation Limits.

5.6

The Owner will, no later than fourteen days (or, in the case of war risks, no later than seven days), before the expiry of any of the Obligatory Insurances renew them and shall promptly give the Mortgagee such details of those renewals as the Mortgagee may require.

5.7

The Mortgagee shall be at liberty to take out Mortgagees’ Insurances in relation to the Vessel for such amounts and on such terms and conditions as the Mortgagee may from time to time decide, and the Owner shall from time to time on demand reimburse the Mortgagee for all costs, premiums and expenses paid or incurred by the Mortgagee in connection with any Mortgagees’ Insurances. All Mortgagees’ Insurances shall be placed with brokers and clubs on terms reasonably acceptable to the Owner

5.8

The Owner shall deliver to the Mortgagee copies of all policies, certificates of entry and other documents relating to the Insurances (including, without limitation, receipts for premiums, calls or contributions) requested by the Mortgagee and shall procure that letters of undertaking in such form as the Mortgagee may reasonably approve shall be issued to the Mortgagee by the brokers through which the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers).

5.9

The Owner shall promptly provide the Mortgagee with full information regarding any casualty or other accident or damage to the Vessel which in the reasonable opinion of the Owner is in excess of the Threshold Amount.

5.10

The Owner agrees that, at any time after the occurrence and during the continuation of an Event of Default, the Mortgagee shall be entitled to collect, sue for, recover and give a good discharge for all claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to arbitration or any other form of judicial or non-judicial determination; and otherwise to deal with such claims in such manner as the Mortgagee shall in its discretion think fit.

5.11

Whether or not an Event of Default shall have occurred or be continuing, the proceeds of any claim under any of the Insurances in respect of a Total Loss shall be paid to the Mortgagee and applied by the Mortgagee in accordance with Clause 10.

5.12

In the event of any claim in respect of any of the Insurances (other than in respect of a Total Loss or a claim less than the Threshold Amount), if the Owner shall fail to reach agreement with any of the brokers, underwriters or associations for the restoration of the Vessel, or for payment to third parties, within such time as the Mortgagee may reasonably stipulate, the Mortgagee shall be entitled, if an Event of Default has occurred and is continuing, to require payment to itself with respect to hull and machinery claims, and with respect to protection and indemnity claims, to the person entitled thereto or to other parties if and when designated by the Mortgagee.

In the event of any dispute arising between the Owner and any broker, underwriter or association with respect to any obligation to make any payment in an amount greater than the Threshold Amount to the Owner or to the Mortgagee under or in connection with any of the Insurances, or with respect to the amount of any such payment relating to a claim in excess of the Threshold Amount, the Mortgagee shall be entitled, but after a reasonable time frame set by the Mortgagee and after which still no agreement is achieved, to settle that dispute with participation of the Owner with the broker, underwriter or association concerned. Any such settlement shall be binding on the Owner.

5.13

The Mortgagee agrees that any amounts which may become due under any protection and indemnity entry or insurance shall be paid to the Owner to reimburse the Owner for, and in discharge of, the loss, damage or expense in respect of which they shall have become due, unless, at the time the amount in question becomes due, an Event of Default shall have occurred and be continuing, in which event the Mortgagee shall be entitled to receive the amounts in question and to apply them either in reduction of the Indebtedness or, at the option of the Mortgagee, to the discharge of the liability in respect of which they were paid.

5.14

The Owner shall not settle, compromise or abandon any claim under or in connection with any of the Insurances (other than a claim of less than the Threshold Amount arising other than from a Total Loss) without the prior written consent of the Mortgagee, which consent will not be unreasonably withheld or delayed.

5.15

If the Owner fails to effect or keep in force the Obligatory Insurances, the Mortgagee may (but shall not be obliged to) effect and/or keep in force such insurances on the Vessel and such entries in protection and indemnity or war risks associations as the Mortgagee in its discretion considers desirable, and the Mortgagee may (but shall not be obliged to) pay any unpaid premiums, calls or contributions. The Owner will reimburse the Mortgagee from time to time on demand for all such premiums, calls or contributions paid by the Mortgagee, together with interest at the Default Rate from the date of payment by the Mortgagee until the date of reimbursement.

5.16

The Owner shall comply strictly with the requirements of any legislation relating to pollution or protection of the environment which may from time to time be applicable to the Vessel in any jurisdiction in which the Vessel shall trade and in particular (if the Vessel is to trade in the United States of America and Exclusive Economic Zone (as defined in the Act)) the Owner shall comply strictly with the requirements of the United States Oil Pollution Act 1990 (the “ Act ”). Before any such trade is commenced and during the entire period during which such trade is carried on, the Owner shall:

5.16.5

in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone):