Report of Foreign Private Issuer
                      Pursuant to Rule 13a-16 or 15d-16 of
                       the Securities Exchange Act of 1934

                         For the month of December 2006

                        Commission File Number: 001-32458



                               DIANA SHIPPING INC.
                 (Translation of registrant's name into English)

                               Diana Shipping Inc.
                                   Pendelis 16
                              175 64 Palaio Faliro
                                 Athens, Greece
                    (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.

Form 20-F [X]     Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)7: ___

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ]      No [X]

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): ________.


INFORMATION CONTAINED IN THIS FORM 6-K REPORT

     Attached to this Report on Form 6-K as Exhibit 99.1 is the form of a credit
facility agreement entered into by Bikini Shipping Company Inc. and Eniwetok
Shipping Company, two wholly-owned subsidiaries of Diana Shipping Inc., as joint
and several borrowers and Fortis Bank as bank on November 6, 2006.

     This Report on Form 6-K is hereby incorporated by reference into the
registration statement of Form F-3 filed on December 13, 2006.




                                                                    Exhibit 99.1
                                                                    ------------


Private & Confidential

                               FACILITY AGREEMENT
                                       for
                     a Loan Facility of up to US$60,200,000
                                       and
                    a Guarantee Facility of up to $36,451,100
                                       to
                          BIKINI SHIPPING COMPANY INC.
                                       and
                         ENIWETOK SHIPPING COMPANY INC.

                                   provided by
                                   FORTIS BANK

                                                                     ^
                                                                     NORTON ROSE


                                    Contents

Clause                                                                      Page

1     Purpose and definitions ...............................................1

2     The Commitment, the Loan and the Bank Guarantees .....................11

3     Interest and Interest Periods ........................................14

4     Repayment and prepayment .............................................16

5     Fees and expenses ....................................................18

6     Payments and taxes; accounts and calculations ........................19

7     Representations and warranties .......................................20

8     Undertakings .........................................................24

9     Conditions ...........................................................28

10    Events of Default ....................................................30

11    Indemnities ..........................................................33

12    Unlawfulness and increased costs .....................................35

13    Security and set-off .................................................36

14    Cash Collateral Account ..............................................37

15    Assignment, transfer and lending office ..............................38

16    Notices and other matters ............................................39

17    Governing law and jurisdiction .......................................42


Schedule 1 Form of Drawdown Notice and Bank Guarantee Issue Request ........43

Schedule 2 Documents and evidence required as conditions precedent .........46

Schedule 3 Form of Bank Guarantee ..........................................52

Schedule 4 Form of Corporate Guarantee .....................................53

Schedule 5 Form of Pre-delivery Security Assignment ........................54


THIS AGREEMENT is dated 6 November 2006 and made BETWEEN:

(1)     BIKINI SHIPPING COMPANY INC. and ENIWETOK SHIPPING COMPANY INC. as joint
        and several Borrowers; and

(2)     FORTIS BANK as Bank. IT IS AGREED as follows:

1       Purpose and definitions

1.1     Purpose

        This Agreement sets out the terms and conditions upon and subject to
        which the Bank agrees to make available to the Borrowers, jointly and
        severally, a loan facility of up to $60,200,000 and a guarantee facility
        of up to $36,451,100, each to be used for the purpose of financing and
        guaranteeing the payment of part of the construction and acquisition
        cost of the Ships by the Borrowers pursuant to the Contracts.

1.2     Definitions

        In this Agreement, unless the context otherwise requires:

        "Account Pledge" means the first priority account pledge over the Cash
        Collateral Account executed or (as the context may require) to be
        executed by the Borrowers in favour of the Bank in such form as the Bank
        may reasonably require;

        "Advance" means each borrowing of a proportion of the Commitment by the
        Borrowers or (as the context may require) the principal amount of such
        borrowing and includes the Bikini Advances and Eniwetok Advances;

        (a)     in relation to the Bikini Ship, means each Bikini Advance; or

        (b)     in relation to the Eniwetok Ship, means each Eniwetok Advance.

        and "Advances" means any or all of them;

        "Applicable Accounting Principles" means US GAAP (being accounting
        principles and practices accepted from time to time in the United States
        of America);

        "Assignee" has the meaning ascribed thereto in clause 15.3;

        "Availability Period" means the period from the date of this Agreement
        and ending on the Termination Date for the Facility Commitment or on
        such earlier date (if any) on which (a) both Bank Guarantees have been
        issued or (b) the Facility Commitment is reduced to zero pursuant to
        clauses 4.3, 10.2 or 12 or any other provision of this Agreement;

        "Bank" means Fortis Bank a banking company incorporated and established
        under the laws of Belgium, acting through its branch established in
        Greece at 166 Syngrou Avenue, 176 71 Athens, Greece.(or of such other
        address as may last have been notified to the Borrowers pursuant to
        clause 15.6) and includes its successors in title, Assignees and/or
        Transferees;

        "Bank Guarantee":

        (a)     in relation to the Bikini Ship, the Bikini Contract and the
                Bikini Borrower, means the Bikini Bank Guarantee; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Contract and the
                Eniwetok Borrower, means the Eniwetok Bank Guarantee,

        and "Bank Guarantees" means either or both of them;

        "Bank Guarantee Expiry Date" means, in respect of a Bank Guarantee, the
        date on which the relevant Bank Guarantee is expressed to expire or, if
        earlier, the date on which the Outstanding Amount in relation to such
        Bank Guarantee has been reduced to zero (0) pursuant to any of the
        provisions of that Bank Guarantee or this Agreement;

        "Bank Guarantee Issue Date" means, in respect of a Bank Guarantee, the
        date, being a Banking Day falling within the Availability Period, on
        which the Borrowers request that such Bank Guarantee be issued, as
        specified in the Bank Guarantee Issue Request relating to such Bank
        Guarantee, or (as the context may require) the date on which such Bank
        Guarantee is actually issued;

        "Bank Guarantee Issue Request" means, in respect of each Bank Guarantee,
        a request in the form set out in Part B of schedule 1;

        "Banking Day" means a day on which dealings in deposits in Dollars are
        carried on in the London Interbank Eurocurrency Market and (other than
        Saturday or Sunday) on which banks are open for business in London,
        Athens and New York City (or any other relevant place of payment under
        clause 6),

        "Bikini Advances" means, together, the First Bikini Advance, the Second
        Bikini Advance, the Third Bikini Advance and the Fourth Bikini Advance
        and "Bikini Advance" means any of them;

        "Bikini Bank Guarantee" means the guarantee in respect of the Bikini
        Ship issued or (as the context may require) to be issued by the Bank in
        favour of the Builders at the instructions of the Borrowers in the
        maximum amount of $18,225,550 (comprising a principal amount of
        $18,060,000 and a maximum amount of interest of up to $165,550), in the
        form set out in schedule 3;

        "Bikini Borrower" means Bikini Shipping Company Inc. of Trust Company
        Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the
        Marshall islands MH96960 and includes its successors in title;

        "Bikini Contract" means the shipbuilding contract and an addendum no. 1
        thereto, each dated 30 March 2006 made between Equity Enterprises Corp.
        and the Builders, as novated in favour of the Bikini Borrower and the
        Builders by a novation agreement dated 13 September 2006 and as may be
        amended from time to time, relating to the construction and sale by the
        Builders, and the purchase by the Bikini Borrower, of the Bikini Ship;

        "Bikini Contract Assignment Consent and Acknowledgement" means the
        acknowledgement of notice of, and consent to, the assignment in respect
        of the Bikini Contract to be given by the Builders, in the form
        scheduled to the Bikini Pre-delivery Security Assignment;

        "Bikini Contract Price" means the purchase price payable by the Bikini
        Borrower to the Builders under the Bikini Contract, being $60,200,000 or
        such other lesser sum in Dollars as is determined in accordance with the
        terms and conditions of the Bikini Contract;

        "Bikini Pre-delivery Security Assignment" means the assignment of the
        Bikini Contract and each Bikini Refund Guarantee executed or (as the
        context may require) to be executed by the Bikini Borrower in favour of
        the Bank in the form set out in schedule 5;

        "Bikini Refund Guarantee Assignment Consent and Acknowledgement" means,
        in relation to each Bikini Refund Guarantee, an acknowledgement of
        notice of, and consent to, the assignment in respect of that Bikini
        Refund Guarantee to be given by the Refund Guarantor in the form
        scheduled to the Bikini Pre-delivery Security Assignment;

        "Bikini Refund Guarantees" means, together, the letter of guarantee to
        be issued by the Refund Guarantor in respect of certain of the Builders'
        obligations under the Bikini Contract and any further guarantee(s) to be
        issued by the Refund Guarantor in respect of such obligations, including
        pursuant to any agreement supplemental to the Bikini Contract, and any
        extensions, renewals or replacements thereto or thereof and "Bikini
        Refund Guarantee" means any of them;

        "Bikini Ship" means the 177,000 dwt steel-hulled, single-screw,
        diesel-driven bulk carrier, currently known as Hull No. H1107 and under
        construction by the Builders pursuant to the Bikini Contract;

        "Borrowed Money" means Indebtedness incurred in respect of (i) money
        borrowed or raised and debit balances at banks, (ii) any bond, note,
        loan stock, debenture or similar debt instrument, (iii) acceptance or
        documentary credit facilities, (iv) receivables sold or discounted
        (otherwise than on a non-recourse basis), (v) deferred payments for
        assets or services acquired, (vi) leases and hire purchase contracts,
        (vii) swaps, foreign exchange contracts, futures and other derivatives,
        (viii) any other transaction (including without limitation forward sale
        or purchase agreements) having the commercial effect of a borrowing or
        raising of money or of (ii) to (vii) above and (ix) guarantees in
        respect of Indebtedness of any person falling within any of (i) to
        (viii) above;

        "Borrower":

        (a)     in relation to the Bikini Ship, the Bikini Bank Guarantee and
                each Bikini Advance, means the Bikini Borrower; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Bank Guarantee
                and each Eniwetok Advance, means the Eniwetok Borrower,

        and "Borrowers' means either or both of them;

        "Borrowers' Security Documents" means, at any relevant time, such of the
        Security Documents as shall have been executed by either of the
        Borrowers at such time;

        "Builders" means, together, China Shipbuilding Trading Company, Limited
        of 56 (Yi) Zhongguancun Nan Da Jie, Beijing 100044, the People's
        Republic of China and Shanghai Waigaogiao Shipbuilding Co., Ltd. of 3001
        Zhouhai Read, Pudong New District, Shanghai 200137, the People's
        Republic of China and includes their respective successors in title and
        "Builder" means either of them;

        "Cash Collateral Account" means an interest bearing Dollar account of
        the Borrowers opened jointly by the Borrowers with the Bank with account
        no. 1000840204 and includes any sub-accounts thereof and any other
        account designated in writing by the Bank to be a Cash Collateral
        Account for the purposes of this Agreement;

        "Commitment" means the aggregate amount which the Bank has agreed to
        lend to the Borrowers, jointly and severally, under clause 2.1(a) as
        reduced by any relevant term of this Agreement;

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

        "Contract" means:

        (a)     in relation to the Bikini Ship, the Bikini Contract; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Contract,

        and "Contracts" means either of both of them;

        "Contract Assignment Consent and Acknowledgement" means:

        (a)     in relation to the Bikini Ship, the Bikini Contract Assignment
                Consent and Acknowledgement; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Contract
                Assignment Consent and Acknowledgement,

        and "Contract Assignment Consents and Acknowledgements" means either or
        both of them;

        "Contract Price" means:

        (a)     in relation to the Bikini Ship, the Bikini Contract Price; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Contract Price,

        and "Contract Prices" means either or both of them;

        "Corporate Guarantee" means the corporate guarantee executed or (as the
        context may require) to be executed by the Corporate Guarantor in favour
        of the Bank in the form set out in schedule 4;

        "Corporate Guarantor" means Diana Shipping Inc. of Trust Company
        Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the
        Marshall Islands MH96960 and includes its successors in title;

        "Default" means any Event of Default or any event or circumstance which
        with the giving of notice or lapse of time or the satisfaction of any
        other condition (or any combination thereof) would constitute an Event
        of Default;

        "Delivery" means, in relation to each Ship, the delivery of such Ship by
        the Builders to, and the acceptance of such Ship by, the relevant
        Borrower pursuant to the relevant Contract;

        "Dollars" and "$" mean the lawful currency of the United States of
        America and in respect of all payments to be made under any of the
        Security Documents mean funds which are for same day settlement in the
        New York Clearing House Interbank Payments System (or such other U.S.
        dollar funds as may at the relevant time be customary for the settlement
        of international banking transactions denominated in U.S. dollars);

        "Drawdown Date" means, in relation to each Advance, the date, being a
        Banking Day falling within the Drawdown Period, on which that Advance
        is, or is to be, drawn down;

        "Drawdown Notice" means a notice substantially in the form set out in
        Part A of schedule 1;

        "Drawdown Period" means the period commencing on the date of this
        Agreement and ending on the Termination Date for the Commitment or on
        such earlier date (if any) on which (a) the aggregate amount of all
        Advances that have been advanced is equal to the Commitment or (b) the
        Commitment is reduced to zero pursuant to clauses 4.3, 10.2 or 12 or (c)
        in respect of the Advances relating to a Ship, Delivery of the relevant
        Ship occurs;

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

        "Eniwetok Advances" means, together, the First Eniwetok Advance, the
        Second Eniwetok Advance, the Third Eniwetok Advance and the Fourth
        Eniwetok Advance and "Eniwetok Advance" means any of them;

        "Eniwetok Bank Guarantee" means the guarantee in respect of the Eniwetok
        Ship issued or (as the context may require) to be issued by the Bank in
        favour of the Builders at the instructions of the Borrowers in the
        maximum amount of $18,225,550 (comprising a principal amount of
        $18,060,000 and a maximum amount of interest of up to $165,550), in the
        form set out in schedule 3;

        "Eniwetok Borrower" means Eniwetok Shipping Company Inc. of Trust
        Company Complex, Ajeltake Road, Ajeltake island, Majuro, Republic of the
        Marshall Islands MH96960 and includes its successors in title;

        "Eniwetok Contract" means the shipbuilding contract and an addendum no.
        I thereto, each dated 30 March 2006 and made between the Builders and
        Loki Commercial S.A., as novated in favour of the Eniwetok Borrower and
        the Builders by a novation agreement dated 13 September 2006 and as may
        be amended from time to time, relating to the construction and sale by
        the Builders, and the purchase by the Eniwetok Borrower, of the Eniwetok
        Ship;

        "Eniwetok Contract Assignment Consent and Acknowledgement" means the
        acknowledgement of notice of, and consent to, the assignment in respect
        of the Eniwetok Contract to be given by the Builders, in the form
        scheduled to the Eniwetok Pre-delivery Security Assignment,

        "Eniwetok Contract Price" means the purchase price payable by the
        Eniwetok Borrower to the Builders under the Eniwetok Contract, being
        $60,200,000 or such other lesser sum in Dollars as is determined in
        accordance with the terms and conditions of the Eniwetok Contract;

        "Eniwetok Pre-delivery Security Assignment" means the assignment of the
        Eniwetok Contract and each Eniwetok Refund Guarantee executed or (as the
        context may require) to be executed by the Eniwetok Borrower in favour
        of the Bank in the form set out in schedule 5;

        "Eniwetok Refund Guarantee Assignment Consent and Acknowledgement"
        means, in relation to each Eniwetok Refund Guarantee, an acknowledgement
        of notice of, and consent to, the assignment in respect of that Eniwetok
        Refund Guarantee to be given by the Refund Guarantor in the form
        scheduled to the Eniwetok Pre-delivery Security Assignment;

        "Eniwetok Refund Guarantees" means, together, the letter of guarantee to
        be issued by the Refund Guarantor in respect of certain of the Builders'
        obligations under the Eniwetok Contract and any further guarantee(s) to
        be issued by the Refund Guarantor in respect of such obligations,
        including pursuant to any agreement supplemental to the Eniwetok
        Contract, and any extensions, renewals or replacements thereto or
        thereof and "Eniwetok Refund Guarantee" means any of them;

        "Eniwetok Ship" means the 177,000 dwt steel-hulled, single-screw,
        diesel-driven bulk carrier, currently known as Hull No. H1108 and under
        construction by the Builders pursuant to the Eniwetok Contract;

        "Event of Default" means any of the events or circumstances described in
        clause 10.1;

        "Facility" means the guarantee facility made available by the Bank
        pursuant to clause 2.1(b);

        "Facility Commitment" means $36,451,100;

        "First Advance" means:

        (a)     in relation to the Bikini Ship, the First Bikini Advance; or

        (b)     in relation to the Eniwetok Ship, the First Eniwetok Advance,

        and "First Advances" means either or both of them;

        "First Bikini Advance" means an Advance of up to $12,040,000 made or (as
        the context may require) to be made available to the Borrowers for the
        purpose of financing in full the "1st Instalment" of the Bikini Contract
        Price payable by the Bikini Borrower pursuant to Article II 3(a) of the
        Bikini Contract;

        "First Eniwetok Advance" means an Advance of up to $12,040,000 made or
        (as the context may require) to be made available to the Borrowers for
        the purpose of financing in full the "1st Instalment" of the Eniwetok
        Contract Price payable by the Eniwetok Borrower pursuant to Article II
        3(a) of the Eniwetok Contract;

        "Fourth Advance" means:

        (a)     in relation to the Bikini Ship, the Fourth Bikini Advance; or

        (b)     in relation to the Eniwetok Ship, the Fourth Eniwetok Advance,

        and "Fourth Advances" means either or both of them;

        "Fourth Bikini Advance" means an Advance of up to $6,020,000 made or (as
        the context may require) to be made available to the Borrowers for the
        purpose of financing in full the "4th Instalment" of the Bikini Contract
        Price payable by the Bikini Borrower pursuant to Article 3(d)

        "Fourth Eniwetok Advance" mean an advance of up to $6,020,000 made or
        (as the context may require) to be made available to the Borrowers for
        the purpose of financing in full the "4th Instalment" of the Eniwetok
        Contract Price payable by the Eniwetok Borrower pursuant to Article II
        3(d);

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

        "Group" means the Corporate Guarantor and its Subsidiaries from time to
        time (including, for the avoidance of doubt, the Borrowers) and "member
        of the Group" shall be construed accordingly;

        "Indebtedness" means any obligation for the payment or repayment of
        money, whether as principal or as surety and whether present or future,
        actual or contingent;

        "Interest Payment Date" means, in relation to each Advance or the Loan,
        the last day of an Interest Period for such Advance or (as the case may
        be) the Loan;

        "Interest Period" means each period for the calculation of interest in
        respect of each Advance or the Loan ascertained in accordance with
        clauses 3.2 and 3.3;

        "Leverage Ratio" in relation to a Measurement Period, shall have the
        meaning given to it in the Corporate Guarantee in respect of the
        Accounting Period (as defined in the Corporate Guarantee) corresponding
        to that Measurement Period;

        "LIBOR" means in relation to a particular period:

        (a)     the rate for deposits of Dollars for a period equivalent to such
                period at or around 11:00 a.m. on the Quotation Date for such
                period as displayed on Reuters page LIBOR01 (British Bankers'
                Association Interest Settlement Rates) (or such other page as
                may replace such page LIBOR01 on such system or on any other
                system of the information vendor for the time being designated
                by the British Bankers' Association to calculate the BBA
                Interest Settlement Rate (as defined in the British Bankers'
                Association's Recommended Terms and Conditions ("BBAIRS" terms)
                dated August, 1996 (as amended))); or

        (b)     if on such date no such rate is displayed, LIBOR for such period
                shall be the rate determined by the Bank to be that at which
                deposits in Dollars and in an amount comparable with the amount
                in relation to which LIBOR is to be determined and for a period
                equal to the relevant period were being offered by the Bank to
                prime banks in the London Interbank Market at or about 11:00
                a.m. on the Quotation Date for such period;

        "Loan" means the aggregate principal amount owing to the Bank under this
        Agreement at any relevant time under the Advances (excluding, for the
        avoidance of doubt any loans outstanding under clause 2.5.1);

        "Manager" means Diana Shipping Services S.A. of Edificio Universal, Piso
        12, Avenida Federico Boyd, Panama, Republic of Panama and includes its
        successors in title; "Margin" means (as calculated by the Bank pursuant
        to clause 3.1.2):

        (a)     in relation to the period commencing on the date of this
                Agreement and ending on the date falling immediately prior to
                the first Margin Calculation Date, zero six five per cent
                (0.65%) per annum;

        (b)     in relation to each Margin Period:

                (i)     if (A) the Leverage Ratio for the relevant Measurement
                        Period shall be higher than or equal to 0.75:1.0 or (B)
                        an Event of Default shall have occurred, zero point
                        eight five per cent (0.85%) per annum; or

                (ii)    if the Leverage Ratio for the relevant Measurement
                        Period shall be lower than 0.75:1.0 but higher than or
                        equal to 0.5:1.0, zero point seven five per cent (0.75%)
                        per annum; or

                (iii)   if the Leverage Ratio for the relevant Measurement
                        Period shall be lower than 0.5:1.0, zero point six five
                        per cent (0.65%) per annum;

        "Margin Calculation Date" means each 1 July of each calendar year
        (commencing from 1 July 2007);

        "Margin Period" mean each period commencing on a Margin Calculation Date
        and ending one day prior to the immediately subsequent Margin
        Calculation Date and "Margin Periods" means any or all of them;

        "Measurement Period" means, in relation to a Margin Period, the
        twelve-month period ending on 31 December of the calendar year
        immediately preceding such Margin Period;

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

        "Outstanding Amount" means, in relation to a Bank Guarantee at any
        relevant time, the maximum amount (whether of principal or interest)
        determined by the Bank to be that for which the relevant Bank Guarantee
        is issued less the aggregate amount of all reductions in that amount
        which have been made in accordance with the provisions of such Bank
        Guarantee and/or this Agreement as at such time;

        "Outstandings" means the aggregate of (a) the Outstanding Amount of all
        Bank Guarantees and (b) the aggregate principal amount of each
        outstanding loan made by the Bank to the Borrowers pursuant to clause
        2.5.1 at any relevant time,

        "Permitted Encumbrance" means any Encumbrance in favour of the Bank
        created pursuant to the Security Documents;

        "Pre-delivery Security Assignment" means:

        (a)     in relation to the Bikini Ship, the Bikini Pre-delivery Security
                Assignment; or

        (b)     in relation to the Eniwetok Ship, the Eniwetok Pre-delivery
                Security Assignment,

        and "Pre-delivery Security Assignments" means either or both of them;

        "Quotation Date" means, in relation to any period for which LIBOR is to
        be determined under this Agreement, the date on which quotations would
        customarily be provided by leading banks in the London Interbank Market
        for deposits in the relevant currency for delivery on the first day of
        that period;

        "Refund Guarantee" means:

        (a)     in relation to the Bikini Ship, each Bikini Refund Guarantee; or

        (b)     in relation to the Eniwetok Ship, each Eniwetok Refund
                Guarantee,

        and "Refund Guarantees" means either or both of them;

        "Refund Guarantee Assignment Consent and Acknowledgement" means:

        (a)     in relation to the Bikini Ship, each Bikini Refund Guarantee
                Assignment Consent and Acknowledgement; or

        (b)     in relation to the Eniwetok Ship, each Eniwetok Refund Guarantee
                Assignment Consent and Acknowledgement,

        and "Refund Guarantee Assignment Consent and Acknowledgement" means
        either or both of them;

        "Refund Guarantor" means The Export-Import Bank of China, Head Office of
        Winland International Finance Centre, No. 7 Financial Street, Xicheng
        District, Beijing 100034, People's Republic of China and includes its
        successors in title;

        "Related Company" of a person means any Subsidiary of such person, any
        company or other entity of which such person is a Subsidiary and any
        Subsidiary of any such company or entity;

        "Relevant Jurisdiction" means any jurisdiction in which or where any
        Security Party is incorporated, resident, domiciled, has a permanent
        establishment, carries on, or has a place of business or is otherwise
        effectively connected;

        "Relevant Party" means the Borrowers, the Borrowers' Related Companies
        and any other Security Party and any other Security Party's Related
        Companies and includes, for the avoidance of doubt, each member of the
        Group;

        "Repayment Date" means, subject to clause 6.3:

        (a)     in respect of each of the Bikini Advances, the earlier of (i) 31
                December 2010 and (ii) the day when Delivery of the Bikini Ship
                occurs; or

        (b)     in respect of each of the Eniwetok Advances, the earlier of (i)
                31 December 2010 and (ii) the day when Delivery of the Eniwetok
                Ship occurs;

        "SAFE" means the State Administration for Foreign Exchange of The
        People's Republic of China;

        "Second Advance" means:

        (a)     in relation to the Bikini Ship, the Second Bikini Advance; or

        (b)     in relation to the Eniwetok Ship, the Second Eniwetok Advance,

        and "Second Advances" means either or both of them;

        "Second Bikini Advance" means an Advance of up to $6,020,000 made or (as
        the context may require) to be made available to the Borrowers for the
        purpose of financing in full the "2nd Instalment" of the Bikini Contract
        Price payable by the Bikini Borrower pursuant to Article II 3(b) of the
        Bikini Contract;

        "Second Eniwetok Advance" means an Advance of up to $6,020,000 made or
        (as the context may require) to be made available to the Borrowers for
        the purpose of financing in full the "2nd Instalment" of the Eniwetok
        Contract Price payable by the Eniwetok Borrower pursuant to Article II
        3(b) of Eniwetok Contract;

        "Security Documents" means this Agreement, the Corporate Guarantee, the
        Pre-delivery Security Assignments, the Account Pledge, the Refund
        Guarantee Assignment Consents and Acknowledgements, the Contract
        Assignment Consents and Acknowledgements and any other documents as may
        have been or shall from time to time after the date of this Agreement be
        executed to secure all or any part of the Loan, interest thereon and
        other moneys from time to time owing by the Borrowers pursuant to this
        Agreement or any other Security Documents (whether or not any such
        document also secures moneys from time to time owing pursuant to any
        other document or agreement),

        "Security Party" means the Borrowers, the Corporate Guarantor, the
        Builders, the Refund Guarantor or any other person who may at any time
        be a party to any of the Security Documents (other than the Bank);

        "Security Period" means the period commencing on the date hereof and
        terminating upon the later of (a) discharge of the security created by
        the Security Documents by payment of all monies payable thereunder,
        whether actually or contingently, and (b) the latest Bank Guarantee
        Expiry Date;

        "Ship":

        (a)     in relation to the Bikini Borrower and each Bikini Advance,
                means the Bikini Ship; or

        (b)     in relation to the Eniwetok Borrower and each Eniwetok Advance,
                means the Eniwetok Ship,

        and "Ships" means either or both of them;

        "Subsidiary" of a person means any company or entity directly or
        indirectly controlled by such person, and for this purpose "control"
        means either the ownership of more than fifty per cent (50%) of the
        voting share capital (or equivalent rights of ownership) of such company
        or entity or the power to direct its policies and management, whether by
        contract or otherwise;

        "Taxes" includes all present and future taxes, levies, imposts, duties,
        fees or charges of whatever nature together with interest thereon and
        penalties in respect thereof and "Taxation" shall be construed
        accordingly;

        "Termination Date" means:

        (a)     in the case of the Commitment and the Advances, 30 December
                2010; or

        (b)     in the case of the Facility Commitment and the Bank Guarantees,
                31 December 2006,

        or, in each such case, such other later date as the Bank may, in its
        absolute discretion, agree in writing;

        "Third Advance" means:

        (a)     in relation to the Bikini Ship, the Third Bikini Advance; or

        (b)     in relation to the Eniwetok Ship, the Third Eniwetok Advance,

        and "Third Advances" means either or both of them;

        "Third Bikini Advance" means an Advance of up to $6,020,000 made or (as
        the context may require) to be made available to the Borrowers for the
        purpose of financing in full the "3rd Instalment" of the Bikini Contract
        Price payable by the Bikini Borrower pursuant to Article II 3(c) of the
        Bikini Contract;

        "Third Eniwetok Advance" means an Advance of up to $6,020,000 made or
        (as the context may require) to be made available to the Borrowers for
        the purpose of financing in full the "3rd Instalment" of the Eniwetok
        Contract Price payable by the Eniwetok Borrower pursuant to Article II
        3(c) of the Eniwetok Contract;

        "Total Loss" means, in respect of a Ship:

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

        (b)     the Compulsory Acquisition of such Ship; or

        (c)     the hijacking, theft, condemnation, capture, seizure, arrest,
                detention or confiscation of such Ship (other than where the
                same amounts to the Compulsory Acquisition of such Ship) by any
                Government Entity, or by persons acting or purporting to act on
                behalf of any Government Entity, unless such Ship be released
                and restored to the Builders from such hijacking, theft,
                condemnation, capture, seizure, arrest, detention or
                confiscation within twenty (20) days after the occurrence
                thereof;

        "Transferee" has the meaning ascribed thereto in clause 15.4; and

        "Underlying Documents" means, together, the Contracts and the Refund
        Guarantees.

1.3     Headings

        Clause headings and the table of contents are inserted for convenience
        of reference only and shall be ignored in the interpretation of this
        Agreement.

1.4     Construction of certain terms

        In this Agreement, unless the context otherwise requires:

1.4.1     references to clauses and schedules are to be construed as references
          to clauses of, and schedules to, this Agreement and references to this
          Agreement include its schedules;

1.4.2     references to (or to any specified provision of) this Agreement or any
          other document shall be construed as references to this Agreement,
          that provision or that document as in force for the time being and as
          amended in accordance with terms thereof, or, as the case may be, with
          the agreement of the relevant parties;

1.4.3     references to a "regulation" include any present or future regulation,
          rule, directive, requirement, request or guideline (whether or not
          having the force of law) of any agency, authority, central bank or
          government department or any self-regulatory or other national or
          supra-national authority;

1.4.4     words importing the plural shall include the singular and vice versa;

1.4.5     references to a time of day are to London time;

1.4.6     references to a person shall be construed as references to an
          individual, firm, company, corporation, unincorporated body of persons
          or any Government Entity;

1.4.7     references to a "guarantee" include references to an indemnity or
          other assurance against financial loss including, without limitation,
          an obligation to purchase assets or services as a consequence of a
          default by any other person to pay any Indebtedness and "guaranteed"
          shall be construed accordingly; and

1.4.8     references to any enactment shall be deemed to include references to
          such enactment as re-enacted, amended or extended

2       The Commitment, the Loan and the Bank Guarantees

2.1     Agreement to lend and issue Bank Guarantees

        The Bank, relying upon each of the representations and warranties in
        clause 7, agrees, upon and subject to the terms of this Agreement (a) to
        lend to the Borrowers, jointly and severally, the principal sum of up to
        $60,200,000 in eight (8) Advances and (b) to issue the Bank Guarantees
        to the Builders.

2.2     Drawdown and Bank Guarantee issuance

2.2.1     Drawdown

          (a)  Subject to the terms and conditions of this Agreement, each
               Advance shall be made following receipt by the Bank from the
               Borrowers of a Drawdown Notice not later than 10:00 a.m. on the
               second Banking Day before the date, which shall be a Banking Day
               falling within the Drawdown Period, on which such Advance, is
               intended to be made. A Drawdown Notice shall be effective on
               actual receipt by the Bank and, once given, shall, subject as
               provided in clause 36.1, be irrevocable.

          (b)  This clause 2.2.1 shall not apply to any drawdown of an Advance
               made pursuant to clause 2.4.2 or clause 10.2.3.

2.2.2     Bank Guarantee issuance

          Subject to the terms and conditions of this Agreement, the Bank shall
          issue a Bank Guarantee following receipt by the Bank from the
          Borrowers of a Bank Guarantee Issue Request not later than 10:00 a.m.
          on the second Banking Day before the date, which shall be a Banking
          Day falling within the Availability Period, on which that Bank
          Guarantee is to be issued. A Bank Guarantee Issue Request shall be
          effective on actual receipt by the Bank and, once given, shall be
          irrevocable.

2.3     Timing and limitation of Advances and Bank Guarantees

2.3.1     The aggregate amount of the Advances shall not exceed $60,200,000, and
          each Advance shall, subject to the following provisions of this clause
          2.3 and the provisions of clause 2.4.2 and clause 10.2.3, be for such
          amount as is specified in the Drawdown Notice for that Advance.

2.3.2     The aggregate amount of all the Advances in respect of a Ship shall
          not exceed the lower of $30,100,000, (ii) the aggregate of the total
          amounts of the "1st instalment", the "2nd Instalment", the "3rd
          Instalment" and the "4th Instalment" of the Contract Price of the Ship
          relevant to such Advance payable under Article II 3(a), Article II
          3(b), Article II 3(c) and Article lI 3(d) of the relevant Contract and
          (iii) 50% of the Contract Price of that Ship;

2.3.3     The aggregate amount of each First Advance shall not exceed the lower
          of (i) $12,040,000, the total amount of the "1st Instalment" of the
          Contract Price of the Ship relevant to such Advance payable under
          Article 11 3(a) of the relevant Contract and (iii) 20% of the Contract
          Price of the relevant Contract.

2.3.4     Each First Advance shall be applied in or towards payment to the
          Builders of the "1st Instalment" of the Contract Price of the Ship
          relevant to such First Advance payable under Article II 3(a) of the
          relevant Contract.

2.3.5     The aggregate amount of each Second Advance shall not exceed the lower
          of (i) US$6,020,000, (ii) the total amount of the "2nd Instalment" of
          the Contract Price of the Ship relevant to such Advance payable under
          Article II 3(b) of the relevant Contract and (iii) 10% of the Contract
          Price of the relevant Contract.

2.3.6     Each Second Advance shall be applied in or towards payment to the
          Builders of the "2nd Instalment" of the Contract Price of the Ship
          relevant to such Second Advance payable under Article Il 3(b) of the
          relevant Contract.

2.3.7     The aggregate amount of each Third Advance shall not exceed the lower
          of (i) US$6,020,000, (ii) the total amount of the "3rd Instalment" of
          the Contract Price of the Ship relevant to such Advance payable under
          Article II 3(c) of the relevant Contract and (iii) 10% of the Contract
          Price of the relevant Contract.

2.3.8     Each Third Advance shall be applied in or towards payment to the
          Builders of the "3rd instalment" of the Contract Price of the Ship
          relevant to such Third Advance payable under Article II 3(c) of the
          relevant Contract.

2.3.9     The aggregate amount of each Fourth Advance shall not exceed the lower
          of (i) US$6,020,000, (ii) the total amount of the "4th Instalment" of
          the Contract Price of the Ship relevant to such Advance payable under
          Article II 3(d) of the relevant Contract and (iii) 10% of the Contract
          Price of the relevant Contract.

2.3.10    Each Fourth Advance shall be applied in or towards payment to the
          Builders of the "4th Instalment" of the Contract Price of the Ship
          relevant to such Fourth Advance payable under Article II 3(d) of the
          relevant Contract.

2.3.11    Clauses 2.3.3, 2.3.5, 2.3.7 and 2.3.9 shall apply in relation to' each
          First Advance, Second Advance, Third Advance or Fourth Advance (as the
          case may be), whether any such Advance is drawn down under clause
          2.4.1 or under clause 2.4.2 or under clause 10.2.3.

2.3.12    Each Advance shall be paid to the Builders on the date when the
          relevant instalment of the Contract Price relevant to such Advance is
          due, unless the relevant Borrower has already paid such instalment to
          the Builders in which case the relevant Advance shall be advanced to
          the Borrowers in refinancing of such payment to the Builders.

2.3.13    No First Advance may be drawn down in respect of a Ship unless the
          Bank Guarantee for that Ship has been issued.

2.3.14    No Second Advance may be drawn down in respect of a Ship unless the
          First Advance for that Ship has been drawn down.

2.3.15    No Third Advance may be drawn down in respect of a Ship unless the
          Second Advance for that Ship has been drawn down.

2.3.16    No Fourth Advance may be drawn down in respect of a Ship unless the
          Third Advance for that Ship has been drawn down.

2.3.17    The aggregate amount for which both Bank Guarantees are to be issued
          shall not exceed the Facility Commitment.

2.3.18    The aggregate amount for which each Bank Guarantee is to be issued
          shall not exceed the lower of (a) $36,451,100 and (b) such amount
          which, when aggregated with the Outstandings on the proposed Bank
          Guarantee Issue Date thereof, shall not exceed the Facility
          Commitment.

2.4     Availability

2.4.1     Following a Drawdown Notice

          Upon receipt of a Drawdown Notice complying with the terms of this
          Agreement in respect of an Advance, the Bank shall, subject to the
          provisions of clause 9, on the date specified in the Drawdown Notice
          make the relevant Advance available to the Borrowers in accordance
          with clause 6.2. The Borrowers acknowledge that payment of any Advance
          to the Builders in accordance with clause 6.2 shall satisfy the
          obligation of the Bank to lend that Advance to the Borrowers under
          this Agreement.

2.4.2     Following a demand

          Upon receipt of a demand made under a Bank Guarantee in respect of any
          of the "2nd Instalment", the "3rd Instalment" and the "4th Instalment"
          of the Contract Price of the Ship to which that Bank Guarantee
          relates, the Bank may (in its absolute discretion) advance to the
          Borrowers forthwith (whether or not at such time the Borrowers are in
          compliance with the relevant provisions of clause 9) the Advance
          intended to finance such instalment of the Contract Price of such
          Ship. The Bank shall advance such Advance by applying it immediately
          after drawdown in or towards discharge (in whole or, as the case may
          be, in part) of the Borrowers' liability to the Bank under clause
          2.5.1 in respect of the relevant payment made by the Bank under that
          Bank Guarantee.

2.4.3     Authorisation

          Upon receipt of a demand made under a Bank Guarantee in respect of the
          "2nd Instalment", the "3rd Instalment" and the "4th Instalment" of the
          Contract Price of the Ship to which that Bank Guarantee relates, the
          Borrowers shall not be entitled to give a Drawdown Notice to the Bank
          for the Advance intended to finance such instalment of the Contract
          Price of such Ship until further notice from the Bank in writing. The
          Borrowers hereby irrevocably and unconditionally authorise and direct
          the Bank to advance and apply such Advance in the manner and at the
          time referred to in clause 2.4.2 in the event that the Bank shall
          decide to do so pursuant thereto.

2.4.4     Automatic drawdown

          The Borrowers hereby agree and acknowledge that, once an Advance shall
          have been advanced pursuant to clause 2.4.2 or clause 10.2.3, it shall
          form part of the Loan as if it were drawn down pursuant to clauses
          2.2.1 and 2.4.1.

2.5     Payments under Bank Guarantees - constitute a loan

2.5.1     Each payment (whether of principal or interest) made by the Bank to
          the Builders under a Bank Guarantee shall constitute a loan advanced
          by the Bank to the Borrowers jointly and severally. Each such loan
          shall be (a) of a principal amount equal to the amount of such payment
          (whether of principal or interest) made by the Bank under such Bank
          Guarantee, (b) treated as advanced to the Borrowers at the time of
          such payment to the Builders and (c) due and repayable by the
          Borrowers at the time so advanced (or deemed advanced) to the
          Borrowers.

2.5.2     The Bank shall be entitled to pay immediately (but with prior notice
          to the Borrowers) any amount (whether of principal or interest) for
          which a demand or request has been made at any time under a Bank
          Guarantee, without any reference to, or further authority from, the
          Borrowers and shall not be under any duty to investigate or enquire
          whether any claim or demand on the Bank under such Bank Guarantee
          shall have been properly made notwithstanding that the Borrowers or
          either of them may dispute the validity of such claim or demand or
          that the relevant Borrower may have referred to arbitration under the
          relevant Contract the claim to which the Builders' demand under such
          Bank Guarantee relates. The liability of the Borrowers to the Bank
          under clause 2.5.1 and the Borrowers' liability under the terms of
          this Agreement and/or any other Security Documents to pay or, as the
          case may be, repay any amounts drawn down pursuant to clause 2.4.2 or
          clause 10.2.3, interest thereon and any other amounts payable under
          this Agreement and/or any other Security Documents in relation
          thereto, shall be in no way prejudiced, affected or diminished by the
          fact that the Bank was or might have been justified in refusing
          payment of any amount claimed or demanded under either Bank Guarantee.

2.6     Expiration or reduction of Bank Guarantee

        The Outstanding Amount of each Bank Guarantee shall be treated as
        reduced for the purposes of this Agreement only when and to the extent
        that (a) the Bank has received a written confirmation (in form and
        substance satisfactory to the Bank in its sole discretion) from the
        Builders of the amount of such reduction of the relevant Bank Guarantee
        or (b) the Bank is satisfied in its sole discretion that its liability
        under the relevant Bank Guarantee has been irrevocably reduced or (c)
        the Bank has made a payment under the relevant Bank Guarantee. The Bank
        shall in each case after a reduction notify the Borrowers of the amount
        and the date of such reduction.

2.7     Termination of Commitment and cancellation of Facility

2.7.1     Any part of the Commitment undrawn and uncancelled by the end of the
          Drawdown Period, shall thereupon be automatically cancelled.

2.7.2     If either Bank Guarantee is not issued by the end of the Availability
          Period, the Bank's obligation to issue such Bank Guarantee shall
          thereupon be automatically cancelled and the Facility Commitment shall
          be reduced accordingly.

2.8     Application of proceeds

        Without prejudice to the Borrowers' obligations under clause 8.1.3, the
        Bank shall have no responsibility for the application of proceeds of the
        Loan or any part thereof by the Borrowers.

3       Interest and Interest Periods

3.1     Normal interest rate

3.1.1     General

          The Borrowers shall pay interest on each Advance or (as the case may
          be) the Loan in respect of each Interest Period relating thereto on
          each Interest Payment Date (or, in the case of Interest Periods of
          more than six (6) months, by instalments, the first instalment six (6)
          months from the commencement of the Interest Period and the subsequent
          instalments at intervals of six (6) months or, if shorter, the period
          from the date of the preceding instalment until the Interest Payment
          Date relative to such interest Period) at the rate per annum
          determined by the Bank to be the aggregate of (a) the Margin and (b)
          LIBOR for such Interest Period.

3.1.2     Calculation of Margin

          (a)  The Bank shall, on each Margin Calculation Date, calculate the
               Leverage Ratio for the Measurement Period relevant to the Margin
               Period commencing on such Margin Calculation Date. based on the
               then latest audited consolidated financial statements of the
               Group delivered to the Bank pursuant to clause 8.1.5 of this
               Agreement and clause 5.1.4 of the Corporate Guarantee.

          (b)  Based on each such relevant calculation made by the Bank on a
               Margin Calculation Date, the Bank shall determine, and notify the
               Borrowers, of the Margin that shall apply during the Margin
               Period commencing on that Margin Calculation Date.

3.2     Selection of Interest Periods

        The Borrowers may by notice received by the Bank not later than 10:00
        a.m. on the second Banking Day before the beginning of each Interest
        Period specify whether such Interest Period shall have a duration of one
        (1) month, three (3) months, six (6) months, nine (9) months or (subject
        to availability to be determined solely by the Bank) twelve (12) months
        or such other period as the Borrowers may select and the Bank may, in
        its absolute discretion, agree Provided that the Borrowers may not
        select more than three (3) Interest Periods having a duration of one (1)
        month within the same calendar year.

3.3     Determination of Interest Periods

        Every Interest Period shall be of the duration specified by the
        Borrowers pursuant to clause 3.2 but so that:

3.3.1     the initial Interest Period for each Advance shall commence on the
          Drawdown Date for such Advance and each subsequent Interest Period for
          an Advance shall commence on the last day of the previous Interest
          Period for that Advance;

3.3.2     the initial Interest Period of each Advance to be drawn down in
          respect of a Ship (other than the First Advance for that Ship) shall
          end on the same date as the then current Interest Period of the
          Advances for that Ship and, on the last day of such Interest Period,
          the Advances for that Ship shall be consolidated for the purposes of
          this clause 3;

3.3.3     if any Interest Period for an Advance would otherwise overrun the
          Repayment Date for that Advance, then such Interest Period shall end
          on such Repayment Date; and

3.3.4     if the Borrowers fail to specify the duration of an Interest Period in
          accordance with the provisions of clause 3.2 and this clause 3.3 such
          Interest Period shall have a duration of three (3) months or such
          other period as shall comply with this clause 3.3.

3.4     Default interest

        If the Borrowers fail to pay any sum (including, without limitation, any
        sum payable pursuant to this clause 3.4) on its due date for payment
        under any of the Security Documents, the Borrowers shall pay interest on
        such sum on demand from the due date up to the date of actual payment
        (as well after as before judgement) at a rate determined by the Bank
        pursuant to this clause 3.4. The period beginning on such due date and
        ending on such date of payment shall be divided into successive periods
        of not more than six (6) months as selected by the Bank, each of which
        (other than the first, which shall commence on such due date) shall
        commence on the last day of the preceding such period. The rate of
        interest applicable to each such period shall be the aggregate (as
        determined by the Bank) of (a) two per cent (2%) per annum, (b) the
        Margin and (c) LIBOR for such period. Such interest shall be due and
        payable on the last day of each such period as determined by the Bank
        and each such day shall, for the purposes of this Agreement, be treated
        as an Interest Payment Date, provided that if such unpaid sum is an
        amount of principal which became due and payable, by reason of a
        declaration by the Bank under clause 10.2.2 or a prepayment pursuant to
        clauses 4.3 or 12.1, on a date other than an Interest Payment Date
        relating thereto, the first such period selected by the Bank shall be of
        a duration equal to the period between the due date of such principal
        sum and such Interest Payment Date and interest shall be payable on such
        principal sum during such period at a rate of two per cent (2%) above
        the rate applicable thereto immediately before it shall have become so
        due and payable. If, for the reasons specified in clause 3.6.1, the Bank
        is unable to determine a rate in accordance with the foregoing
        provisions of this clause 3.4, interest on any sum not paid on its due
        date for payment shall be calculated at a rate determined by the Bank to
        be two per cent (2%) per annum above the aggregate of the Margin and the
        cost of funds, to the Bank.

3.5     Notification of Interest Periods and interest rate

        The Bank shall notify the Borrowers promptly of the duration of each
        Interest Period and of each rate of interest determined by it under this
        clause 3.

3.6     Market disruption; non-availability

3.6.1     If and whenever, at any time prior to the commencement of any Interest
          Period, the Bank shall have determined (which determination shall, in
          the absence of manifest error, be conclusive):

          (a)  that adequate and fair means do not exist for ascertaining LIBOR
               during such Interest Period; or

          (b)  that deposits in Dollars are not available to the Bank in the
               London Interbank Market in the ordinary course of business in
               sufficient amounts to fund the Loan or any part thereof or any
               loan outstanding under clause 2.5 1 for such Interest Period,

          the Bank shall forthwith give notice (a "Determination Notice")
          thereof to the Borrowers. A Determination Notice shall contain
          particulars of the relevant circumstances giving rise to its issue.
          After the giving of any Determination Notice the undrawn amount of the
          Commitment shall not be borrowed and neither Bank Guarantee shall be
          issued by the Bank, until notice to the contrary is given to the
          Borrowers by the Bank.

3.6.2     During the period of ten (10) days after any Determination Notice has
          been given by the Bank under clause 3.6.1, the Bank shall certify an
          alternative basis (the "Substitute Basis") for maintaining the Loan or
          any loan outstanding under clause 25.1. The Substitute Basis may
          (without limitation) include alternative interest periods, alternative
          currencies or alternative rates of interest but shall include a margin
          above the cost of funds, if any, to the Bank equivalent to the Margin.
          Each Substitute Basis so certified shall be binding upon the Borrowers
          and shall take effect in accordance with its terms from the date
          specified in the Determination Notice until such time as the Bank
          notifies the Borrowers that none of the circumstances specified in
          clause 3.6.1 continues to exist whereupon the normal interest rate
          fixing provisions of this Agreement shall apply.

4       Repayment and prepayment

4.1     Repayment

        The Borrowers shall repay each Advance in full on the Repayment Date for
        such Advance.

4.2     Voluntary prepayment

        The Borrowers may prepay the Loan in whole or part (being Five hundred
        thousand Dollars ($500,000) or any larger sum which is an integral
        multiple of Five hundred thousand Dollars ($500,000)) on any Interest
        Payment Date relating to the part of the Loan to be prepaid without
        premium or penalty subject to payment by the Borrowers of all sums
        payable under clause 4.4.

4.3     Prepayment on Total Loss or transfer etc.

4.3.1     Before issuance of Bank Guarantee and first drawdown

          On a Ship becoming a Total Loss (or suffering damage or being involved
          in an incident which, in the opinion of the Bank, may result in such
          Ship subsequently being determined to be a Total Loss) or on or prior
          the date falling immediately prior to the completion of the novation,
          transfer or assignment of either Contract by the relevant Borrower in
          favour of another person (with the prior written consent of the Bank
          as and when required by the Security-Documents), in each case before
          the Bank Guarantee relevant to such Ship or Contract is issued and any
          Advance relevant to such Ship or Contract has been drawn down, then
          (a) the obligation of the Bank to issue such Bank Guarantee to the
          Builders and to advance any Advance relevant to such Ship or Contract
          shall immediately cease and (b) the Commitment shall be reduced by the
          aggregate amount of all the Advances for such Ship and (c) the
          Facility Commitment shall be reduced by $18,225,550.

4.3.2     Following issuance of a Bank Guarantee or first drawdown

          On a Ship becoming a Total Loss (or suffering damage or being involved
          in an incident which, in the opinion of the Bank, may result in such
          Ship subsequently being determined to be a Total Loss) or on or prior
          to the date falling immediately prior to the completion of the
          novation, transfer or assignment of either Contract by the relevant
          Borrower in favour of another person (with the prior written consent
          of the Bank as and when required by the Security Documents), in each
          case after the Bank Guarantee relevant to such Ship or Contract is
          issued, then (a) the Borrowers shall pay such amount to the Cash
          Collateral Account as the Bank shall require in its absolute
          discretion (being in any event not less than the then Outstanding
          Amount of the Bank Guarantee relating to such Ship) and (b) if any
          Advance relating to such Ship has been drawn down, the Borrowers shall
          prepay each such Advance in full and (c) (if applicable) the
          obligation of the Bank to advance any other Advance for that Ship
          shall immediately cease and the Commitment shall be reduced
          accordingly.

4.3.3     Total Loss

          For the purpose of this Agreement and the other Security Documents, a
          Total Loss in relation to a Ship shall be deemed to have occurred:

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

          (b)  in the case of a constructive total loss of such Ship, upon the
               date and at the time notice of abandonment of such Ship is given
               to the insurers of such Ship for the time being;

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

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

          (e)  in the case of hijacking, theft, condemnation, capture, seizure,
               arrest, detention or confiscation of a Ship (other than where the
               same amounts to Compulsory Acquisition of such Ship) by any
               Government Entity, or by persons purporting to act on behalf of
               any Government Entity, which deprives the Builders of the use of
               such Ship for more than twenty (20) days, upon the expiry of the
               period of ten (10) days after the date upon which the relevant
               hijacking, theft, condemnation, capture, seizure, arrest,
               detention or confiscation occurred.

4.4     Amounts payable on prepayment

        Any prepayment of all or part of the Loan under this Agreement shall be
        made together with (a) accrued interest on the amount to be prepaid to
        the date of such prepayment, (b) any additional amount payable under
        clauses 6.6 or 12.2 and (c) all others sums payable by the Borrowers to
        the Bank under this Agreement or any of the other Security Documents
        including, without limitation, any amounts payable under clause 11.

4.5     Notice of prepayment; reduction of repayment instalments

4.5.1     No prepayment may be effected under clause 4.2 unless the Borrowers
          shall have given the Bank at least fifteen (15) days' notice of their
          intention to make such prepayment. Every notice of prepayment shall be
          effective only on actual receipt by the Bank, shall be irrevocable,
          shall specify the amount to be prepaid and shall oblige the Borrowers
          to make such prepayment on the date specified. No amount prepaid under
          this Agreement may be reborrowed.

4.5.2     Any amount prepaid pursuant to clause 4.2 shall be applied in reducing
          all the Advances proportionately.

4.5.3     The Borrowers may not prepay the Loan or any part thereof save as
          expressly provided in this Agreement.

5       Fees and expenses

5.1     Fees

        The Borrowers shall pay to the Bank:

5.1.1     on the date of this Agreement, an arrangement fee of $60,204,

5.1.2     on each of the dates falling at three (3) monthly intervals after the
          date of this Agreement until the last day of the Drawdown Period and
          on the last day of the Drawdown Period, commitment commission computed
          from the date of this Agreement (in the case of the first payment of
          commission) and from the due date of the preceding payment of
          commission (in the case of each subsequent payment) at the rate of
          zero point one zero per cent (0.10%) per annum on the daily undrawn
          amount of the Commitment, Provided however that if a Bank Guarantee is
          issued, any accrued commitment commission on the Advances for the Ship
          to which such Bank Guarantee relates shall be payable on the relevant
          Bank Guarantee Issue Date and, as from such date, commitment
          commission shall no longer accrue or be payable on such Advances; and

5.1.3     in relation to each Bank Guarantee, on the relevant Bank Guarantee
          Issue Date and on each of the dates falling at three (3) monthly
          intervals after the relevant Bank Guarantee issue Date and falling
          prior to the relevant Bank Guarantee Expiry Date (each such date a
          "payment date"), guarantee commission in advance each time computed on
          each such payment date at a rate per annum equal to the Margin
          applicable on such payment date and payable on the Outstanding Amount
          for the relevant Bank Guarantee as of the relevant payment date and in
          respect of the three (3) month period falling immediately after such
          payment date.

          The fee referred to in clause 5.1.1 and the commission referred to in
          clauses 5.1.2 and 5.1.3 shall not be refundable in any circumstances
          and shall be payable by the Borrowers to the Bank whether or not any
          part of the Commitment is ever advanced, whether or not either Bank
          Guarantee is ever issued and whether or not any demand is made under
          either Bank Guarantee.

5.2     Expenses

        The Borrowers shall pay to the Bank on a full indemnity basis on demand
        all expenses (including legal, printing and out-of-pocket expenses)
        incurred by the Bank:

5.2.1     in connection with the negotiation, preparation, execution and, where
          relevant, registration of the Security Documents and the Bank
          Guarantees and of any amendment or extension of or the granting of any
          waiver or consent under, any of the Security Documents; and

5.2.2     in contemplation of, or otherwise in connection with, the enforcement
          of, or preservation of any rights under, any of the Security
          Documents, or otherwise in respect of the moneys owing under any of
          the Security Documents,

          together with interest at the rate referred to in clause 3.4 from the
          date on which such expenses were incurred to the date of payment (as
          well after as before judgement).

5.3     Value added tax

        All fees and expenses payable pursuant to this clause 5 shall be paid
        together with value added tax or any similar tax (if any) properly
        chargeable thereon.

5.4     Stamp and other duties

        The Borrowers shall pay all stamp, documentary, registration or other
        like duties or taxes (including any duties or taxes payable by the Bank)
        imposed on or in connection with any of the Underlying Documents, the
        Security Documents, each Bank Guarantee, the Loan, the Outstandings or
        the Facility and shall indemnify the Bank against any liability arising
        by reason of any delay or omission by the Borrowers to pay such duties
        or taxes.

6       Payments and taxes; accounts and calculations

6.1     No set-off or counterclaim

        The Borrowers acknowledge that in performing its obligations under this
        Agreement, the Bank will be incurring liabilities to third parties in
        relation to the funding of amounts to the Borrowers, such liabilities
        matching the liabilities of the Borrowers to the Bank and that it is
        reasonable for the Bank to be entitled to receive payments from the
        Borrowers gross on the due date in order that the Bank is put in a
        position to perform its matching obligations to the relevant third
        parties. Accordingly, all payments to be made by the Borrowers under any
        of the Security Documents shall be made in full, without any set-off or
        counterclaim whatsoever and, subject as provided in clause 6.6, free and
        clear of any deductions or withholdings, in Dollars on the due date to
        such account of the Bank at such bank in such place as the Bank may from
        time to time specify for this purpose.

6.2     Payment by the Bank

        All sums to be advanced by the Bank to the Borrowers under this
        Agreement in respect of the Loan shall be remitted in Dollars on the
        Drawdown Date for the relevant Advance and, in the case of amounts drawn
        down pursuant to clause 2.4.1 (but not pursuant to clause 2.4.2 or
        clause 10.2.3), to the account specified in the Drawdown Notice for such
        Advance.

6.3     Non-Banking Days

        When any payment under any of the Security Documents would otherwise be
        due on a day which is not a Banking Day, the due date for payment shall
        be extended to the next following Banking Day unless such Banking Day
        falls in the next calendar month in which case payment shall be made on
        the immediately preceding Banking Day.

6.4     Calculations

        All interest and other payments of an annual nature under any of the
        Security Documents shall accrue from day to day and be calculated on the
        basis of actual days elapsed (other than the guarantee commission
        referred to in clause 5.L3 which shall be payable in advance on a
        quarterly basis and as more particularly described therein) and a three
        hundred and sixty (360) day year.

6.5     Certificates conclusive

        Any certificate or determination of the Bank as to any rate of interest
        or any other amount pursuant to and for the purposes of any of the
        Security Documents shall, in the absence of manifest error, be
        conclusive and binding on the Borrowers.

6.6     Grossing-up for Taxes

        If at any time the Borrowers or either of them are required to make any
        deduction or withholding in respect of Taxes from any payment due under
        any of the Security Documents, the sum due from the Borrowers in respect
        of such payment shall be increased to the extent necessary to ensure
        that, after the making of such deduction or withholding, the Bank
        receives on the due date for such payment (and retains, free from any
        liability in respect of such deduction or withholding), a net sum equal
        to the sum which it would have received had no such deduction or
        withholding been required to be made and the Borrowers shall indemnify
        the Bank against any losses or costs incurred by it by reason of any
        failure of the Borrowers or either of them to make any such deduction or
        withholding or by reason of any increased payment not being made on the
        due date for such payment. The Borrowers shall promptly deliver to the
        Bank any receipts, certificates or other proof evidencing the amounts
        (if any) paid or payable in respect of any deduction or withholding as
        aforesaid.

6.7     Loan account

        The Bank shall maintain, in accordance with its usual practice, an
        account or accounts evidencing the amounts from time to time lent by,
        owing to and paid to it under the Security Documents. Such account or
        accounts shall, in the absence of manifest error, be conclusive as to
        the amount from time to time owing by the Borrowers under the Security
        Documents and any certificate from the Bank as to the amount from time
        to time owing by the Borrowers under the Security Documents shall, in
        the absence of manifest error, be conclusive and the sum specified in
        any such certificate shall be the certain and liquidated sum owing by
        the Borrowers to the Bank.

7       Representations and warranties

7.1     Continuing representations and warranties

        The Borrowers jointly and severally represent and warrant to the Bank
        that:

7.1.1     Due incorporation

          the Borrowers and each of the other Security Parties are duly
          incorporated and validly existing in good standing under the laws of
          their respective countries of incorporation as Marshall Islands
          corporations (in the case of the Borrowers and the Corporate
          Guarantor) and as companies with limited liability (in the case of the
          other Security Parties), and have power to carry on their respective
          businesses as they are now being conducted and to own their respective
          property and other assets;

7.1.2     Corporate power

          each of the Borrowers has power to execute, deliver and perform its
          obligations under the Underlying Documents and the Security Documents
          to which it is a party and to borrow the Commitment and each of the
          other Security Parties has power to execute and deliver and perform
          its obligations under the Underlying Documents and the Security
          Documents to which it is or is to be a party; all necessary corporate,
          shareholder and other action has been taken to authorise the
          execution, delivery and performance of the same and no limitation on
          the powers of either Borrower to borrow will be exceeded as a result
          of any transaction contemplated by this Agreement;

7.1.3     Binding obligations

          the Security Documents and the Underlying Documents constitute or
          will, when executed, constitute valid and legally binding obligations
          of the relevant Security Parties enforceable in accordance with their
          respective terms;

7.1.4     No conflict with other obligations

          the execution and delivery of, the performance of their respective
          obligations under, and compliance with the provisions of, the
          Underlying Documents and the Security Documents by the relevant
          Security Parties will not (i) contravene any existing applicable law,
          statute, rule or regulation or any judgment, decree or permit to which
          either of the Borrowers or any other Security Party is subject, (ii)
          conflict with, or result in any breach of any of the terms of, or
          constitute a default under, any agreement or other instrument to which
          either of the Borrowers or any other Security Party is a party or is
          subject or by which it or any of its property is bound, (iii)
          contravene or conflict with any provision of the memorandum and
          articles of association/articles of incorporation/by-laws/statutes or
          other constitutional documents of either of the Borrowers or any other
          Security Party or (iv) result in the creation or imposition of or
          oblige either of the Borrowers or any of its Related Companies or any
          other Security Party to create any Encumbrance (other than a Permitted
          Encumbrance) on the undertaking, assets, rights or revenues of either
          of the Borrowers or its Related Companies or any other Security Party;

7.1.5     No litigation

          no litigation, arbitration, investigation or proceeding
          (administrative or otherwise) is taking place, pending or, to the
          knowledge of the officers of either of the Borrowers, threatened
          against either of the Borrowers or any of its Related Companies or any
          other Security Party which could have a material adverse effect on the
          business, condition (financial or otherwise), assets or prospects of
          either of the Borrowers or any of their Related Companies or any other
          Security Party;

7.1.6     No filings required

          it is not necessary to ensure the legality, validity, enforceability
          or admissibility in evidence of any of the Underlying Documents or the
          Security Documents that they or any other instrument be notarised,
          filed, recorded, registered or enrolled in any court, public office or
          elsewhere in any Relevant Jurisdiction or that any stamp, registration
          or similar tax or charge be paid in any Relevant Jurisdiction on or in
          relation to any of the Underlying Documents or the Security Documents
          and each of the Underlying Documents and the Security Documents is in
          proper form for its enforcement in the courts of each Relevant
          Jurisdiction;

7.1.7     Choice of law

          the choice of English law to govern the Underlying Documents and the
          Security Documents and the submissions by the Security Parties to the
          non-exclusive jurisdiction of the English courts or, as the case may
          be, the courts of Piraeus, are valid and binding,

7.1.8     No immunity

          neither of the Borrowers nor any other Security Party nor any of their
          respective assets is entitled to immunity on the grounds of
          sovereignty or otherwise from any legal action or proceeding (which
          shall include, without limitation, suit, attachment prior to
          judgement, execution or other enforcement);

7.1.9     Shareholdings

          each of the Borrowers is a wholly-owned direct Subsidiary of the
          Corporate Guarantor and, on the date of this Agreement, no less than
          2O% of the voting share capital of the Corporate Guarantor is
          ultimately beneficially owned by such two (2) persons and their
          immediate families as were disclosed by the Borrowers to the Bank in
          the negotiation of this Agreement; and

7.1.10    Consents obtained

          every consent, authorisation, licence or approval of, or registration
          with or declaration to, governmental or public bodies or authorities
          or courts required by any Security Party to authorise, or required by
          any Security Party in connection with, the execution, delivery,
          validity, enforceability or admissibility in evidence of each of the
          Underlying Documents and the Security Documents or the performance by
          each Security Party of its obligations under the Underlying Documents
          and the Security Documents has been obtained or made and is in full
          force and effect and there has been no default in the observance of
          any of the conditions or restrictions (if any) imposed in, or in
          connection with, any of the same;

7.1.11    Financial statements correct and complete

          the consolidated financial statements of the Group in respect of the
          financial half-year ended 30 June 2006 as delivered to the Bank have
          been prepared in accordance with the Applicable Accounting Principles
          which have been consistently applied and present fairly and accurately
          the consolidated financial position of the Group as at such date and
          the consolidated results of the operations of the Group for the period
          ended on such date and, as at such date, neither the Corporate
          Guarantor nor any of its Subsidiaries had any significant liabilities
          (contingent or otherwise) or any unrealised or anticipated losses
          which are not disclosed by, or reserved against or provided for in,
          such financial statements;

7.1.12    No material adverse change

          there has been no material adverse change:

          (a)  in the business, assets, operations, prospects or condition
               (financial or otherwise) of the Corporate Guarantor, the
               Borrowers or the Group as a whole, from that described by or on
               behalf of the Borrowers or any other Security Party to the Bank
               in the negotiation of this Agreement; or

          (b)  in the business, assets, operations, prospects or the financial
               position of the Corporate Guarantor or the Group as a whole from
               that set forth in the semi-annual consolidated financial
               statements of the Group for the financial half-year ended 30 June
               2006; or

          (c)  in the ability of either of the Borrowers, the Corporate
               Guarantor or any other Security Party to comply with any of their
               respective obligations under the Security Documents or any of
               them; or

          (d)  in the legality, validity or enforceability of any of the
               Security Documents or any of the rights or remedies of the Bank
               thereunder;

7.1.13    Borrowers' own account

          in relation to the borrowing by each Borrower of the loan or any part
          thereof, the performance and discharge of its obligations and
          liabilities under the Security Documents and the transactions and
          other arrangements effected or contemplated by this Agreement, each
          Borrower is acting for its own account and that the foregoing will not
          involve or lead to a contravention of any law, official requirement or
          other regulatory measure or procedure which has been implemented to
          combat "money laundering" (as defined in Article 1 of the Directive
          (91/3O8/EEC) of the Council of the European Communities (as amended));
          and

7.1.14    Solvency

          (a)  neither of the Borrowers nor any other Relevant Party is unable,
               or admits or has admitted its inability, to pay its debts or has
               suspended making payments on any of its debts;

          (b)  neither of the Borrowers nor any other Relevant Party by reason
               of actual or anticipated financial difficulties has commenced, or
               intends to commence, negotiations with one or more of its
               creditors with a view to rescheduling any of its Indebtedness;

          (c)  the value of the assets of each of the Borrowers and the other
               Relevant Parties is not less than their respective liabilities
               (taking into account contingent and prospective liabilities); and

          (d)  no moratorium has been, or may, in the reasonably foreseeable
               future be, declared in respect of any Indebtedness of either
               Borrower or any other Relevant Party.

7.2     Initial representations and warranties

        The Borrowers further jointly and severally represent and warrant to the
        Bank that:

7.2.1     Pari passu

          the obligations of each Borrower under this Agreement are direct,
          general and unconditional obligations of such Borrower and rank at
          least pari passu with all other present and future unsecured and
          unsubordinated Indebtedness of such Borrower with the exception of any
          obligations which are mandatorily preferred by law and not by
          contract;

7.2.2     No default under other Indebtedness

          neither of the Borrowers nor any of their Related Companies nor any
          other Security Party is (nor would with the giving of notice or lapse
          of time or the satisfaction of any other condition or combination
          thereof be) in breach of or in default under any agreement relating to
          Indebtedness to which it is a party or by which it may be bound;

7.2.3     Information

          the information, exhibits and reports furnished by any Security Party
          to the Bank in connection with the negotiation and preparation of the
          Security Documents are true and accurate in all material respects and
          not misleading and all expressions of opinion contained therein
          genuinely reflect the opinions of the directors and the senior
          management of the Borrowers and the Corporate Guarantor and are based
          on reasonable assumptions; do not omit material facts and all
          reasonable enquiries have been made to verify the facts and statements
          contained therein; there are no other facts the omission of which
          would make any fact or statement therein misleading;

7.2.4     No withholding Taxes

          no Taxes are imposed by withholding or otherwise on any payment to be
          made by any Security Party under any of the Underlying Documents or
          the Security Documents or are imposed on or by virtue of the execution
          or delivery by the Security Parties of any of the Underlying Documents
          or the Security Documents or any other document or instrument to be
          executed or delivered under any of the Security Documents;

7.2.5     No Default

          no Default has occurred and is continuing;

7.2.6     No Default under Contracts or Refund Guarantees

          neither of the Borrowers is in default of any of its obligations under
          the relevant Contract or any of its obligations upon the performance
          or observance of which depend the continued liability of the Refund
          Guarantor in accordance with the terms of any Refund Guarantee
          relating to such Contract;

7.2.7     Freedom from Encumbrances

          (a)  neither of the Borrowers has previously charged, encumbered or
               assigned the benefit of any of its rights, title and interest in
               or to the relevant Contract or any relevant Refund Guarantee and
               such benefit and all such rights, title and interest are freely
               assignable and chargeable in the manner contemplated by the
               Security Documents;

          (b)  neither the Cash Collateral Account nor any other properties or
               rights which are, or are to be, the subject of any of the
               Security Documents nor any part thereof is nor will be, on the
               first Bank Guarantee Issue Date or on the first Drawdown Date,
               subject to any Encumbrance (other than Permitted Encumbrances);
               and

7.2.8     Copies true and complete

          the originals of the executed Refund Guarantees delivered or to be
          delivered to the Bank pursuant to clause 9.1 are, or will when
          delivered be, true and complete originals of such documents and the
          copies of the other Underlying Documents delivered or to be delivered
          to the Bank pursuant to clause 9.1 are, or will when delivered be,
          true and complete copies of such documents; such documents constitute
          valid and binding obligations of the parties thereto enforceable in
          accordance with their respective terms and there will have been no
          amendments or variations thereof or defaults thereunder.

7.3     Repetition of representations and warranties

        On and as of each Bank Guarantee Issue Date and on each Drawdown Date
        and (except in relation to the representations and warranties in clause
        7.2) on each Interest Payment Date, the Borrowers shall (a) be deemed to
        repeat the representations and warranties in clauses 7.1 and 7.2 as if
        made with reference to the facts and circumstances existing on such day
        and (b) be deemed to further represent and warrant to the Bank that the
        then latest financial statements of the Group delivered to the Bank (if
        any) have been prepared in accordance with the Applicable Accounting
        Principles which have been consistently applied and present fairly and
        accurately the consolidated financial position of the Group as at the
        end of the financial period to which the same relate and the
        consolidated results of the operations of the Group for the financial
        period to which the same relate and, as at the end of such financial
        period, neither the Corporate Guarantor nor any of its Subsidiaries had
        any significant liabilities (contingent or otherwise) or any unrealised
        or anticipated losses which are not disclosed by, or reserved against or
        provided for in, such financial statements.

8       Undertakings

8.1     General

        Each of the Borrowers hereby undertakes with the Bank that, from the
        date of this Agreement and so long as the Borrowers remain under any
        obligation, actual or contingent, under this Agreement or any moneys are
        owing under any of the Security Documents and while all or any part of
        the Commitment remains outstanding, it will:

8.1.1     Notice of Default

          (a)  promptly inform the Bank of any occurrence of which it becomes
               aware which might adversely affect the ability of any Security
               Party to perform its obligations under any of the Security
               Documents and, without limiting the generality of the foregoing,
               will inform the Bank of any Default forthwith upon becoming aware
               thereof and will from time to time, if so requested by the Bank,
               confirm to the Bank in writing that, save as otherwise stated in
               such confirmation, no Default has occurred and is continuing; and

          (b)  promptly inform the Bank of any occurrence of which it becomes
               aware which might adversely affect the ability or rights of
               either Borrower to make any claims under any relevant Refund
               Guarantee or the relevant Contract or which might reduce or
               release any of the obligations of the Refund Guarantor under any
               such Refund Guarantee or of the Builders under such Contract;

8.1.2     Consents and licences

          without prejudice to clauses 8.2 and 9, obtain or cause to be
          obtained, maintain in full force and effect and comply in all material
          respects with the conditions and restrictions (if any) imposed in, or
          in connection with, every consent, authorisation, licence or approval
          of governmental or public bodies or authorities or courts and do, or
          cause to be done, all other acts and things which may from time to
          time be necessary or desirable under applicable law for the continued
          due performance of all the obligations of the Security Parties under
          each of the Security Documents;

8.1.3     Conveyance on default

          where either Ship is (or is to be) sold in exercise of any power
          contained in the Pre-delivery Security Assignment relating to such
          Ship or otherwise conferred on the Bank, execute, forthwith upon
          request by the Bank, such form of conveyance of such Ship as the Bank
          may require;

8.1.4     Pari passu

          ensure that its obligations under this Agreement shall, without
          prejudice to the provisions of clause 8.2 and the security intended to
          be created by the Security Documents, at all times rank at least pari
          passu with all its other present and future unsecured and
          unsubordinated Indebtedness with the exception of any obligations
          which are mandatorily preferred by law and not by contract;

8.1.5     Financial statements

          prepare or cause to be prepared consolidated financial statements of
          the Group in accordance with the Applicable Accounting Principles
          consistently applied in respect of each financial year and cause the
          same to be reported on by the Group's auditors and prepare or cause to
          be prepared unaudited consolidated financial statements of the Group
          for each financial-half year on the same basis as the annual
          statements, and deliver as many copies of the same as the Bank may
          reasonably require as soon as practicable but not later than one
          hundred and eighty (180) days (in the case of the audited financial
          statements) or ninety (90) days (in the case of the unaudited
          financial statements) after the end of the financial period to which
          they relate;

8.1.6     Delivery of reports

          deliver to the Bank as many copies as the Bank may reasonably require
          at the time of issue thereof of every report, circular, notice or like
          document issued by the Borrowers to their shareholders or creditors
          generally;

8.1.7     Provision of further information

          provide the Bank with such financial and other information concerning
          the Borrowers, their Related Companies, the other Security Parties,
          any Relevant Parties and their respective operations and affairs as
          the Bank may from time to time reasonably require;

8.1.8     Use of proceeds

          use the Loan exclusively for the purpose specified in clauses 1.1 and
          2.3;

8.1.9     Obligations under Security Documents

          duly and punctually perform each of the obligations expressed to be
          assumed by it under the Security Documents;

8.1.10    Certificate of no Default

          (without prejudice to clause 8.1.1) at the same time as the Borrowers
          and/or the Corporate Guarantor provide the Bank with financial
          statements pursuant to clause 8.1.5 of this Agreement and clause 5.1.4
          of the Corporate Guarantee, provide the Bank with a certificate signed
          by a member of the board of each Borrower and the Corporate Guarantor,
          confirming that, save as otherwise stated in such certificate, no
          Default has occurred and is continuing;

8.1.11    Consents and acknowledgements

          deliver to the Bank, not later than thirty (30) days after the earlier
          of (i) the first Drawdown Date and (ii) the first Bank Guarantee Issue
          Date:

          (a)  each Refund Guarantee Assignment Consent and Acknowledgement in
               respect of each Refund Guarantee, each duly executed by the
               parties thereto;

          (b)  each Contract Assignment Consent and Acknowledgement, each duly
               executed by the parties thereto;

          (c)  evidence in form and substance satisfactory to the Bank of the
               authority of the parties executing the above said
               acknowledgments;

          (d)  evidence that each Refund Guarantee has been duly registered with
               SAFE; and

          (e)  a legal opinion (at the expense of the Borrowers) issued by the
               Bank's special legal advisers on matters of Chinese law in form
               and substance satisfactory to the Bank;

8.1.12    Supervision

          ensure that it, or the Manager or any other person appointed by the
          Manager and acceptable to the Bank (but no other person), will
          supervise and superintend the construction of its Ship; and

8.1.13    Know your customer information

          deliver to the Bank such documents and evidence as the Bank shall from
          time to time require relating to the verification of identity, and
          knowledge of its customers and the compliance by the Bank with all
          necessary "know your customer or similar checks, always on the basis
          of applicable laws and regulations or the Bank's own internal
          guidelines, in each case as such laws, regulations or internal
          guidelines apply from time to time.

8.2     Negative undertakings

        Each of the Borrowers undertakes with the Bank that, from the date of
        this Agreement and so long as the Borrowers remain under any obligation,
        actual or contingent, under this Agreement or any moneys are owing under
        any of the Security Documents and while all or any part of the
        Commitment remains outstanding, it will not, without the prior written
        consent of the Bank.

8.2.1     Negative pledge

          permit any Encumbrance (other than a Permitted Encumbrance) by any
          Security Party (other than Builders and the Refund Guarantor) to
          subsist, arise or be created or extended over all or any part of their
          respective present or future undertakings, assets, rights or revenues
          to secure or prefer any present or future Indebtedness of any Security
          Party or any other person;

8.2.2     No merger

          and will procure that the Corporate Guarantor will not, without the
          prior written consent of the Bank, merge or consolidate with any other
          company or person or enter into any demerger, amalgamation or
          corporate reconstruction or redomiciliation of any kind whatsoever;

8.2.3     Disposals

          sell, transfer, abandon lend or otherwise dispose of or cease to
          exercise direct control over any part (being either alone or, when
          aggregated with all other disposals falling to be taken into account
          pursuant to this clause 8.2.3, material in the opinion of the Bank in
          relation to the undertaking, assets, rights and revenues of such
          Borrower) of its present or future undertaking, assets, rights or
          revenues (otherwise than by transfers, sales or disposals for full
          consideration in the ordinary course of trading but excluding in any
          event the assets and rights which are the subject of security created
          by the Security Documents), whether by one or a series of transactions
          related or not;

8.2.4     Other business

          undertake any business other than the performance of the Contract
          relevant to such Borrower, including the supervision of the building
          and construction of the relevant Ship pursuant to such Contract and
          will procure that the Corporate Guarantor will not, without the prior
          written consent of the Bank, undertake any business other than that
          conducted by the Corporate Guarantor on the date of this Agreement;

8.2.5     Acquisitions

          acquire any further assets other than the relevant Ship and the
          relevant Contract and rights arising under contracts entered into by
          or on behalf of such Borrower in the ordinary course of its business
          of performing the Contract relevant to such Ship;

8.2.6     Other obligations

          incur any obligations except for obligations arising under the
          relevant Underlying Documents or the Security Documents or contracts
          entered into in the ordinary course of its business of performing the
          Contract relevant to such Ship;

8.2.7     No borrowing

          incur any Borrowed Money except for Borrowed Money pursuant to the
          Security Documents;

8.2.8     Repayment of borrowings

          repay the principal of, or pay interest on, or any other sum in
          connection with, any of its Borrowed Money except for Borrowed Money
          pursuant to the Security Documents;

8.2.9     Guarantees

          issue any guarantees or indemnities or otherwise become directly or
          contingently liable for the obligations of any person, firm, or
          corporation except pursuant to the Security Documents;

8.2.10    Loans

          make any loans or grant any credit (save for normal trade credit in
          the ordinary course of business) to any person or agree to do so;

8.2.11    Sureties

          permit any of its Indebtedness to be guaranteed or otherwise assured
          against financial loss by any person;

8.2.12    Shareholdings

          change, cause or permit any change in, the legal and/or ultimate
          beneficial ownership of either of the Borrowers or the Corporate
          Guarantor which would result in (a) either of the Borrowers ceasing to
          be a wholly owned direct Subsidiary of the Corporate Guarantor and/or
          (b) less than twenty per cent (20%) of the issued voting share capital
          of the Corporate Guarantor being ultimately beneficially owned by such
          two (2) persons and their immediate families as were disclosed by the
          Borrowers to the Bank in the negotiation of this Agreement to be the
          ultimate beneficial owners of no less than 20% of the shares in the
          Corporate Guarantor on the date of this Agreement;

8.2.13    Share capital and distribution

          purchase or otherwise acquire for value any shares of its capital or
          declare or pay any dividends or distribute any of its present or
          future assets, undertaking, rights or revenues to any of its
          shareholders;

8.2.14    Constitutional documents

          agree to any amendment or variation of its constitutional documents;
          or

8.2.15    Subsidiaries

          form or acquire any Subsidiaries.

9       Conditions

9.1     Documents and evidence

9.1.1     Commitment

          The obligation of the Bank to make the Commitment available shall be
          subject to the condition that the Bank or its duly authorised
          representative shall have received, not later than two (2) Banking
          Days before the date of this Agreement, the documents and evidence
          specified in Part 1 of schedule 2 in form and substance satisfactory
          to the Bank.

9.1.2     Bank Guarantee

          The obligation of the Bank to issue either Bank Guarantee shall be
          subject to the conditions that the Bank or its duly authorised
          representative shall have received, not later than two (2) Banking
          Days before the day on which the first Bank Guarantee Issue Request is
          given, the documents and evidence specified in Part 1 of schedule 2 in
          form and substance satisfactory to the Bank.

9.1.3     First Advances

          The obligation of the Bank to make a First Advance available shall be
          subject to the condition that the Bank or its duly authorised
          representative shall have received, not later than two (2) Banking
          Days before the day on which the Drawdown Notice for such First
          Advance is given, the documents and evidence specified in Part 2 of
          schedule 2 in respect of such First Advance in form and substance
          satisfactory to the Bank.

9.1.4     Second Advances

          The obligation of the Bank to make a Second Advance available shall be
          subject to the condition that the Bank or its duly authorised
          representative shall have received, on or prior to the drawdown of
          such Second Advance, the relevant documents and evidence specified in
          Part 3 of schedule 2 in respect of such Second Advance in form and
          substance satisfactory to the Bank.

9.1.5     Third Advances

          The Bank to make a Third Advance available shall be subject to the
          condition that the Bank or its duly authorised representative shall
          have received on or prior to the drawdown of such Third Advance the
          relevant documents and evidence specified in Part 4 of schedule 2 in
          respect of such Third Advance in form and substance satisfactory to
          the Bank.

9.1.6     Fourth Advances

          The obligation of the Bank to make a Fourth Advance available shall be
          subject to the condition that the Bank or its duly authorised
          representative shall have received on or prior to the drawdown of such
          Fourth Advance the relevant documents and evidence specified in Part 5
          of schedule 2 in respect of such Fourth Advance in form and substance
          satisfactory to the Bank.

9.2       General conditions precedent

          The obligation of the Bank to make any Advance available or to issue
          either Bank Guarantee shall be subject to the further conditions that
          (a) at the time of the giving of the Drawdown Notice in respect of the
          relevant Advance or, as the case may be, at the time of the giving of
          the relevant Bank Guarantee Issue Request and (b) at the time of the
          making of the relevant Advance or, as the case may be, at the relevant
          Bank Guarantee Issue Date:

9.2.1     the representations and warranties contained in (a) clauses 7.1, 7.2
          and 7.3(b) and (b) clause 4 of the Corporate Guarantee, are true and
          correct on and as of each such time as if each was made with respect
          to the facts and circumstances existing at such time; and

9.2.2     no Default shall have occurred and be continuing or would result from
          the making of such Advance or, as the case may be, the issuing of such
          Bank Guarantee.

9.3     Waiver of conditions precedent

        The conditions specified in this clause 9 are inserted solely for the
        benefit of the Bank and may be waived by the Bank in whole or in part
        and with or without conditions.

9.4     Further conditions precedent

        Not later than five (5) Banking Days prior to each Drawdown Date and
        each Bank Guarantee Issue Date and not later than five (5) Banking Days
        prior to each Interest Payment Date, the Bank may request and the
        Borrowers shall, not later than two (2) Banking Days prior to such date,
        deliver to the Bank on such request further favourable certificates
        and/or opinions as to any or all of the matters which are the subject of
        clauses 7, 8, 9 and 10 of this Agreement.

10      Events of Default

10.1    Events

        There shall be an Event of Default if:

10.1.1    Non-payment: any Security Party fails to pay any sum payable by it
          under any of the Security Documents at the time, in the currency and
          in the manner stipulated in the Security Documents (and so that, for
          this purpose, sums payable on demand shall be treated as having been
          paid at the stipulated time if paid within three (3) Banking Days of
          demand); or

10.1.2    Breach of material obligations: either Borrower commits any breach of
          or omits to observe any of the obligations or undertakings expressed
          to be assumed by it under clauses 8.1.5 or 8.2 or the Corporate
          Guarantor commits any breach of or omits to observe any of the
          obligations or undertakings expressed to be assumed by it under
          clauses 5.1.4, 5.2 or 5.3 of the Corporate Guarantee; or

10.1.3    Breach of other obligations: any Security Party commits any breach of
          or omits to observe any of its obligations or undertakings expressed
          to be assumed by it under any of the Security Documents (other than
          those referred to in clauses 10.1 1 and 10.1.2 above) and, in respect
          of any such breach or omission which in the opinion of the Bank is
          capable of remedy, such action as the Bank may require shall not have
          been taken within fourteen (14) days (or any other longer period that
          the Bank may agree in its sole discretion) of the Bank notifying the
          relevant Security Party of such default and of such required action;
          or

10.1.4    Misrepresentation: any representation or warranty made or deemed to be
          made or repeated by or in respect of any Security Party in or pursuant
          to any of the Security Documents or in any notice, certificate or
          statement referred to in or delivered under any of the Security
          Documents is or proves to have been incorrect or misleading in any
          material respect; or

10.1.5    Cross-default: any Indebtedness of any Security Party or other
          Relevant Party is not paid when due or any Indebtedness of any
          Security Party or other Relevant Party becomes (whether by declaration
          or automatically in accordance with the relevant agreement or
          instrument constituting the same) due and payable prior to the date
          when it would otherwise have become due (unless as a result of the
          exercise by the relevant Security Party or other Relevant Party of a
          voluntary right of prepayment), or any creditor of any Security Party
          or other Relevant Party becomes entitled to declare any such
          Indebtedness due and payable or any facility or commitment available
          to any Security Party or other Relevant Party relating to Indebtedness
          is withdrawn, suspended or cancelled by reason of any default (however
          described) of the person concerned (unless the relevant Security Party
          or other Relevant Party shall have satisfied the Bank that such
          withdrawal, suspension or cancellation will not affect or prejudice in
          any way the relevant Security Party's or other Relevant Party's
          ability to pay its debts as they fall due and fund its commitments),
          or any guarantee given by any Security Party or other Relevant Party
          in respect of Indebtedness is not honoured when due and called upon;
          or

10.1.6    Consents and authorisations: any consent, authorisation, licence or
          approval of, or registration with or declaration to, governmental or
          public bodies or authorities or courts required by either Borrower or
          any other Security Party to authorise, or required by either Borrower
          or any other Security Party in connection with, the execution,
          delivery, validity, enforceability or admissibility in evidence of any
          of the Security Documents or the performance by either Borrower or any
          such Security Party of its obligations under any of the Security
          Documents is modified in a manner unacceptable to the Bank or is not
          granted or is revoked or terminated or expires and is not renewed or
          otherwise ceases to be in full force and effect; or

10.1.7    Legal process: any judgement or order made against any Security Party
          or other Relevant Party is not stayed or complied with within seven
          (7) days or a creditor attaches or takes possession of, or a distress,
          execution, sequestration or other process is levied or enforced upon
          or sued out against, any of the undertakings, assets, rights or
          revenues of any Security Party or other Relevant Party and is not
          discharged within seven (7) days; or

10.1.8    Insolvency: any Security Party or other Relevant Party is unable or
          admits inability to pay its debts as they fall due; suspends making
          payments on any of its debts or announces an intention to do so,
          becomes insolvent; has assets the value of which is less than the
          value of its liabilities (taking into account contingent and
          prospective liabilities); or suffers the declaration of a moratorium
          in respect of any of its Indebtedness; or any corporate action, legal
          proceedings or other procedure or step is taken in relation to any of
          the above; or

10.1.9    Reduction or loss of capital: a meeting is convened by any Security
          Party or other Relevant Party for the purpose of passing any
          resolution to purchase, reduce or redeem any of its share capital; or

10.1.10   Winding up: any corporate action, legal proceedings or other procedure
          or step is taken for the purpose of winding up any Security Party or
          other Relevant Party or an order is made or resolution passed for the
          winding up of any Security Party or other Relevant Party or a notice
          is issued convening a meeting for the purpose of passing any such
          resolution; or

10.1.11   Administration: any petition is presented, notice given or other step
          is taken for the purpose of the appointment of an administrator of any
          Security Party or other Relevant Party (not being a petition which the
          Borrowers can demonstrate to the satisfaction of the Bank, by
          providing an opinion of leading counsel to that effect, is frivolous,
          vexatious or an abuse of the process of the court) or the Bank
          believes in its reasonable opinion that any such petition or other
          step is imminent or an administration order is made in relation to any
          Security Party or other Relevant Party; or

10.1.12   Appointment of receivers, managers etc.: any administrative or other
          receiver, liquidator, compulsory manager or other similar officer is
          appointed of any Security Party or other Relevant Party or any part of
          its assets and/or undertaking or any other steps are taken to enforce
          any Encumbrance over all or any part of the assets of any Security
          Party or other Relevant Party; or

10.1.13   Compositions: any corporate action, legal proceedings or other
          procedures or steps are taken, or negotiations commenced, by any
          Security Party or other Relevant Party or by any of its creditors with
          a view to the general readjustment or rescheduling of all or part of
          its indebtedness or to proposing any kind of composition, compromise
          or arrangement involving such company and any of its creditors; or

10.1.14   Analogous proceedings: there occurs, in relation to any Security Party
          or other Relevant Party, in any country or territory in which any of
          them carries on business or to the jurisdiction of whose courts any
          part of their assets is subject, any event which, in the opinion of
          the Bank, appears in that country or territory to correspond with, or
          have an effect equivalent or similar to, any of those mentioned in
          clauses 10.1.7 to 10.1.13 (inclusive) or any Security Party or other
          Relevant Party otherwise becomes subject. in any such country or
          territory, to the operation of any law relating to insolvency;
          bankruptcy or liquidation; or

10.1.15   Cessation of business: any Security Party or other Relevant Party
          suspends or ceases or threatens to suspend or cease to carry on its
          business; or

10.1.16   Seizure: all or a material part of the undertakings, assets, rights or
          revenues of, or shares or other ownership interests in, any Security
          Party or other Relevant Party are seized, nationalised, expropriated
          or compulsorily acquired by or under the authority of any Government
          Entity; or

10.1.17   Invalidity: any of the Security Documents shall at any time and for
          any reason become invalid or unenforceable or otherwise cease to
          remain in full force and effect, or if the validity or enforceability
          of any of the Security Documents shall at any time and for any reason
          be contested by any Security Party which is a party thereto, or if any
          such Security Party shall deny that it has any, or any further,
          liability thereunder; or

10.1.18   Unlawfulness: it becomes impossible or unlawful at any time for any
          Security Party to fulfil any of the covenants and obligations
          expressed to be assumed by it in any of the Security Documents or for
          the Bank to exercise the rights or any of them vested in it under any
          of the Security Documents or otherwise; or

10.1.19   Repudiation: any Security Party repudiates any of the Security
          Documents or does or causes or permits to be done any act or thing
          evidencing an intention to repudiate any of the Security Documents; or

10.1.20   Encumbrances enforceable: any Encumbrance in respect of any of the
          property (or part thereof) which is the subject of any of the Security
          Documents becomes enforceable; or

10.1.21   Material adverse change: there occurs an event or series of events
          which, in the opinion of the Bank might have a material adverse effect
          on:

          (a)  the business, assets, operations, prospects or condition
               (financial or otherwise) of any Security Party or any other
               Relevant Party or the Group as a whole; or

          (b)  the ability of any Security Party to comply with or perform any
               of its obligations under the terms of any of the Security
               Documents, or

          (c)  the legality, validity or enforceability of any of the Security
               Documents or the rights or remedies of the Bank thereunder; or

10.1.22   Change in shareholdings: there is any change in the legal and/or
          ultimate beneficial ownership of any of the shares in either Borrower
          or the Corporate Guarantor which results in:

          (a)  either of the Borrowers ceasing to be a wholly-owned direct
               Subsidiary of the Corporate Guarantor; and/or

          (b)  less than 20% of the issued voting share capital of the Corporate
               Guarantor being ultimately beneficially owned by such two (2)
               persons and their immediate families as were disclosed by the
               Borrowers to the Bank in the negotiation of this Agreement to be
               the ultimate beneficial owners of no less than 20% of the shares
               in the Corporate Guarantor on the date of this Agreement; or

10.1.23   Demand under Bank Guarantee: a demand is made under either Bank
          Guarantee; or

10.1.24   Termination or variation of Contracts: either Contract is terminated
          or rescinded for any reason whatsoever or either Contract is
          frustrated or either Contract is varied in any manner not permitted by
          or pursuant to the relevant Pre-delivery Security Assignment or this
          Agreement, or

10.1.25   Termination of Refund Guarantees: any Refund Guarantee is repudiated,
          cancelled, rescinded or otherwise revoked or terminated (other than by
          the. return of such Refund Guarantee by the relevant Borrower to the
          Builders and/or the Refund Guarantor on or following the Delivery of
          the Ship relevant to such Refund Guarantee); or

10.1.26   Non-Delivery of Ship: either Ship is not delivered to, and accepted
          by, the relevant Borrower under the relevant Contract by 31 December
          2010; or

10.1.27   Bank Guarantee in force: the Bank believes, in its absolute
          discretion, that the Bank Guarantees have not expired and the
          Outstanding Amount in respect of each Bank Guarantee has not been
          reduced to zero (0), in each case, by 31 December 2010; or

10.1.28   Cash Collateral Account: moneys are withdrawn from the Cash Collateral
          Account other than in accordance with clause 14 or the Account Pledge;
          or

10.1.29   Payments under Refund Guarantees: any claim made under any Refund
          Guarantee is not paid by the Refund Guarantor at the time specified
          by, and in accordance with, the terms of the relevant Refund
          Guarantee, after receipt by the Refund Guarantor of the relevant
          written demand thereunder; or

10.1.30   Material events: any other event occurs or circumstance arises which,
          in the reasonable opinion of the Bank, is likely materially and
          adversely to affect either (a) the ability of any Security Party to
          perform all or any of their respective obligations under or otherwise
          to comply with the terms of any of the Security Documents or (b) the
          security created by any of the Security Documents.

10.2    Acceleration

        The Bank may, without prejudice to any other rights of the Bank, at any
        time after the happening of an Event of Default by notice to the
        Borrowers:

10.2.1    declare that the obligation of the Bank to make the Commitment
          available and to issue the Bank Guarantees shall be terminated,
          whereupon the Commitment and the Facility Commitment shall be reduced
          to zero and such obligations of the Bank shall be terminated
          forthwith; and/or

10.2.2    declare that the Loan and all interest, commitment commission and
          guarantee commission accrued and all other sums payable under the
          Security Documents have become due and payable, whereupon the same
          shall, immediately or in accordance with the terms of such notice,
          become due and payable; and/or

10.2.3    draw down any Advance or Advances and transfer the proceeds thereof
          immediately to the Cash Collateral Account (and the Borrowers hereby
          irrevocably and unconditionally authorise and direct the Bank to
          effect such transfer); and/or

10.2.4    require the Borrowers to pay to the Bank for credit to the Cash
          Collateral Account forthwith and/or at any other time specified by the
          Bank, such amount in Dollars which, as at the date of such notice by
          the Bank, is in the Bank's opinion (but in accordance with this
          Agreement and the other Security Documents) equal to (i) the
          Outstanding Amount of both the Bank Guarantees and (ii) the aggregate
          amount of any outstanding loans made by the Bank to the Borrowers
          pursuant to clause 2.5.1 in connection with both Bank Guarantees, less
          the amount standing to the credit of the Cash Collateral Account at
          such date, whereupon such amounts shall become due and payable
          immediately or in accordance with each such notice (it being
          understood that the Bank shall be entitled to give multiple such
          notices for further payment of moneys by the Borrowers to the Cash
          Collateral Account, at any time and from time to time following an
          Event of Default, notwithstanding that the Borrowers may have complied
          with one or more earlier notices).

10.3    Demand basis

        If, pursuant to clause 10.2.2, the Bank declares the Loan to be due and
        payable on demand, the Bank may by written notice to the Borrowers (a)
        call for repayment of the Loan on such date as may be specified
        whereupon the Loan shall become due and payable on the date so specified
        together with all interest, commitment commission and guarantee
        commission accrued and all other sums payable under this Agreement or
        (b) withdraw such declaration with effect from the date specified in
        such notice.

11      Indemnities

11.1    Miscellaneous indemnities

        The Borrowers shall on demand indemnify the Bank, without prejudice to
        any of the Bank's other rights under any of the Security Documents,
        against any loss (including loss of Margin) or expense which the Bank
        shall certify as sustained or incurred by it as a consequence of:

11.1.1    any default in payment by the Borrowers of any sum under any of the
          Security Documents when due;

11.1.2    the occurrence of any other Event of Default;

11.1.3    any prepayment of the Loan or part thereof being made under clauses
          4.2, 4.3 or 12.1 or any other repayment of the Loan or part thereof
          being made otherwise than on an Interest Payment Date relating to the
          part of the Loan prepaid or repaid;

11.1.4    any Advance not being made for any reason (excluding any default by
          the Bank) after the Drawdown Notice for that Advance has been given;
          or

11.1.5    the issuance of either Bank Guarantee and/or the performance of the
          Bank's obligations thereunder,

          including, in any such case, but not limited to, any loss or expense
          sustained or incurred in maintaining or funding the Loan or any part
          thereof or any loan outstanding under clause 2.5.1 or in liquidating
          or re-employing deposits from third parties acquired to effect or
          maintain the Loan or any part thereof or any loan outstanding under
          clause 2.5.1.

11.2    Currency indemnity

        If any sum due from the Borrowers or either of them under any of the
        Security Documents or any order or judgement given or made in relation
        thereto has to be converted from the currency (the "first currency") in
        which the same is payable under the relevant Security Document or under
        such order or judgement into another currency (the "second currency")
        for the purpose of (a) making or filing a claim or proof against the
        Borrowers or either of them, (b) obtaining an order or judgement in any
        court or other tribunal or (c) enforcing any order or judgement given or
        made in relation to any of the Security Documents, the Borrowers shall
        indemnify and hold harmless the Bank from and against any loss suffered
        as a result of any difference between (i) the rate of exchange used for
        such purpose to convert the sum in question from the first currency into
        the second currency and (ii) the rate or rates of exchange at which the
        Bank may in the ordinary course of business purchase the first currency
        with the second currency upon receipt of a sum paid to it in
        satisfaction, in whole or in part, of any such order, judgement, claim
        or proof. Any amount due from the Borrowers or either of them under this
        clause 11.2 shall be due as a separate debt and shall not be affected by
        judgement being obtained for any other sums due under or in respect of
        any of the Security Documents and the term "rate of exchange" includes
        any premium and costs of exchange payable in connection with the
        purchase of the first currency with the second currency.

11.3    Central Bank or European Central Bank reserve requirements indemnity

        The Borrowers shall on demand promptly indemnify the Bank against any
        cost incurred or loss suffered by the Bank as a result of its complying
        with the minimum reserve requirements of the European Central Bank
        and/or with respect to maintaining required reserves with the relevant
        national Central Bank to the extent that such compliance relates to the
        Bank's Commitment or the Facility Commitment, the Loan or any loans
        outstanding under clause 2.5.1 or the Bank Guarantees or deposits
        obtained by it to fund or maintain the whole or part of the Loan or any
        loans outstanding under clause 2.5.1 and such cost or loss is not
        recoverable by the Bank under clause 12.2.

11.4    Waiver

        In no event shall. the Bank or any of its Related Companies or any of
        their respective officers or directors be liable on any theory of
        liability for any special, indirect, consequential or punitive damages
        and each Borrower hereby waives, releases and agrees not to sue upon any
        such claim for any such damages, whether or not accrued and whether or
        not known or suspected to exist in its favour.

11.5    General indemnity

        The Borrowers jointly and severally hereby indemnify and agree to hold
        harmless the Bank and each of its respective Related Companies and each
        of their respective officers, directors, employees, agents, advisors and
        representatives (each, an "Indemnified Party") from and against any and
        all claims, damages, losses, liabilities, costs, legal and other
        expenses (altogether the "Losses"), joint or several, that may be
        incurred by or asserted or awarded against any Indemnified Party, in
        each case arising out of or in connection with or relating to any claim,
        investigation, litigation or proceeding (or the preparation of any
        defence with respect thereto) commenced or threatened in relation to the
        Security Documents or any of them (or the transactions contemplated
        hereby or thereby) or any use made or proposed to be made with the
        proceeds of the Loan. This indemnity shall apply whether or not such
        claims, investigation, litigation or proceeding is brought by the
        Borrowers or either of them, any other Security Party, any Relevant
        Party, any of their respective shareholders or creditors, an Indemnified
        Party or any other person, or an Indemnified Party is otherwise a party
        thereto, except to the extent that such Losses are found in a final,
        non-appealable judgment by a court of competent jurisdiction to have
        resulted from such Indemnified Party's gross negligence or wilful
        misconduct

12      Unlawfulness and increased costs

12.1    Unlawfulness

        If it is or becomes contrary to any law or regulation for the Bank to
        make any Advance or to maintain the Commitment or fund the Loan or any
        loan outstanding under clause 2.5.1 or any part thereof, or to issue
        either Bank Guarantee or maintain the Facility Commitment, the Bank
        shall promptly give notice to the Borrowers whereupon (a) each of the
        Commitment and the Facility Commitment shall be reduced to zero, (b) the
        obligation of the Bank to issue either Bank Guarantee and to make
        available any Advance shall be terminated and (c) the Borrowers shall be
        obliged to prepay the Loan either (i) forthwith or (ii) on a future
        specified date not being earlier than the latest date permitted by the
        relevant law or regulation together with interest accrued to the date of
        prepayment and all other sums payable by the Borrowers under this
        Agreement.

12.2    Increased costs

        If the result of any change in, or in the interpretation or application
        of, or the introduction of, any law or any regulation. request or
        requirement, (whether or not having the force of law, but, if not having
        the force of law, with which the Bank or, as the case may be, its
        holding company habitually complies), including (without limitation)
        those relating to Taxation, capital adequacy, liquidity, reserve assets,
        cash ratio deposits and special deposits, is to:

12.2.1    subject the Bank to Taxes or change the basis of Taxation of the Bank
          with respect to any payment under any of the Security Documents (other
          than Taxes or Taxation on the overall net income, profits or gains of
          the Bank imposed in the jurisdiction in which its principal or fending
          office under this Agreement is located); and/or

12.2.2    increase the cost to, or impose an additional cost on, the Bank or its
          holding company in making or keeping the Commitment or the Facility
          Commitment available or maintaining or funding all or part of the Loan
          or any loan outstanding under clause 2.5.1 or maintaining the Bank
          Guarantees; and/or

12.2.3    reduce the amount payable or the effective return to the Bank under
          any of the Security Documents; and/or

12.2.4    reduce the Bank's or its holding company's rate of return on its
          overall capital by reason of a change in the manner in which it is
          required to allocate capital resources to the Bank's obligations under
          any of the Security Documents; and/or

12.2.5    require the Bank or its holding company to make a payment or forego a
          return on or calculated by reference to any amount received or
          receivable by the Bank under any of the Security Documents; and/or

12.2.6    require the Bank to incur or sustain a loss (including a loss of
          future potential profits) by reason of being obliged to deduct all or
          part of the Commitment or the Facility Commitment or the Loan or any
          loan outstanding under clause 2.5.1 or the Outstandings from its
          capital for regulatory purposes,

          then and in each such case:

          (a)  the Bank shall notify the Borrowers in writing of such event
               promptly upon its becoming aware of the same; and

          (b)  the Borrowers shall on demand pay to the Bank the amount which
               the Bank specifies (in a certificate setting forth the basis of
               the computation of such amount but not including any matters
               which the Bank regards as confidential) is required to compensate
               the Bank and/or (as the case may be) its holding company for such
               liability to Taxes, cost, reduction, payment, foregone return or
               loss.

          For the purposes of this clause 12.2, "holding company" means the
          company or entity (if any) within the consolidated supervision of
          which the Bank is included.

12.3    Exception

        Nothing in clause 12.2 shall entitle the Bank to receive any amount in
        respect of compensation for any such liability to Taxes, increased or
        additional cost, reduction, payment, foregone return or loss to the
        extent that the same is the subject of an additional payment under
        clause 6.6.

13      Security and set-off

13.1    Application of moneys

        All moneys received by the Bank under or pursuant to any of the Security
        Documents and expressed to be applicable in accordance with the
        provisions of this clause 13.1 shall be applied by the Bank in the
        following manner:

13.1.1    first in or toward payment of all unpaid fees, expenses, commitment
          commission and guarantee commission which may be owing to the Bank
          under any of the Security Documents;

13.1.2    secondly in or towards payment of any arrears of interest owing in
          respect of the Loan or any part thereof or any loan outstanding under
          clause 2.5.1;

13.1.3    thirdly in or towards repayment of the Loan and any loan outstanding
          under clause 2.5.1 (whether the same is due and payable or not);

13.1.4    fourthly in or towards payment to the Bank for any loss suffered by
          reason of any such payment in respect of principal not being effected
          on an interest Payment |_|ate relating to the part of the Loan repaid;

13.1.5    fifthly in or towards payment to the Cash Collateral Account of any
          moneys payable thereto in accordance with clause 10.2.4;

13.1.6    sixthly in or towards payment to the Bank of any other sums owing to
          it under any of the Security Documents; and

13.1.7    seventhly the surplus (if any) shall be paid to the Borrowers or to
          whomsoever else may be entitled to receive such surplus.

13.2    Set-off

13.2.1    The Borrowers authorise the Bank (without prejudice to any of the
          Bank's rights at law, in equity or otherwise), at any time and without
          prior notice to the Borrowers, to apply any credit balance to which
          the Borrowers or either of them are then entitled standing upon any
          account of the Borrowers or either of them with any branch of the Bank
          in or towards satisfaction of any sum due and payable from the
          Borrowers to the Bank under any of the Security Documents. For this
          purpose, the Bank is authorised to purchase with the moneys standing
          to the credit of such account such other currencies as may be
          necessary to effect such application.

13.2.2    The Bank shall not be obliged to exercise any right given to it by
          this clause 13.2. The Bank shall notify the Borrowers forthwith upon
          the exercise or purported exercise of any right of set-off giving full
          details in relation thereto.

13.3    Further assurance

        The Borrowers jointly and severally undertake with the Bank that the
        Security Documents shall both at the date of execution and delivery
        thereof and so long as any moneys are owing under any of the Security
        Documents be valid and binding obligations of the respective parties
        thereto and rights of the Bank enforceable in accordance with their
        respective terms and that they will, at their expense, execute, sign,
        perfect and do, and will procure the execution, signing, perfecting and
        doing by each of the other Security Parties of, any and every such
        further assurance, document, act or thing as in the reasonable opinion
        of the Bank may be necessary or desirable for perfecting the security
        contemplated or constituted by the Security Documents.

13.4    Conflicts

        In the event of any conflict between this Agreement and any of the other
        Borrowers' Security Documents, the provisions of this Agreement shall
        prevail.

14      Cash Collateral Account

14.1    General

        The Borrowers jointly and severally undertake with the Bank that they
        will, on or before the first Bank Guarantee Issue Date, open the Cash
        Collateral Account.

14.2    Withdrawals

14.2.1    Unless the Bank otherwise agrees in writing, the Borrowers shall not
          be entitled to withdraw any moneys from the Cash Collateral Account at
          any time from the date of this Agreement and so long as any moneys are
          owing under the Security Documents whether actually or contingently,
          save that the Borrowers may withdraw moneys from the Cash Collateral
          Account for the purposes of transferring to the Bank (and each
          Borrower hereby irrevocably and unconditionally authorises the Bank to
          effect each such transfer) forthwith following a demand made under
          either Bank Guarantee, such amounts as the Borrowers are liable to pay
          to the Bank under clause 2.5.1 in respect of such demand. The Bank
          shall apply such moneys forthwith on receipt thereof in or towards
          discharge (in whole or, as the case may be, part) of such liability of
          the Borrowers or, in the Bank's absolute discretion, in direct payment
          to the Builders of any amount which the Builders have demanded under
          that Bank Guarantee.

14.2.2    Each Borrower hereby irrevocably and unconditionally authorises and
          directs the Bank to apply such funds in the manner and at the time
          referred to in clause 14.2.1.

14.3    Interest

        Amounts standing to the credit of the Cash Collateral Account shall bear
        interest at the rate (unless otherwise agreed between the Bank and the
        Borrowers) which is certified by the Bank to the Borrowers to be the
        rate quoted by the Bank to its customers for deposits in Dollars for
        such period as the Bank may determine and in an amount comparable with
        the amount for the time being standing to the credit of the Cash
        Collateral Account (such interest to be credited to the Cash Collateral
        Account and to accrue and be calculated in such manner as agreed from
        time to time between the relevant Borrower and the Bank).

14.4    Set-off

        Without in any way affecting the rights of the Bank under clause 13.2,
        upon the occurrence of a Default which is continuing or at any time
        thereafter the Bank shall be entitled to set-off and apply all sums
        standing to the credit of the Cash Collateral Account and accrued
        interest (if any) thereon without prior notice to the Borrowers in the
        manner specified in clause 13.1.

14.5    Deductions

        The Bank shall be entitled (but not obliged), at any time, to deduct
        from the balance for the time being standing to the credit of the Cash
        Collateral Account all other moneys which may fall due to be paid to the
        Bank under the terms of this Agreement and the other Security Documents
        or otherwise howsoever in connection with the Loan.

14.6    Continuing security

        The Bank shall not be obliged to exercise its rights under clauses 14.4
        or 14.5 (but shall be entitled to do so as and when specified therein).
        Any moneys standing to the credit of the Cash Collateral Account from
        time to time shall constitute continuing security for the payment of all
        moneys and obligations, actual or contingent, of the Borrowers under
        this Agreement.

14.7    Pledging of Cash Collateral Account

        The Cash Collateral Account and all amounts from time to time standing
        to the credit thereof shall be subject to the security constituted and
        the rights conferred by the Account Pledge.

15      Assignment, transfer and lending office

15.1    Benefit and burden

        This Agreement shall be binding upon, and enure for the benefit of, the
        Bank and the Borrowers and their respective successors.

15.2    No assignment by Borrowers

        The Borrowers may not assign or transfer any of their respective rights
        or obligations under this Agreement.

15.3    Assignment by Bank

        The Bank may assign all or any part of its rights under this Agreement
        or under any of the other Security Documents to any other bank or
        financial institution (an "Assignee") following prior consultation with
        the Borrowers, unless the Assignee shall be a Related Company of the
        Bank (in which case no such consultation shall be required)

15.4    Transfer

        The Bank may transfer all or any part of its rights, benefits and/or
        obligations under this Agreement and/or any of the other Security
        Documents to any one or more banks or other financial institutions (a
        "Transferee'):

        (a)     following prior consultation with the Borrowers, unless the
                Transferee shall be a Related Company of the Bank (in which case
                no such consultation shall be required); and

        (b)     if the Transferee, by delivery of such undertaking or other
                document as the Bank may approve, becomes bound by the terms of
                this Agreement and agrees to perform all or, as the case may be,
                part of the Bank's obligations under this Agreement.

15.5    Documenting assignments and transfers

        If the Bank assigns all or any part of its rights or transfers all or
        any part of its rights, benefits and/or obligations as provided in
        clauses 15.3 or 15.4, respectively, the Borrowers jointly and severally
        undertake, immediately on being requested to do so by the Bank and at
        the cost of the Bank, to enter into, and procure that the other Security
        Parties shall enter into, such documents as may be necessary or
        desirable to transfer to the Assignee or Transferee all or the relevant
        part of the Bank's interest in the Security Documents and all relevant
        references in this Agreement to the Bank shall thereafter be construed
        as a reference to the Bank and/or its Assignee or Transferee (as the
        case may be) to the extent of their respective interests.

15.6    Lending office

        The Bank shall lend through its office at the address specified in the
        definition of "Bank" in clause 1.2 or through any other office of the
        Bank selected from time to time by it through which the Bank wishes to
        lend for the purposes of this Agreement. If the office through which the
        Bank is fending is changed pursuant to this clause 15.6, the Bank shall
        notify the Borrowers promptly of such change.

15.7    Disclosure of information

        The Bank may, following prior consultation with the Borrowers, disclose
        to a prospective assignee, transferee or to any other person who may
        propose entering into contractual relations with the Bank in relation to
        this Agreement such information about the Borrowers as the Bank shall
        consider appropriate.

16      Notices and other matters

16.1    Notices

        Every notice, request, demand or other communication under this
        Agreement or (unless otherwise provided therein) under any of the other
        Security Documents shall:

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

16.1.2    be deemed to have been received, subject as otherwise provided in the
          relevant Security Document, in the case of a letter, when delivered
          personally or five (5) days after it has been put in to the post and,
          in the case of a facsimile transmission or other means of
          telecommunication in permanent written form, at the time of despatch
          (provided that if the date of despatch is not a business day in the
          country of the addressee or if the time of despatch is after the close
          of business in the country of the addressee it shall be deemed to have
          been received at the opening of business on the next such business
          day); and

16.1.3    be sent:

          (a)  if to the Borrowers or either of them at:

               c/o Diana Shipping Services S.A. Pendelis 16
               175 64 Palaio Faliro
               Athens
               Greece

               Fax no:  +30 210 947 0101
               Attention: Mr Andreas Michalopoulos

          (b)  if to the Bank at:

               Fortis Bank
               166 Syngrou Ave. Athens 176 71
               Greece

               Fax No: + 30 210 954 4368
               Attention: Mr George Arcadis

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

16.2    No implied waivers, remedies cumulative

        No failure or delay on the part of the Bank to exercise any power, right
        or remedy under any of the Security Documents shall operate as a waiver
        thereof, nor shall any single or partial exercise by the Bank of any
        power, right or remedy preclude any other or further exercise thereof or
        the exercise of any other power, right or remedy. The remedies provided
        in the Security Documents are cumulative and are not exclusive of any
        remedies provided by law.

16.3    English language

        All certificates, instruments and other documents to be delivered under
        or supplied in connection with any of the Security Documents shall be in
        the English language or shall be accompanied by a certified English
        translation upon which the Bank shall be entitled to rely.

16.4    Borrowers' obligations

16.4.1    Joint and several

          Notwithstanding anything to the contrary contained in any of the
          Security Documents, the agreements, obligations and liabilities of the
          Borrowers herein contained are joint and several and shall be
          construed accordingly. Each Borrower agrees and consents to be bound
          by the Security Documents to which it is, or is to be, a party
          notwithstanding that the other Borrower which is intended to sign or
          to be bound may not do so or be effectually bound and notwithstanding
          that any of the Security Documents may be invalid or unenforceable
          against the other Borrower, whether or not the deficiency is known to
          the Bank.

16.4.2    Borrowers as principal debtors

          Each Borrower acknowledges and confirms that it is a principal and
          original debtor in respect of all amounts which may become payable by
          the Borrowers in accordance with the terms of this Agreement or any of
          the other Security Documents and agrees that the Bank may also
          continue to treat it as such, whether or not the Bank is or becomes
          aware that such Borrower is or has become a surety for the other
          Borrower.

16.4.3    indemnity

          The Borrowers hereby agree jointly and severally to keep the Bank
          fully indemnified on demand against all damages, losses, costs and
          expenses arising from any failure of either Borrower to perform or
          discharge any purported obligation or liability of such Borrower which
          would have been the subject of this Agreement or any other Security
          Document had it been valid and enforceable and which is not or ceases
          to be valid and enforceable against a Borrower on any ground
          whatsoever, whether or not known to the Bank (including, without
          limitation, any irregular exercise or absence of any corporate power
          or lack of authority of, or breach of duty by, any person purporting
          to act on behalf of a Borrower (or any legal or other [imitation,
          whether under the Limitation Acts or otherwise or any disability or
          death, bankruptcy, unsoundness of mind, insolvency, liquidation,
          dissolution, winding up, administration, receivership, amalgamation,
          reconstruction or any other incapacity of any person whatsoever
          (including, in the case of a partnership, a termination or change in
          the composition of the partnership) or any change of name or style or
          constitution of any Security Party)).

16.4.4    Liability unconditional

          None of the obligations or liabilities of the Borrowers under this
          Agreement or any other Security Document shall be discharged or
          reduced by reason of:

          (a)  the death, bankruptcy, unsoundness of mind, insolvency,
               liquidation, dissolution, winding-up, administration,
               receivership, amalgamation, reconstruction or other incapacity of
               any person whatsoever (including, in the case of a partnership, a
               termination or change in the composition of the partnership) or
               any change of name or style or constitution of either Borrower or
               any other person liable;

          (b)  the Bank granting any time, indulgence or concession to, or
               compounding with, discharging, releasing or varying the liability
               of, either Borrower or any other person liable or renewing,
               determining, varying or increasing any accommodation, facility or
               transaction or otherwise dealing with the same in any manner
               whatsoever or concurring in, accepting, varying any compromise,
               arrangement or settlement or omitting to claim or enforce payment
               from either Borrower or any other person liable; or

          (c)  anything done or omitted which but for this provision might
               operate to exonerate the Borrowers or either of them.

16.4.5    Recourse to other security

          The Bank shall not be obliged to make any claim or demand or to resort
          to any Security Document or other means of payment now or hereafter
          held by or available to it for enforcing this Agreement or any of the
          Security Documents against a Borrower or any other person liable and
          no action taken or omitted by the Bank in connection with any such
          Security Document or other means of payment will discharge, reduce,
          prejudice or affect the liability of the Borrowers under this
          Agreement and the Security Documents to which any of them is, or is to
          be, a party.

16.4.6    Waiver of Borrowers' rights

          Each Borrower agrees with the Bank that, from the date of this
          Agreement and so long as any moneys are owing under the any of the
          Security Documents and while all or any part of the Commitment remains
          outstanding, it will not, without the prior written consent of the
          Bank:

          (a)  exercise any right of subrogation, reimbursement and indemnity
               against the other Borrower or any other person liable under the
               Security Documents;

          (b)  demand or accept repayment in whole or in part of any
               Indebtedness now or hereafter due to such Borrower from the other
               Borrower or from any other person liable or demand or accept any
               guarantee, indemnity or other assurance against financial loss or
               any document or instrument created or evidencing an Encumbrance
               in respect of the same or dispose of the same;

          (c)  take any steps to enforce any right against the other Borrower or
               any other person liable in respect of any such moneys; or

          (d)  claim any set-off or counterclaim against the other Borrower or
               any other person liable or claiming or proving in competition
               with the Bank in the liquidation of the other Borrower or any
               other person liable or have the benefit of, or share in, any
               payment from or composition with, the other Borrower or any other
               person liable or any other Security Document now or hereafter
               held by the Bank for any monies owing under this Agreement or for
               the obligations or liabilities of any other person liable but so
               that, if so directed by the Bank, it will prove for the whole or
               any part of its claim in the liquidation of the other Borrower or
               other person liable on terms that the benefit of such proof and
               all money received by it in respect thereof shall be held en
               trust for the Bank and applied in or towards discharge of any
               moneys owing under this Agreement in such manner as the Bank
               shall deem appropriate.

17      Governing law and jurisdiction

17.1    Law

        This Agreement is governed by, and shall be construed in accordance
        with, English law.

17.2    Submission to jurisdiction

        Each Borrower agrees, for the benefit of the Bank, that any legal action
        or proceedings arising out of or in connection with this Agreement
        against the Borrowers or either of them or any of their assets may be
        brought in the English courts. Each Borrower irrevocably and
        unconditionally submits to the jurisdiction of such courts and
        irrevocably designates, appoints and empowers Nicolaou & Co. Chartered
        Accountants (attention Mr Antonis Nicolaou) at present of 25 Heath
        Drive, Potters Bar, Hefts, EN6 1EN, England to receive for it and on its
        behalf, service of process issued out of the English courts in any such
        legal action or proceedings. The submission to such jurisdiction shall
        not (and shall not be construed so as to) limit the right of the Bank to
        take proceedings against the Borrowers or either of them in the courts
        of any other competent jurisdiction nor shall the taking of proceedings
        in any one or more jurisdictions preclude the taking of proceedings in
        any other jurisdiction, whether concurrently or not. The parties further
        agree that only the Courts of England and not those of any other State
        shall have jurisdiction to determine any claim which the Borrowers or
        either of them may have against the Bank arising out of or in connection
        with this Agreement

17.3    Contracts (Rights of Third Parties) Act 1999

        No term of this Agreement is enforceable under the Contracts (Rights of
        Third Parties) Act 1999 by a person who is not a party to this Agreement

IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.


                                   Schedule I

            Form of Drawdown Notice and Bank Guarantee Issue Request

                                     Part A

                             Form of Drawdown Notice

                           (referred to in clause 2.2)

To:  Fortis Bank
     166 Syngrou Ave.
     Athens 176 71
     Greece

                                                                      [o] 200[o]

US$60,200,000 Loan Facility and US$36,451,100 Guarantee Facility
Facility Agreement dated [|X|] 2006 (the "Facility Agreement")

We refer to the Facility Agreement and hereby give you notice that we wish to
draw down the [Bikini] [Eniwetok] [First] [Second] [Third] [Fourth] Advance,
namely [|X|] Dollars ($[o]) on [o] 200[|X|] and select a first Interest Period
in respect thereof [of [o] months] [ending on [|X|]]. The funds should be
credited to [|X|]

We confirm that

(a)  no event or circumstance has occurred and is continuing which constitutes a
     Default;

(b)  the representations and warranties contained in (i) clauses 7.1, 7.2 and
     7.3(b) of the Facility Agreement and (ii) clause 4 of the Corporate
     Guarantee, are true and correct at the date hereof as if made with respect
     to the facts and circumstances existing at such date;

(c)  the borrowing to be effected by the drawdown of the said Advance[s] will be
     within our corporate powers, has been validly authorised by appropriate
     corporate action and will not cause any limit on our borrowings (whether
     imposed by statute, regulation, agreement or otherwise) to be exceeded; and

(d)  there has been no material adverse change.

     (i)  in the business, assets, operations, prospects or the financial
          position of the Corporate Guarantor, the Borrowers or the Group as a
          whole, from that described by the Borrowers or any other Security
          Party to the Bank in the negotiation of this Agreement; or

     (ii) in the business, assets, operations, prospects or the financial
          position of the Corporate Guarantor or the Group as a whole from that
          set forth in the semi-annual consolidated financial statements of the
          Corporate Guarantor and its Subsidiaries for the financial half-year
          ended 30 June 2006; or

    (iii) in the ability of either of the Borrowers, the Corporate Guarantor or
          any other Security Party to comply with any of their respective
          obligations under the Security Documents or any of them; or

     (iv) in the legality, validity or enforceability of any of the Security
          Documents or any of the rights or remedies of the Bank thereunder.

Words and expressions defined in the Facility Agreement shall have the same
meanings where used herein.



----------------------------------
For and on behalf of
BIKINI SHIPPING COMPANY INC.



----------------------------------
For and on behalf of
ENIWETOK SHIPPING COMPANY INC.


                                     Part B

                      Form of Bank Guarantee Issue Request

                           [referred to in clause 2.2)

To:  Fortis Bank
     166 Syngrou Ave.
     Athens 176 71
     Greece

                                                                      [|X|] 2006

US$60,200,000 Loan Facility and US$36,451,000 Guarantee Facility
Facility Agreement dated [+] 2006 (the "Facility Agreement")

We refer to the Facility Agreement and hereby request that the Bank issues the
[Bikini] [Eniwetok] Bank Guarantee in favour of the Builders on [o] 2006 to the
following bank (being the Builders' bank):

[provide Builders' bank details and SWIFT address]

We confirm that:

(a)  no event or circumstance has occurred and is continuing which constitutes a
     Default;

(b)  the representations and warranties contained in (i) clauses 7.1, 7.2 and
     7.3(b) of the Facility Agreement and (ii) clause 4 of the Corporate
     Guarantee, are true and correct at the date hereof as if made with respect
     to the facts and circumstances existing at such date; and

(c)  there has been no material adverse change:

     (i)  in the business, assets, operations, prospects or the financial
          position of the Corporate Guarantor, the Borrowers or the Group as a
          whole, from that described by the Borrowers or any other Security
          Party to the Bank in the negotiation of this Agreement; or

     (ii) in the business, assets, operations, prospects or the financial
          position of the Corporate Guarantor or the Group as a whole from that
          set forth in the semi-annual consolidated financial statements of the
          Corporate Guarantor and its Subsidiaries for the financial half-year
          ended 30 June 2006; or

    (iii) in the ability of any of the Borrowers, the Corporate Guarantor or
          any other Security Party to comply with any of their respective
          obligations under the Security Documents or any of them; or

     (iv) in the legality, validity or enforceability of any of the Security
          Documents or any of the rights or remedies of the Bank thereunder.

Words and expressions defined in the Facility Agreement shall have the same
meanings where used herein.



----------------------------------
For and on behalf of
BIKINI SHIPPING COMPANY INC.



----------------------------------
For and on behalf of
ENIWETOK SHIPPING COMPANY INC.


                                   Schedule 2

             Documents and evidence required as conditions precedent

                           (referred to in clause 9.1)

                                     Part 1

                       Commitment and Facility Commitment

1    Constitutional documents

     Copies, certified by an officer of each Security Party (other than the
     Builders and the Refund Guarantor) as true, complete and up to date copies
     of all documents which contain or establish or relate to the constitution
     of that Security Party;

2    Corporate authorisations

     copies of resolutions of the directors and stockholders of each Security
     Party approving such of the Underlying Documents and the Security Documents
     to which such Security Party is, or is to be, a party and authorising the
     signature, delivery and performance of such Security Party's obligations
     thereunder, certified by an officer of such Security Party as:

2.1  being true and correct;

2.2  being duly passed at meetings of the directors of such Security Party and
     of the stockholders of such Security Party each duly convened and held;

2.3  not having been amended, modified or revoked; and

2.4  being in full force and effect,

     together with originals or certified copies of any powers of attorney
     issued by any Security Party pursuant to such resolutions;

3    Specimen signatures

     copies of the signatures of the persons who have been authorised on behalf
     of each Security Party (other than the Builders and the Refund Guarantor)
     to sign such of the Underlying Documents and the Security Documents to
     which such Security Party is, or is to be, party and to give notices and
     communications, including notices of drawing, under or in connection with
     the Security Documents, certified by an officer of such Security Party as
     being the true signatures of such persons;

4    Certificate of incumbency

     a list of directors and officers of each Security Party (other than the
     Builders and the Refund Guarantor) specifying the names and positions of
     such persons, certified by an officer of such Security Party to be true,
     complete and up to date;

5    Borrowers' consents and approvals

     a certificate from an officer of each of the Borrowers that no consents,
     authorisations, licences or approvals are necessary for that Borrower to
     authorise or are required by that Borrower in connection with the
     transactions contemplated by this Agreement or the execution, delivery and
     performance of the Borrowers' Security Documents;

6    Other consents and approvals

     a certificate from an officer of each Security Party (other than the
     Borrowers, the Builders and the Refund Guarantor) that no consents,
     authorisations, licences or approvals are necessary for such Security Party
     to guarantee and/or grant security for the obligations of the Borrowers
     pursuant to this Agreement and execute, deliver and perform the Security
     Documents insofar as such Security Party is a party thereto;

7    Chinese opinion

     an opinion of Zhong Lun Law Firm, special legal advisers on matters of
     Chinese law to the Bank;

9    Marshall Islands opinion

     an opinion of Cozen O'Connor, special legal advisers on matters of Marshall
     Islands law to the Bank;

9    Cash Collateral Account

     evidence that the Cash Collateral Account has been opened together with
     duly completed mandate forms in respect thereof;

10   Security Documents

10.1 the Corporate Guarantee, the Pre-delivery Security Assignments and the
     Account Pledge, each duly executed (together with all other documents to be
     executed and/or delivered to the Bank pursuant thereto); and

10.2 the Contract Assignment Consent and Acknowledgements and the Refund
     Guarantee Assignment Consent and Acknowledgments, each duly executed by the
     Borrowers;

11   Borrowers' process agent

     a letter from each Borrower's agent for receipt of service of proceedings
     referred to in clause 171 accepting its appointment under the said clause
     and under each of the other Security Documents in which it is or is to be
     appointed as such Borrower's agent;

12   Security Parties' process agent

     a letter from each Security Party's agent (other than the Borrowers, the
     Builders and the Refund Guarantor) for receipt of service of proceedings
     accepting its appointment under each of the Security Documents in which it
     is to be appointed as such Security Party's agent;

13   Underlying Documents

     a copy, certified as a true and complete copy by an officer of the relevant
     Borrowers of each of the Contracts and the original of each of the Refund
     Guarantees; and

14   Fees and commissions

     evidence that any fees and any commissions due under clause 5.1 have been
     paid in full


                                     Part 2

                                 First Advances

1    Past conditions precedent

     Evidence that the conditions precedent referred to in Part 1 of this
     schedule remain satisfied and that the Borrowers are in compliance with
     clause 8.11.11;

2    No claim

     if required by the Bank, evidence satisfactory to the Bank that the
     Builders (and any other party who may have a claim pursuant to either
     Contract) have no claims against the relevant Borrower and that there have
     been no breaches of the terms of either Contract or any Refund Guarantee or
     any default thereunder:

3    No variations to Contracts or Refund Guarantees

     if required by the Bank, evidence that there have been no amendments or
     variations agreed to either Contract or any Refund Guarantee and that no
     action has been taken by the Builders or the Refund Guarantor which might
     in any way render either Contract or any Refund Guarantee inoperative or
     unenforceable, in whole or in part;

4    No Encumbrance

     if required by the Bank, evidence that there is no Encumbrance of any kind
     created or permitted by any person on or relating to either Contract or any
     Refund Guarantee (other than Permitted Encumbrances);

5    Invoice and receipt

     an invoice from the Builders demanding the payment of the "1st Instalment"
     of the Contract Price payable under the Contract relevant to the First
     Advance to be drawn down (payable under Article II 3(a) thereof) and a
     receipt from the Builders evidencing payment of such instalment in full;

6    Fees and commissions

     evidence that any fees and commissions payable from the Borrowers to the
     Bank under clause 5.1 or any other provision of the Security Documents have
     been paid in full; and

7    Further conditions

     Any such other opinion or further condition as may be required by the Bank.


                                     Part 3

                                 Second Advances

1    Previous conditions precedent

     Evidence that the conditions precedent referred to in Part 1 and Part 2 of
     this schedule remain satisfied and that the Borrowers are in compliance
     with clause 8.1.11;

2    No claim

     if required by the Bank, evidence satisfactory to the Bank that the
     Builders (and any other party who may have a claim pursuant to either
     Contract) have no claims against the relevant Borrower and that there have
     been no breaches of the terms of either Contract or any Refund Guarantee or
     any default thereunder;

3    No variations to Contracts or Refund Guarantees

     if required by the Bank, evidence that there have been no amendments or
     variations agreed to either Contract or any Refund Guarantee and that no
     action has been taken by the Builders or the Refund Guarantor which might
     in any way render either Contract or any Refund Guarantee inoperative or
     unenforceable, in whole or in part;

4    No Encumbrance

     if required by the Bank, evidence that there is no Encumbrance of any kind
     created or permitted by any person on or relating to either Contract or any
     Refund Guarantee (other than Permitted Encumbrances);

5    Invoice and receipt

     an invoice from the Builders demanding the payment of the "2nd Instalment"
     of the Contract Price payable under the Contract relevant to the Second
     Advance to be drawn down (payable under Article II 3(b) thereof) and a
     receipt from the Builders evidencing payment of such instalment in full;

6    Fees and commissions

     evidence that any fees and commissions payable from the Borrowers to the
     Bank under clause 5.1 or any other provision of the Security Documents have
     been paid in full.

7    Confirmation of completion of stage of construction

     evidence from the Classification Society that the steel plate of the Ship
     relevant to the Second Advance to be drawn down has been cut in the
     Builders' workshop to its satisfaction; and

8    Further conditions

     any such other opinion or further condition as may be required by the Bank.


                                     Part 4

                                 Third Advances

1    Previous conditions precedent

     Evidence that the conditions precedent referred to in Part 1, Part 2 and
     Part 3 of this schedule remain satisfied and that the Borrowers are in
     compliance with clause 8.1.11;

2    No claim

     if required by the Bank, evidence satisfactory to the Bank that the
     Builders (and any other party who may have a claim pursuant to either
     Contract) have no claims against the relevant Borrower and that there have
     been no breaches of the terms of either Contract or any Refund Guarantee or
     any default thereunder;

3    No variations to Contracts or Refund Guarantees

     if required by the Bank, evidence that there have been no amendments or
     variations agreed to either Contract or any Refund Guarantee and that no
     action has been taken by the Builders or the Refund Guarantor which might
     in any way render either Contract or any Refund Guarantee inoperative or
     unenforceable, in whole or in part;

4    No Encumbrance

     if required by the Bank, evidence that there is no Encumbrance of any kind
     created or permitted by any person on or relating to either Contract or any
     Refund Guarantee (other than Permitted Encumbrances);

5    Invoice and receipt

     an invoice from the Builders demanding the payment of the "3rd instalment"
     of the Contract Price payable under the Contract relevant to the Third
     Advance to be drawn down (payable under Article II 3(c) thereof} and a
     receipt from the Builders evidencing payment of such instalment in full;

6    Fees and commissions

     evidence that any fees and commissions payable from the Borrowers to the
     Bank under clause 5.1 or any other provision of the Security Documents have
     been paid in full;

7    Confirmation of completion of stage of construction

     evidence from the Classification Society that the keel-laying of the Ship
     relevant to the Third Advance to be drawn down has been completed to its
     satisfaction; and

8    Further conditions

     any such other opinion or further condition as may be required by the Bank.


                                     Part 5

                                 Fourth Advances

1    Previous conditions precedent

     Evidence that the conditions precedent referred to in Part 1, Part 2, Part
     3 and Part 4 of this schedule remain satisfied and that the Borrowers are
     in compliance with clause 8.1.11;

2    No claim

     if required by the Bank, evidence satisfactory to the Bank that the
     Builders (and any other party who may have a claim pursuant to either
     Contract) have no claims against the relevant Borrower and that there have
     been no breaches of the terms of either Contract or any Refund Guarantee or
     any default thereunder;

3    No variations to Contracts or Refund Guarantees

     if required by the Bank, evidence that there have been no amendments or
     variations agreed to either Contract or any Refund Guarantee and that no
     action has been taken by the Builders or the Refund Guarantor which might
     in any way render either Contract or any Refund Guarantee inoperative or
     unenforceable, in whole or in part;

4    No Encumbrance

     if required by the Bank, evidence that there is no Encumbrance of any kind
     created or permitted by any person on or relating to either Contract or any
     Refund Guarantee (other than Permitted Encumbrances);

5    Invoice and receipt

     an invoice from the Builders demanding the payment of the "4th Instalment"
     of the Contract Price payable under the Contract relevant to the Fourth
     Advance to be drawn down (payable under Article II 3(d) thereof) and a
     receipt from the Builders evidencing payment of such instalment in full;

6    Fees and commissions

     evidence that any fees and commissions payable from the Borrowers to the
     Bank under clause 5.1 or any other provision of the Security Documents have
     been paid in full;

7    Confirmation of completion of stage of construction

     evidence from the Classification Society that the launching of the Ship
     relevant to the Fourth Advance to be drawn down has been completed to its
     satisfaction; and

8    Further conditions

     any such other opinion or further condition as may be required by the Bank.


                                   Schedule 3

                             Form of Bank Guarantee


                   Exhibit "B" IRREVOCABLE LETTER OF GUARANTEE

                     FOR THE 2ND, 3RD, AND 4TH INSTALLMENTS

________________________________________________________________

_______________________________________ Bank

To: China Shipbuilding Trading Co_, Ltd. Date: ________
56(Yi) Zhongguancun Nan Da Jie, Beijing
100044, the People's Republic of China

Dear Sirs,

(1)  In consideration of your entering into a Slip Sale Contract dated March 30,
     2006 ("the Shipbuilding Contract") with __________________ as the buyer
     ("the BUYER") for the construction of one (1) 177000 Metric Tons Deadweight
     Bulk Carrier known as Shanghai Waigaoqiao Shipbuilding Co., Ltd.'s Hull No.
     ____ ("the VESSEL"), we, _______________, hereby IRREVOCABLY, ABSOLUTELY
     and UNCONDITIONALLY guarantee, as the primary obligor and not merely as the
     surety, the due and punctual payment by the BUYER of each and all of the
     2nd, 3rd, and 4th installments of the Contract Price amounting to a total
     sum of United States Dollars Eighteen Million Sixty Thousand (US$
     18,060,000.00) as specified in (2) below.

(2)  The Instalments guaranteed hereunder, pursuant to the terms of the
     Shipbuilding Contract, comprise the 2nd installment in the amount of U.S.
     Dollars Six Million Twenty Thousand (US$ 6,020,000.00) payable by the BUYER
     within three (3) New York banking days after cutting of the first steel
     plate in your BUILDER's workshop, the third installment in the amount of
     U.S. Dollars Six Million Twenty Thousand (US$ 6,020,000.00) payable by the
     BUYER within three (3) New York banking days after keel-laying of the first
     section of the VESSEL, and the 4th installment in the amount U.S. Dollars
     Six Million Twenty Thousand (US$ 6,020,000.00) payable by the BUYER within
     three (3) New York banking days after launching of the VESSEL.

(3)  We also IRREVOCABLY, ABSOLUTELY and UNCONDITIONALLY guarantee, as primary
     obligor and not merely as surety, the due and punctual payment by the BUYER
     of interest on each Instalment guaranteed hereunder at the rate of Five
     paint Five percent (5.5%) per annum from and including the first day after
     the date of instalment in default until the date of full payment by us of
     such amount guaranteed hereunder.

(4)  In the event that the BUYER fails to punctually pay any Instalment
     guaranteed hereunder or the BUYER fails to pay any interest thereon, and
     any such default continues for a period of fifteen (15) days, then, upon
     receipt by us of your first written demand, we shall immediately pay to you
     or your assignee all unpaid 2nd, 3rd and 4th Instalments, together with the
     interest as specified in paragraph. (3) hereof, without requesting you to
     take any or further action, procedure or step against the BUYER or with
     respect to any other security which you may hold.

(5)  We hereby agree that at your option this Guarantee and the undertaking
     hereunder shall be assignable to and if so assigned shall inure to the
     benefit of any 3rd party designated by you or The Export-Import Bank of
     China, Head Office, Banking Department, Beijing, the People's Republic of
     China as your assignee as if any such third party or The Export-Import Bank
     of China, Head Office, Banking Department, Beijing, the People's Republic
     of China were originally named herein.

(6)  Any payment by us under this Guarantee shall be made in the Unites States
     Dollars by telegraphic transfer to Bank of China, New York Branch, 410
     Madison Avenue, New York, N.Y. 10017, U. S .A for credit to Account
     No.5003-6008046-000-001 of The Export-Import Bank of China, Beijing, the
     P.R. China, and further to CSTC Account No. 10-14-22100-0023-1 maintained
     with The Export-Import Bank of China, Banking Department (Swift Code:
     EIBCCNBJBKD) with requesting SWIFT advice (SWIFT MT100) from Buyer's Bank
     to The Export-Import Bank of China, Banking Department or through other
     receiving bank to be nominated by you from time to time, in favour of you
     or your assignee.

(7)  Our obligations under this guarantee shall not be affected or prejudiced by
     any dispute between you as the SELLER and the BUYER under the Shipbuilding
     Contract or by the BUILDER's delay in the construction and/or delivery of
     the VESSEL due to whatever causes or by any variation or extension of their
     terms thereof or by any security or other indemnity now or hereafter held
     by you in respect thereof, or by any time or indulgence granted by you or
     any other person in connection therewith, or by any invalidity or
     unenforcibility of the terms thereof, or by any act, omission, fact or
     circumstances whatsoever, which could or might, but for the foregoing,
     diminish in any way our obligations under this Guarantee.

(8)  Any claim or demand shall be in writing signed by one of your officers and
     may be served on us either by hand or by post and if sent by post to
     _____________________________ (or such other address as we may notify to
     you in writing), or by tested telex (telex NO: ____________) via Bank of
     China, with confirmation in writing.

(9)  This Letter of Guarantee shall come into full force and effect upon
     delivery to you of this Guarantee and shall continue in force and effect
     until the VESSEL is delivered to and accepted by the BUYER and the BUYER
     shall have performed all its obligations for taking delivery thereof or
     until the full payment of all 2nd, 3rd, and 4th Instalments together with
     the aforesaid interests by the BAYER or us, whichever first occurs.

(10) The maximum amount, however, that we are obliged to pay to you under this
     Guarantee shall not exceed the aggregate amount of U.S. Dollars Eighteen
     Million Two Hundred and Twenty Five Thousand Five Hundred and Fifty (US$
     18,225,550.00) being an amount equal to the sum of:-

     (a)  All the 2nd, 3rd and 4th instalments guaranteed hereunder in the total
          amount of United States Dollars Eighteen Million Sixty Thousand (US$
          18,060,000.00) ; and

     (b)  Interest at the rate of Five point Five percent (5.5%) per annum on
          the Instalment for a period of sixty (60) days in the amount of United
          States Dollars One Hundred Sixty Five Thousand Five Hundred and Fifty
          (US$ 165,550.00).

(11) All payments by us under this Guarantee shall be made without any set-off
     or counterclaim and without deduction or withholding for or on account of
     any taxes, duties, or charges whatsoever unless we are compelled by law to
     deduct or withhold the same. In the latter event we shall make the minimum
     deduction or withholding permitted and will pay such additional amounts as
     may be necessary in order that the net amount received by you after such
     deductions or withholdings shall equal the amount which would have been
     Shipbuilding Contract received had no such deduction or withholding been
     required to be made.

(12) This Letter of Guarantee shall he construed in accordance with and governed
     by the Laws of England. We hereby submit to the non-exclusive jurisdiction
     of the English courts for the purposes of any legal action or proceedings
     in comedian herewith in England.

(13) This Letter of Guarantee shall have expired as aforesaid, you will return
     the same to us without any request or demand from us.

(14) IN WETNESS WI REOF, we have caused this Letter of Guarantee to be executed
     and delivered by our duly authorized representative the day and year above
     written.

Very Truly Yours


By:_______________________________


                                   Schedule 4

                           Form of Corporate Guarantee


Private & Confidential

                               Dated   November 2006
                              ---------------------

                               DIANA SHIPPING INC.                (1)

                                       and

                                   FORTIS BANK                    (2)

                  ---------------------------------------------

                               CORPORATE GUARANTEE

                  ---------------------------------------------

                                                                     ^
                                                                     NORTON ROSE


                                    Contents

Clause                                                                  Page

1   Interpretation ........................................................1

2   Guarantee .............................................................3

3   Payments and Taxes: ...................................................6

4   Representations and warranties ........................................7

5   Undertakings .........................................................10

6   Set-off ..............................................................12

7   Benefit of this Guarantee ............................................13

8   Notices and other matters ............................................13

9   Law and jurisdiction .................................................15


THIS GUARANTEE is dated ___ November 2006 and made BETWEEN:

(1)     DIANA SHIPPING INC. (the "Guarantor"); and

(2)     FORTIS BANK (the "Bank").

WHEREAS:

(A)     by a facility agreement dated November 2046 (the "Agreement") and made
        between (1) Bikini Shipping Company Inc_ and Eniwetok Company Inc. as
        joint and several borrowers (the "Borrowers") and (2) the Bank as
        lender, the Bank agreed (inter alia) to make available to the Borrowers,
        upon the terms and conditions therein contained, a loan facility of up
        to Sixty million two hundred thousand Dollars ($60,200,000) and a
        guarantee facility of up to Thirty six million four hundred and fifty
        thousand one hundred Dollars ($36,451,100); and

(B)     the execution and delivery of this Guarantee is one of the conditions
        precedent to the Bank making the Commitment available under the
        Agreement.

IT IS AGREED as follows:

1       Interpretation

1.1     Defined expressions

        In this Guarantee, unless the context otherwise requires or unless
        otherwise defined in this Guarantee, words and expressions defined in
        the Agreement and used in this Guarantee shall have the same meanings
        where used in this Guarantee.

1.2     Definitions

        In this Guarantee, unless the context otherwise requires:

        "Accounting Information" means (a) the annual audited consolidated
        financial statements of the Group and (b) the semi-annual unaudited
        consolidated financial statements of the Group, each as provided or (as
        the context may require) to be provided to the Bank in accordance with
        clause 8.1.5 of the Agreement and clause 5.1.4 of this Guarantee;

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

        "Applicable Accounting Principles" means US GAAP (being accounting
        principles and practices accepted from time to time in the United States
        of America);

        "Bank" includes the successors in title, Assignees and/or Transferees of
        the Bank;

        "Current Assets" means, in respect of an Accounting Period, the
        aggregate of the cash and marketable securities, trade and other
        receivables from persons other than a member of the Group realisable
        within one (1) year, inventories and prepaid expenses which are to be
        charged to income within one (1) year less any doubtful debts and any
        discounts or allowances given, in each case in relation to the Group, as
        stated in the then most recent Accounting Information relevant to such
        Accounting Period;

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

        (a)     Borrowed Money of the debtor;

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

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

        (d)     deferred tax of the debtor; and

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

        "Fleet Market Value" means, as of the date of calculation, the aggregate
        market value of the Fleet Vessels as most recently determined pursuant
        to valuations obtained by the Bank (at the expense of the Guarantor once
        per calendar year) and made in a manner acceptable to the Bank in its
        sole discretion;

        "Fleet Vessels" means the vessels from time to time owned by the members
        of the Group and "Fleet Vessel" means any of them;

        "Group" means, together, the Guarantor and its Subsidiaries from time to
        time (including, for the avoidance of doubt, each of the Borrowers) and
        "member of the Group" shall be construed accordingly;

        Guarantee" includes each separate or independent stipulation or
        agreement by the Guarantor contained in this Guarantee;

        "Guaranteed Liabilities" means all moneys, obligations and liabilities
        expressed to be guaranteed by the Guarantor in clause 2.1;

        "Guarantor" includes the successors in title of the Guarantor;

        "Incapacity means, in relation to a person, the death, bankruptcy,
        unsoundness of mind, insolvency, liquidation, dissolution, winding-up,
        administration, receivership, amalgamation, reconstruction or other
        incapacity whatsoever of that person (and, in the case of a partnership,
        includes the termination or change in the composition of the
        partnership);

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

        "Liquid Funds" means cash in hand or held with banks or other financial
        institutions which is free of any Encumbrances (other than Permitted
        Encumbrances);

        Net Worth" means, in respect of an Accounting Period, the sum of (a) the
        Total Assets minus (b) the Total Debt, as stated in the then most recent
        Accounting Information relevant to such Accounting Period;

        "Relevant Jurisdiction" means any jurisdiction in which or where the
        Guarantor is incorporated, resident, domiciled, has a permanent
        establishment, carries on, or has a place of business or is otherwise
        effectively connected;

        "Tangible Fixed Assets" means, in respect of an Accounting Period, the
        aggregate of (a) the Fleet Market Value and (b) the book value (i.e.
        less depreciation computed in accordance with the Applicable Accounting
        Principles consistently applied) on a consolidated basis of all other
        tangible fixed assets of the Group (i.e. excluding Fleet Vessels), as
        stated in the then most recent Accounting information relevant to such
        Accounting Period;

        "Total Assets" means, in respect of an Accounting Period, the aggregate
        of Current Assets and Tangible Fixed Assets; and

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

1.3     Headings

        Clause headings and the table of contents are inserted for convenience
        of reference only and shall be ignored in the interpretation of this
        Guarantee

1.4     Construction of certain terms

        In this Guarantee, unless the context otherwise requires:

1.4.1   references to clauses are to be construed as references to the clauses
        of this Guarantee;

1.4.2   references to (or to any specified provision of} this Guarantee or any
        other document shall be construed as references to this Guarantee, that
        provision or that document as in force for the time being and as amended
        from time to time in accordance with the terms thereof, or, as the case
        may be, with the agreement of the relevant parties;

14.3    words importing the plural shall include the singular and vice versa;

14.4    references to a time of day are to London time;

1.4.5   references to a person shall be construed as including references to an
        individual, firm, company, corporation, unincorporated body of persons
        or any Government Entity;

1.4.6   references to .a "guarantee" include references to an indemnity or other
        assurance against financial loss including, without limitation, any
        obligation to purchase assets or services as a consequence of a default
        by any other person to pay any Indebtedness and "guaranteed" shall be
        construed accordingly; and

1.4.7   references to any enactment, amended or extended shall be deemed to
        include reference to such enactment as re-enacted, amended or extended.

2       Guarantee

2.1     Covenant to pay

        In consideration of the Bank making or continuing loans or advances to,
        or otherwise giving credit or granting banking facilities or
        accommodation or granting time to, the Borrowers pursuant to the
        Agreement, the Guarantor hereby guarantees to pay to the Bank, on demand
        by the Bank, all moneys and discharge all obligations and liabilities
        now or hereafter due, owing or incurred by the Borrowers or either of
        them to the Bank under or pursuant to the Agreement and/or the other
        Security Documents when the same become due for payment or discharge
        whether by acceleration or otherwise, and whether such moneys,
        obligations or liabilities are express or implied, present, future or
        contingent, joint or several, incurred as principal or surety,
        originally owing to the Bank or purchased or otherwise acquired by it,
        denominated in Dollars or in any other currency, or incurred on any
        banking account or in any other manner whatsoever.

        Such liabilities shall, without limitation, include interest (as well
        after as before judgment) to date of payment at such rates and upon such
        terms as may from time to time be agreed, commission, fees and other
        charges and all legal and other costs, charges and expenses on a full
        and unqualified indemnity basis which may be incurred by the Bank in
        relation to any such moneys, obligations or liabilities or generally in
        respect of the Borrowers or either of them, or the Guarantor.

2.2     Guarantor as principal debtor; indemnity

        As a separate and independent stipulation, the Guarantor agrees that if
        any purported obligation or liability of the Borrowers or either of them
        which would have been the subject of this Guarantee had it been valid
        and enforceable is not or ceases to be valid or enforceable against the
        Borrowers or either of them on any ground whatsoever whether or not
        known to the Bank (including, without limitation, any irregular exercise
        or absence of any corporate power or lack of authority of, or breach of
        duty by, any person purporting to act on behalf of the Borrowers or
        either of them or any legal or other limitation, whether under the
        Limitation Acts or otherwise or any disability or Incapacity or any
        change in the constitution of the Borrowers or either of them) the
        Guarantor shall nevertheless be liable to the Bank in respect of that
        purported obligation or liability as if the same were fully valid and
        enforceable and the Guarantor were the principal debtor in respect
        thereof. The Guarantor hereby agrees to keep the Bank fully indemnified
        on demand against all damages, losses, costs and expenses arising from
        any failure of the Borrowers or either of them to perform or discharge
        any such purported obligation or liability.

2.3     Statements of account conclusive

        Any statement of account, signed as correct by an officer of the Bank,
        showing the amount of the Guaranteed Liabilities shall, in the absence
        of manifest error, be binding on and conclusive against the Guarantor.

2.4     No security taken by Guarantor

        The Guarantor warrants that it has not taken or received, and undertakes
        that until all the Guaranteed Liabilities of the Borrowers have been
        paid or discharged in full, it will not take or receive, the benefit of
        any security from the Borrowers or either of them or any other person in
        respect of its obligations under this Guarantee.

2.5     Interest

        The Guarantor agrees to pay interest on each amount demanded of it under
        this Guarantee from the date of such demand until payment (as well after
        as before judgment) at the rate specified in clause 3.4 of the Agreement
        which shall apply to this Guarantee mutatis mutandis. Such interest
        shall be compounded at the end of each period determined for this
        purpose by the Bank in the event of it not being paid when demanded but
        without prejudice to the Bank's right to require payment of such
        interest.

2.6     Continuing security and other matters This Guarantee shall:

2.6.1   secure the ultimate balance from time to time owing to the Bank by the
        Borrowers or either of them and shall be a continuing security,
        notwithstanding any settlement of account or other matter whatsoever;

2.6.2   be in addition to any present or future right or remedy held by or
        available to the Bank; and

2.6.3   not be in any way prejudiced or affected by the existence of any such
        rights or remedies or by the same becoming wholly or in part void,
        voidable or unenforceable on any ground whatsoever or by the Bank
        dealing with, exchanging, varying or failing to perfect or enforce any
        of the same or giving time for payment or indulgence or compounding with
        any other person liable.

2.7     Liability unconditional

        The liability of the Guarantor shall not be affected nor shall this
        Guarantee be discharged or reduced by reason of:

2.7.1   the Incapacity or any change in the name, style or constitution of the
        Borrowers or either of them or any other person liable;

2.7.2   the Bank granting any time, indulgence or concession to, or compounding
        with, discharging, releasing or varying the liability of, the Borrowers
        or either of them or any other person liable or renewing, determining,
        varying or increasing any accommodation, facility or transaction or
        otherwise dealing with the same in any manner whatsoever or concurring
        in, accepting or varying any compromise, arrangement or settlement or
        omitting to claim or enforce payment from the Borrowers or either of
        them or any other person liable; or

2.7.3   any act or omission which would not have discharged or affected the
        liability of the Guarantor had it been a principal debtor instead of a
        guarantor or by anything done or omitted which but for this provision
        might operate to exonerate the Guarantor.

2.8     Other claims

        The Bank shall not be obliged to make any claim or demand on, or take
        any other action against, the Borrowers or either of them or to resort
        to any other means of payment now or hereafter held by or available to
        the Bank before enforcing this Guarantee and no action taken or omitted
        by the Bank in connection with any other means of payment shall
        discharge, reduce, prejudice or affect the liability of the Guarantor
        under this Guarantee nor shall the Bank be obliged to apply any money or
        other property received or recovered in consequence of any enforcement
        or realisation of any such other means of payment in reduction the
        Guaranteed Liabilities.

2.9     Waiver of Guarantor's rights

        Until all the Guaranteed Liabilities have been paid, discharged or
        satisfied in full (and notwithstanding payment of a dividend in any
        liquidation or under any compromise or arrangement) the Guarantor agrees
        that, without the prior written consent of the Bank, it will not:

2.9.1   exercise its rights of subrogation, reimbursement and indemnity against
        the Borrowers or either of them or any other person liable in respect of
        any Guaranteed Liabilities;

2.9.2   demand or accept repayment in whole or in part of any Indebtedness now
        or hereafter due to the Guarantor from the Borrowers or either of them
        or from any other person liable in respect of any Guaranteed
        Liabilities;

2.9.3   take any step to enforce any right against the Borrowers or either of
        them or any other person liable in respect of any Guaranteed
        Liabilities; or

2.9.4   claim any set-off or counterclaim against the Borrowers or either of
        them or any other person liable or claim or prove in competition with
        the Bank in the liquidation of the Borrowers or either of them or any
        other person liable in respect of any Guaranteed Liabilities or have the
        benefit of, or share in, any payment from or composition with, the
        Borrowers or either of them or any other person liable in respect of any
        Guaranteed Liabilities now or hereafter held by the Bank for any
        Guaranteed Liabilities or for the obligations or liabilities of any
        other person liable but so that, if so directed by the Bank, it will
        prove for the whole or any part of its claim in the liquidation of the
        Borrowers or either of them or any other person liable in respect of any
        Guaranteed Liabilities on terms that the benefit of such proof and of
        all money received by it in respect thereof shall be held on trust for
        the Bank and applied in or towards discharge of the Guaranteed
        Liabilities in such manner as the Bank shall deem appropriate.

        The Guarantor . also hereby waives unconditionally and unreservedly its
        rights under Articles 855, 861, 862, 863, 866, 867 and 868 of the Greek
        Civil Code.

2.10    Suspense accounts

        Any money received in connection with this Guarantee (whether before or
        after any Incapacity of the Borrowers or either of them or the
        Guarantor) may be placed to the credit of a suspense account with a view
        to preserving the rights of the Bank to prove for the whole of its
        claims against the Borrowers or either of them or any other person
        liable or may be applied in or towards satisfaction of such of the
        Guaranteed Liabilities as the Bank may from time to time conclusively
        determine in its absolute discretion.

2.11    Settlements conditional

        Any release, discharge or settlement between the Guarantor and the Bank
        shall be conditional upon no security, disposition or payment to the
        Bank by the Borrowers or either of them or any other person liable being
        void, set aside or ordered to be refunded pursuant to any enactment or
        law relating to bankruptcy, liquidation, administration or insolvency or
        for any other reason whatsoever and if such condition shall not be
        fulfilled the Bank shall be entitled to enforce this Guarantee
        subsequently as if such release, discharge or settlement had not
        occurred and any such payment had not been made.

2.12    Guarantor to deliver up certain property

        If, contrary to clauses 2.4 or 2.9, the Guarantor takes or receives the
        benefit of any security or receives or recovers any money or other
        property, such security, money or other property shall be held on trust
        for the Bank and shall be delivered to the Bank on demand.

2.13    Retention of this Guarantee

        The Bank shall be entitled to retain this Guarantee after as well as
        before the payment or discharge of all the Guaranteed Liabilities for
        such period as the Bank may determine, but in any event no longer than
        twenty four (24) months after the end of the Security Period.

3       Payments and Taxes

3.1     No set off or counterclaim

        All payments to be made by the Guarantor under this Guarantee shall be
        made in full, without any set-off or counterclaim whatsoever and,
        subject as provided in clause 3.2, free and clear of any deductions or
        withholdings, in Dollars on the due date to such account at such bank in
        such place as the Bank may from time to time specify for this purpose.

3.2     Grossing up for Taxes

        if at any time the Guarantor is required to make any deduction or
        withholding in respect of Taxes from any payment due under this
        Guarantee for the account of the Bank, the sum due from the Guarantor in
        respect of such payment shall be increased to the extent necessary to
        ensure that, after the making of such deduction or withholding, the Bank
        receives on the due date for such payment (and retains, free from any
        liability in respect of such deduction or withholding) a net sum equal
        to the sum which it would have received had no such deduction or
        withholding been required to be made and the Guarantor shall indemnify
        the Bank against any losses or costs incurred by it by reason of any
        failure of the Guarantor to make any such deduction or withholding or by
        reason of any increased payment not being made on the due date for such
        payment. The Guarantor shall promptly deliver to the Bank any receipts,
        certificates or other proof evidencing the amounts (if any) paid or
        payable in respect of any deduction or withholding as aforesaid.

3.3     Currency indemnity

        If any sum due from the Guarantor under this Guarantee or any order or
        judgment given or made in relation hereto has to be converted from the
        currency (the "first currency") in which the same is payable under this
        Guarantee or under such order or judgment into another currency (the
        "second currency") for the purpose of (a) making or filing a claim or
        proof against the Guarantor, (b) obtaining an order or judgment in any
        court or other tribunal or (c) enforcing any order or judgment given or
        made in relation to this Guarantee, the Guarantor shall indemnify and
        hold harmless the Bank from and against any loss suffered as a result of
        any difference between (i) the rate of exchange used for such purpose to
        convert the sum in question from the first currency into the second
        currency and (ii) the rate or rates of exchange at which the Bank may in
        the ordinary course of business purchase the first currency with the
        second currency upon receipt of a sum paid to it in satisfaction, in
        whole or in part, of any such order, judgment, claim or proof. Any
        amount due from the Guarantor under this clause 3.3 shall be due as a
        separate debt and shall not be affected by judgment being obtained for
        any other sums due under or in respect of this Guarantee and the term
        "rate of exchange" includes any premium and costs of exchange payable in
        connection with the purchase of the first currency with the second
        currency.

4       Representations and warranties

4.1     Continuing representations and warranties

        The Guarantor represents and warrants to the Bank that

4.1.1   Due incorporation

        the Guarantor is duly incorporated and validly existing in good standing
        under the laws of the Republic of the Marshall Islands as a Marshall
        islands corporation and has power to carry on its business as it is now
        being conducted and to own its property and other assets;

4.1.2   Corporate power

        the Guarantor has power to execute, deliver and perform its obligations
        under this Guarantee and the other Security Documents to which it is or
        is to be a party; all necessary corporate, shareholder and other action
        has been taken to authorise the execution, delivery and performance of
        the same and no limitation on the powers of the Guarantor to borrow or
        grant security or give guarantees will be exceeded as a result of giving
        this Guarantee or any of the other Security Documents to which it is or
        is to be a party;

4.1.3   Binding obligations

        this Guarantee and the other Security Documents to which the Guarantor
        is or is to be a party constitute or will, when executed, constitute
        valid and legally binding obligations of the Guarantor enforceable in
        accordance with their respective terms;

4.1.4   No conflict with other obligations

        the execution and delivery of, the performance of its obligations under,
        and compliance with the provisions of, this Guarantee and the Security
        Documents to which the Guarantor is or is to be a party by the Guarantor
        will not (i) contravene any existing applicable law, statute, rule or
        regulation or any judgment, decree or permit to which the Guarantor is
        subject, (ii) conflict with, or result in any breach of any of the terms
        of, or constitute a default under, any agreement or other instrument to
        which the Guarantor is a party or is subject or by which it or any of
        its property is bound, (iii) contravene or conflict with any provision
        of the constitutional documents of the Guarantor or (iv) result in the
        creation or imposition of or oblige the Guarantor to create any
        Encumbrance on any of the Guarantor's undertakings, assets, rights or
        revenues;

4.1.5   No litigation

        no litigation, arbitration or administrative proceeding is taking place,
        pending or, to the knowledge of the officers of the Guarantor,
        threatened against the Guarantor or any of its Related Companies which
        could have a material adverse effect on the business, assets or
        financial condition of the Guarantor;

4.1.6   No filings required

        it is not necessary to ensure the legality, validity, enforceability or
        admissibility in evidence of this Guarantee or any of the other Security
        Documents to which the Guarantor is or is to be a party that they or any
        other instrument be notarised, filed, recorded, registered or enrolled
        in any court, public office or elsewhere in any Relevant Jurisdiction or
        that any stamp, registration or similar tax or charge be paid in any
        Relevant Jurisdiction on or in relation to this Guarantee or any such
        Security Document and each of this Guarantee and any such Security
        Document is in proper form for its enforcement in the courts of each
        Relevant Jurisdiction;

4.1.7   Choice of law

        the choice by the Guarantor of English law to govern this Guarantee and
        the other Security Documents to which the Guarantor is or is to be a
        party, and the submission by the Guarantor to the non-exclusive
        jurisdiction of the English courts are valid and binding;

4.1.8   No immunity

        neither the Guarantor nor any of its assets is entitled to immunity on
        the grounds of sovereignty or otherwise from any legal action or
        proceeding (which shall include, without limitation, suit, attachment
        prior to judgement, execution or other enforcement);

4.1.9   Financial statements correct and complete

        the unaudited consolidated financial statements of the Group in respect
        of the financial half-year ended on 30 June 2006 as delivered to the
        Bank have been prepared in accordance with the Applicable Accounting
        Principles which have been consistently applied and present fairly and
        accurately the consolidated financial position of the Group as at such
        date and the consolidated results of the operations of the Group for the
        financial period ended on such date and, as at such date, neither the
        Guarantor nor any of its Subsidiaries had any significant liabilities
        (contingent or otherwise) or any unrealised or anticipated losses which
        are not disclosed by, or reserved against or provided for in, such
        financial statements;

4.1.10  Consents obtained

        every consent, authorisation, licence or approval of, or registration
        with or declaration to, governmental or public bodies or authorities or
        courts required by the Guarantor to authorise, or required by the
        Guarantor in connection with, the execution, delivery, validity,
        enforceability or admissibility in evidence of this Guarantee and each
        of the other Security Documents to which it is or is to be a party or
        the performance by the Guarantor of its obligations under this Guarantee
        or the other Security Documents to which it is or is to be a party has
        been obtained or made and is in full force and effect and there has been
        no default in the observance of any of the conditions or restrictions
        (if any) imposed in, or in connection with, any of the same;

4.1.11  No material adverse change

        there has been no material adverse change:

        (a)     in the business, assets, operations, prospects or condition
                (financial or otherwise) of the Guarantor, the Borrowers or the
                Group as a whole, from that described by or on behalf of the
                Guarantor to the Bank in the negotiation of this Guarantee;

        (b)     in the business, assets, operations, prospects or the financial
                position of the Guarantor or the Group as a whole from that set
                forth in the semi-annual unaudited consolidated financial
                statements of the Group for the financial half-year year ended
                30 June 2006; or

        (c)     in the ability of either of the Borrowers, the Guarantor or any
                other Security Party to comply with any of their respective
                obligations under the Security Documents or any of them; or

        (d)     in the legality, validity or enforceability of any of the
                Security Documents or any of the rights or remedies of the Bank
                thereunder; and

4.1.12  Shareholdings

        each of the Borrowers is a wholly-owned direct Subsidiary of the
        Guarantor and, on the date of this Guarantee, no less than 20% of the
        voting share capital of the Guarantor is ultimately beneficially owned
        by such two (2) persons and their immediate families as has been
        disclosed by the Borrowers to the Bank in the negotiation of the
        Agreement.

4.2     Initial representations and warranties

        The Guarantor further represents and warrants to the Bank that:

4.2.1   Pan passu

        without prejudice to clause 5.2, the obligations of the Guarantor under
        this Guarantee are direct, general and unconditional obligations of the
        Guarantor and rank at least pari passu with all other present and future
        unsecured and unsubordinated Indebtedness of the Guarantor with the
        exception of any obligations which are mandatorily preferred by law;

4.2.2   No default under other Indebtedness

        the Guarantor is not, nor would with the giving of notice or lapse of
        time or the satisfaction of any other condition or any combination
        thereof be, in breach of or in default under any agreement relating to
        Indebtedness to which it is a party or by which it may be bound(.),

4.2.3   information

        the information, exhibits and reports furnished by the Guarantor to the
        Bank in connection with the negotiation and preparation of this
        Guarantee are true and accurate in all material respects and not
        misleading, and all expressions or opinions contained therein genuinely
        reflect the opinion of the director and the senior management of the
        Guarantor and are based on reasonable assumptions; do not omit material
        facts and all reasonable enquiries have been made to verify the facts
        and statements contained therein; there are no other facts the omission
        of which would make any fact or statement therein misleading;

4.2.4   No withholding Taxes

        no Taxes are imposed by withholding or otherwise on any payment to be
        made by the Guarantor under this Guarantee or the Security Documents to
        which the Guarantor is or is to be a party or are imposed on or by
        virtue of the execution or delivery by the Guarantor of this Guarantee
        or any such other Security Document or any other document or instrument
        to be executed or delivered under this Guarantee or any such other
        Security Document; and

4.2.5   No Default

        no Default has occurred and is continuing.

4.3     Repetition of representations and warranties

        On and as of each day from the date of this Guarantee until all moneys
        due or owing, whether actually or contingently, by the Borrowers or
        either of them under the Agreement and/or the other Borrower's Security
        Documents and/or by the Guarantor under this Guarantee have been paid in
        full, the Guarantor shall be deemed to repeat the representations and
        warranties in clause 4.1 (and so that the representation and warranty in
        clause 4.1.9 shall for this purpose refer to the then latest audited
        statements delivered to the Bank under clause 5.1.4) and 4.2 as if made
        with reference to the facts and circumstances existing on each such day.

5       Undertakings

5.1     General

        The Guarantor undertakes with the Bank that, from the date of this
        Guarantee and so long as any moneys are owing under any of the Security
        Documents, whether actually or contingently, and while all or any part
        of the Commitment remains outstanding, it will:

5.1.1   Notice of Default

        promptly inform the Bank of any occurrence of which it becomes aware
        which might adversely affect its ability to perform its obligations
        under this Guarantee or any of the other Security Documents to which it
        is or is to be a party and, without limiting the generality of the
        foregoing, will inform the Bank of any Default forthwith upon becoming
        aware thereof and will from time to time, if so requested by the Bank,
        confirm to the Bank in writing that, save as otherwise stated in such
        confirmation, no Default has occurred and is continuing;

5.1.2   Consents and licences

        without prejudice to clause 4.1, obtain or cause to be obtained,
        maintain in full force and effect and comply in ail material respects
        with the conditions and restrictions (if any) imposed in, or in
        connection with, every consent, authorisation, licence or approval of
        governmental or public bodies or authorities or courts and do, or cause
        to be done, all other acts and things which may from time to time be
        necessary or desirable under applicable law for the continued due
        performance of all its obligations under this Guarantee and each of the
        other Security Documents to which it is or is to be a party;

5.1.3   Pari passu

        ensure that its obligations under this Guarantee shall, without
        prejudice to the provisions of clause 5.2, at all times rank at least
        pari passu with all its other present and future unsecured and
        unsubordinated Indebtedness, with the exception of any obligations which
        are mandatorily preferred by law and not by contract;

5.1.4   Financial statements

        prepare or cause to be prepared:

        (a)     consolidated financial statements of the Group in accordance
                with the Applicable Accounting Principles consistently applied
                in respect of each financial year and cause the same to be
                reported on by its auditors; and

        (b)     unaudited consolidated financial statements of the Group in
                accordance with the Applicable Accounting Principles
                consistently applied in respect of each financial half-year,

        and deliver as many copies of the same to the Bank as the Bank may
        reasonably require as soon as practicable but not later than one hundred
        and eighty (180) days (in the case of the audited financial statements)
        or ninety (90) days (in the case of the unaudited financial statements)
        after the end of the financial period to which they relate;

5.1.5   Delivery of reports

        deliver to the Bank copies of each of the following documents, in each
        case at the time of issue thereof of every report, circular, notice or
        like document issued by the Guarantor to its shareholders or creditors
        generally; and

5.1.6   Provision of further information

        provide the Bank with such financial and other information concerning
        the Borrowers, their Related Companies, the other Security Parties, any
        Relevant Parties and their respective operations and affairs as the Bank
        may from time to time reasonably require;

5.1.7   Obligations under Security Documents

        duly and punctually perform each of the obligations expressed to be
        assumed by it under this Guarantee and each of the other Security
        Documents to which it is or is to be a party;

5.1.8   Compliance with laws and regulations

        comply with the terms and conditions of all laws, regulations,
        agreements, licences and concessions material to the carrying on of its
        business; and

5.1.9   Know your customer information

        deliver to the Bank such documents and evidence as the Bank shall from
        time to time require relating to the verification of identity and
        knowledge of the Bank's customers and the compliance by the Bank with
        all necessary "know your customer" or similar checks, always on the
        basis of applicable laws and regulations or the Bank's own internal
        guidelines, in each case as such laws, regulations or internal
        guidelines apply from time to time.

5.2     Negative undertakings

        The Guarantor undertakes with the Bank that, from the date of this
        Guarantee and so long as any moneys are owing under the Security
        Documents, whether actually or contingently, and while all or any part
        of the Commitment remains outstanding, it will not, without the prior
        written consent of the Bank:

5.2.1   Negative pledge

        permit any Encumbrance (other than a Permitted Encumbrance) to subsist,
        arise or be created or extended over all or any part of its present or
        future undertaking, assets, rights or revenues to secure or prefer any
        present or future Indebtedness of the Guarantor or any other person but
        for the avoidance of doubt this clause 5.2.1 does not cover any
        guarantees given by the Guarantor or any encumbrances of Subsidiaries of
        the Guarantor;

5.2.2   No merger

        merge or consolidate with any other person or enter into any de-merger,
        amalgamation or corporate reconstruction or redomiciliation of any kind;

5.2.3   Other business

        undertake any business other than that conducted by the Guarantor at the
        date of this Guarantee;

5.2.4   Shareholdings

        change, cause or permit any change in, the legal and/or ultimate
        beneficial ownership of either of the Borrowers or the Guarantor which
        would result in (a) either of the Borrowers ceasing to be a wholly-owned
        direct Subsidiary of the Guarantor and/or (b) less than twenty per cent
        (20%) of the issued voting share capital of the Guarantor being
        ultimately beneficially owned by such two (2) persons and their
        immediate families as were disclosed by the Borrowers to the Bank in the
        negotiation of the Agreement to be the ultimate beneficial owners of no
        less than 20% of the shares in the Corporate Guarantor at the date of
        the Agreement; or

5.2.5   Other obligations

        incur any obligations other than in the ordinary course of its business;

5.3     Financial undertakings

5.3.1   The Guarantor undertakes that, from the date of this Guarantee and so
        long as any moneys are owing under the Agreement or any other Security
        Document whether actually or contingently, it will ensure that:

        (a)     Liquidity

                the Group (on a consolidated basis) maintains at the end of each
                Accounting Period and at all other times, Liquid Funds in an
                amount of no less than Four hundred thousand Dollars ($400,000)
                per Fleet Vessel; and

        (b)     Net Worth

                the Net Worth will be, at the end of each Accounting Period and
                at all other times (a) at least One hundred and fifty million
                Dollars ($150,000,000) and (b) higher than twenty five percent
                (25%) of the Total Assets.

5.3.2   All the terms defined in this clause 5.3 or in clause 1.2 and used in
        this clause 5.3, and other accounting terms used in this clause 5.3, are
        to be determined on a consolidated basis and (except as items are
        expressly included or excluded in the relevant definition or provision)
        are used and shall be construed in accordance with the Applicable
        Accounting Principles consistently applied and as determined on the
        basis of calculations made by the Bank in its discretion (which
        calculations shall, in the absence of manifest error, be conclusive on
        the Guarantor) by reference to any relevant Accounting Information or
        any other relevant information available to the Bank, in each case at
        any relevant time.

5.3.3   Without prejudice to the other terms of this clause 5.3 and, in
        particular, the time when compliance with the financial covenants and
        ratios of clause 5.3.1 is to be measured by the Bank pursuant to clause
        5.3.2, the Guarantor hereby undertakes that the financial covenants and
        ratios of clause 5.3.1 will be complied with at all times during the
        whole term of each Accounting Period.

5.3.4   For the purposes of this clause 5.3: (i) no item shall be deducted or
        credited more than once in any calculation; and (ii) any amount
        expressed in a currency other than Dollars shall be converted into
        Dollars in accordance with generally accepted international accounting
        principles consistently applied.

6       Set-off

        Following the occurrence of an Event of Default which is continuing, the
        Guarantor authorises the Bank to apply any credit balance to which the
        Guarantor is then entitled on any account of the Guarantor with the Bank
        at any of its branches in or towards satisfaction of any sum then due
        and payable from the Guarantor to the Bank under this Guarantee. For
        this purpose the Bank is authorised to purchase with the moneys standing
        to the credit of such account such other currencies as may be necessary
        to effect such application. The Bank shall not be obliged to exercise
        any right given to it by this clause 6. The Bank shall notify the
        Guarantor forthwith upon the exercise or purported exercise of any right
        of set-off giving full details in relation thereto.

7       Benefit of this Guarantee

7.1     Benefit and burden

        This Guarantee shall be binding upon the Guarantor and its successors in
        title, Assignees and/or Transferees and shall enure for the benefit of
        the Bank and its successors in title, Assignees and/or Transferees. The
        Guarantor expressly acknowledges and accepts the provisions of clause 15
        of the Agreement and agrees that any person in favour of whom an
        assignment or transfer is made in accordance with such clause shall be
        entitled to the benefit of this Guarantee.

7.2     Changes in constitution or reorganisation of the Bank

        For the avoidance of doubt and without prejudice to the provisions of
        clause 7.1, this Guarantee shall remain binding on the Guarantor
        notwithstanding any change in the constitution of the Bank or its
        absorption in, or amalgamation with, or the acquisition of all or part
        of its undertaking or assets by, any other person, or any reconstruction
        or reorganisation of any kind, to the intent that this Guarantee shall
        remain valid and effective in all respects in favour of any successor in
        title, Assignee and/or Transferee of the Bank in the same manner as if
        such successor in title, Assignee or Transferee had been named in this
        Guarantee as a party instead of, or in addition to, the Bank.

7.3     No assignment by Guarantor

        The Guarantor may not assign or transfer any of its rights or
        obligations under this Guarantee.

7.4     Disclosure of information

        The Bank may following prior consultation with the Borrowers disclose to
        a prospective assignee, transferee or to any other person who may
        propose entering into contractual relations with the Bank in relation to
        the Agreement.

8       Notices and other matters

8.1     Notices

        Clause 17 of the Agreement shall apply to this Guarantee as if set out
        herein and every notice, request, demand or other communication under
        this Guarantee shall be sent:

8.1.1   if to the Guarantor at:

        c/a Diana Shipping Services S.A.
        Pendelis 16
        175 64 Palaio Faliro
        Athens Greece

        Fax no:  +30 210 947 0101
        Attention: Mr Andreas Michalopoulos

8.1.2   if to the Bank at:

        Fortis Bank
        166 Syngrou Avenue
        Athens 176 71
        Greece

        Fax No:  +30 210 954 4368
        Attention:Mr George Arcadis

        or to such other address or facsimile number as is notified by the
        Guarantor or the Bank to the other party to this Guarantee.

8.2     No implied waivers, remedies cumulative

        No failure or delay on the part of the Bank to exercise any power, right
        or remedy under this Guarantee shall operate as a waiver thereof, nor
        shall any single or partial exercise by the Bank of any power, right or
        remedy preclude any other or further exercise thereof or the exercise of
        any other power, right or remedy. The remedies provided in this
        Guarantee are cumulative and are not exclusive of any remedies provided
        by law. Any term of this Guarantee may be amended or waived only in
        writing.

8.3     Other guarantors

        The Guarantor agrees to be bound by this Guarantee notwithstanding that
        any other person intended to execute or to be bound by any other
        guarantee or assurance under or pursuant to the Agreement may not do so
        or may not be effectually bound and notwithstanding that such other
        guarantee or assurance may be determined or be or become invalid or
        unenforceable against any other person, whether or not the deficiency is
        known to the Bank.

8.4     English translations

        All certificates, instruments and other documents to be delivered under
        or supplied in connection with this Guarantee shall be in the English
        language or shall be accompanied by a certified English translation upon
        which the Bank shall be entitled to rely.

8.5     Expenses

        The Guarantor agrees to reimburse the Bank. on demand for all legal and
        other costs, charges and expenses on a full and unqualified indemnity
        basis which may be incurred by the Bank in relation to the enforcement
        of this Guarantee against the Guarantor.

8.6     Partial invalidity

        If, at any time, any provision of this Guarantee is or becomes illegal,
        invalid or unenforceable in any respect under any law of any
        jurisdiction, neither the legality, validity or enforceability of the
        remaining provisions nor the legality, validity or enforceability of
        such provision in any other respect or under the law of any other
        jurisdiction will be affected or impaired in any way.

8.7     Miscellaneous

8.7.1   This Guarantee contains the entire agreement of the parties and its
        provisions supersede any and all other prior correspondence and oral
        negotiation by the parties in respect of the matters regulated by the
        Guarantee.

8.7.2   This Guarantee shall not be amended or varied in its terms by any oral
        agreement or representation or in any other manner other than by an
        instrument in writing of even date herewith or subsequent hereto
        executed by or on behalf of the parties hereto.

8.8     Maximum liability

        Anything contained in this Guarantee to the contrary notwithstanding,
        the obligations of the Guarantor hereunder shall be limited to a maximum
        aggregate amount equal to the greatest amount that would not render the
        Guarantor's obligations hereunder subject to avoidance as a fraudulent
        transfer or conveyance under Section 548 of Title 11 of the United
        States Code or any similar provisions of applicable law (collectively,
        the "Fraudulent Transfer Laws"), in each case after giving effect to all
        other liabilities of the Guarantor, contingent or otherwise, that are
        relevant under the Fraudulent Transfer Laws (specifically excluding,
        however, any liabilities of the Guarantor (a) in respect of
        inter-company Indebtedness to the Borrowers or any Related Companies of
        the Borrowers to the extent that such Indebtedness would be discharged
        in an amount equal to the amount paid by the Guarantor hereunder and (b)
        under any guarantee of Indebtedness subordinated in right of payment to
        the Guaranteed Liabilities, which guarantee contains a limitation as to
        maximum amount similar to that set forth in this paragraph, pursuant to
        which the liability of the Guarantor hereunder is included in the
        liabilities taken into account in determining such maximum amount) and
        after giving effect as assets to the value (as determined under the
        applicable provisions of the Fraudulent Transfer Laws) of any rights to
        subrogation, contribution, reimbursement, indemnity or similar rights of
        the Guarantor pursuant to (i) applicable law or (ii) any agreement
        providing for an equitable allocation among the Guarantor and other
        affiliates of the Borrowers of obligations arising under guarantees by
        such parties."

9       Law and jurisdiction

9.1     Law

        This Guarantee is governed by, and shall be construed in accordance
        with, English law.

9.2     Submission to jurisdiction

        The Guarantor agrees for the benefit of the Bank that any legal action
        or proceedings arising out of or in connection with this Guarantee
        against the Guarantor or any of its assets may be brought in the English
        courts. The Guarantor irrevocably and unconditionally submits to the
        jurisdiction of such courts and irrevocably designates, appoints and
        empowers Nicolaou & Co. Chartered Accountants at present of Heath Drive,
        Potters Bar, Herts, EN6 1 EN, England to receive for it and on its
        behalf, service of process issued out of the English courts in any such
        legal action or proceedings. The submission to such jurisdiction shall
        not (and shall not be construed so as to) limit the right of the Bank to
        take proceedings against the Guarantor in the courts of any other
        competent jurisdiction, nor shall the taking of proceedings in any one
        or more jurisdictions preclude the taking of proceedings in any other
        jurisdiction, whether concurrently or not. The Guarantor further agrees
        that only the courts of England and not those of any other State shall
        have jurisdiction to determine any claim which the Guarantor may have
        against the Bank arising out of or in connection with this Guarantee.

9.3     Contracts (Rights of Third Parties) Act 1999

        No term of this Guarantee is enforceable under the provisions of the
        Contracts (Rights of Third Parties) Act 1999 by a person who is not a
        party to this Guarantee.

IN WITNESS whereof the parties to this Guarantee have caused this Guarantee to
be duly executed as a deed on the date first above written.


EXECUTED as a DEED                            )
by
for and on behalf of                          )
DIANA SHIPPING                                )
INC. in the                                   )  ______________________
presence of:                                  )  Attorney-in-Fact


____________________
Witness
Name:
Address:
Occupation:

EXECUTED as a DEED                            )
by                                            )  ________________________
and by                                        )  Authorised signatory
for and on behalf of                          )
FORTIS BANK                                   )  _____________________________
in the presence of:                           )  Authorised signatory



____________________
Witness
Name:
Address:
Occupation


                                   Schedule 5
                    Form of Pre-delivery Security Assignment


Private & Confidential

                                 Dated [o] 2006

                    [BIKINI] [ENIWETOK] SHIPPING COMPANY INC.       (1)

                                      and
                                   FORTIS BANK                      (2)

             ------------------------------------------------------

                        PRE-DELIVERY SECURITY ASSIGNMENT
             in respect of Hull No. [HI107] [H1108] currently under
                                 construction at
                 China Shipbuilding Trading Company, Limited and
                   Shanghai Waigooqiao Shipbuilding Co., Ltd.

             ------------------------------------------------------

                                                                     ^
                                                                     NORTON ROSE


                                    Contents

Clause                                                                   Page

1     Definitions ..........................................................1

2     Assignment ...........................................................3

3     Undertakings .........................................................4

4     Continuing security and other matters ................................6

5     Powers of the Bank ...................................................7

6     Application of moneys ................................................8

7     Remedies cumulative and other provisions .............................9

8     Costs and indemnity ..................................................9

9     Attorney ..............................................................

10    Further assurance ...................................................10

11    Assignment ..........................................................10

12    Notices .............................................................11

13   Law and jurisdiction .................................................11

Schedule 1 Form of notice of assignment of Contract and acknowledgement ...12

Schedule 2 Form of notice of assignment of Refund Guarantee and
           acknowledgement ................................................16


THIS DEED OF ASSIGNMENT is made the [o] day of [o] 2006 T BETWEEN:

(1)   [BIKINI] [ENIWETOK] SHIPPING COMPANY INC., a corporation incorporated in
      the Republic of Marshall Islands whose registered office is at Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
      MH96960 (the "Buyer"); and

(2)   FORTIS BANK, a company whose registered office is at Montagne du Parc 3,
      1000 Brussels, Belgium, acting for the purposes of this Agreement through
      its branch at 166 Syngrou Avenue, 176 71 Athens, Greece (the "Bank").

WHEREAS

(A)   [Equity Enterprises Corp.] [Loki Commercial S.A.] (the "Original Buyer")
      has entered into a shipbuilding contract and an addendum no. 1 thereto,
      each dated 30 March 2006 with China Shipbuilding Trading Company, Limited
      ("CSTC") and Shanghai Waigacgiao Shipbuilding Co., Ltd. (SWS" and,
      together with CSTC, collectively referred to as the "Builders" and each a
      "Builder"), as novated in favour of the Buyer and the Builders by a
      novation agreement dated 13 September 2006 (together the "Contract"), in
      relation to the construction and sale by the Builders, and the purchase by
      the Buyer, of a 177,000 dwt steel-hulled, single-screw, diesel-driven bulk
      carrier to be known during construction as Hull No. [H1107] [H1108) (the
      "Ship");

(B)   by a facility agreement dated [o] 2006 (the "Agreement") and made between
      (1) the Buyer, and [Eniwetok] [Bikini] Shipping Company Inc. as joint and
      several borrowers (therein and herein referred to as the "Borrowers") and
      (2) the Bank, the Bank agreed (inter alga) to make available to the
      Borrowers, upon the terms and conditions therein contained, a loan
      facility of up to Sixty million two hundred thousand Dollars ($60,200,000)
      and a guarantee facility of up to Thirty six million four hundred and
      fifty one thousand one hundred Dollars ($36,451,100); and

(C)   this Deed is the [Bikini] [Eniwetok] Pre-delivery Security Assignment
      referred to in the Agreement and is supplemental to the Agreement.

NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:

1     Definitions

1.1   Defined expressions

      Words and expressions defined in the Agreement shall, unless otherwise
      defined in this Deed, or the context otherwise requires, have the same
      meanings when used in this Deed.

1.2   Definitions

      In this Deed, unless the context otherwise requires:

      "Agreement" means the facility agreement referred to in recital (B)
      hereto;

      "Assigned Documents" means:

      (a)   the Contract; and

      (b)   each Refund Guarantee;

      "Assigned Property" means all of the Buyer's rights, title, interest and
      all its benefits present and future in and under the Assigned Documents
      and in all moneys payable by the Builders or either of them or the Refund
      Guarantor to the Buyer thereunder including, without prejudice to the
      generality of the foregoing, all claims for damages in respect of any
      breach by the Builders or either of them of the Contract or by the Refund
      Guarantor of any Refund Guarantee and all the rights of the Buyer to take
      delivery of and title to the Ship under the Contract;

      "Bank" includes the successors in title and the Assignees and/or
      Transferees of the Bank; "Builders" includes the respective successors in
      title of the Builders; "Buyer" includes the successors in title of the
      Buyer;

      "Contract" means the shipbuilding contract referred to in recital (A)
      hereto;

      "Expenses" means the aggregate at any relevant time (to the extent that
      the same have not been received or recovered by the Bank) of:

      (a)   all losses, liabilities, costs, charges, expenses, damages and
            outgoings at whatever nature (including without limitation Taxes,
            repair costs, registration fees, insurance premiums, commission in
            connection with any assignment of the Assigned Property or the sale
            of the Ship, costs of supervision of construction of the Ship and
            costs of safeguarding, maintaining and insuring the Ship in the
            event of her sale after delivery under the Contract) suffered,
            incurred or paid by the Bank in connection with the exercise of the
            powers referred to in or granted by the Agreement or this Deed or
            any of the other Security Documents or otherwise payable by the
            Buyer in accordance with clause 8; and

      (b)   interest on all such losses, liabilities, costs, charges, expenses,
            damages and outgoings from the date on which the same were suffered,
            incurred or paid by the Bank until the date of receipt or recovery
            thereof (whether before or after judgment) at a rate per annum
            calculated in accordance with clause 3.4 of the Agreement (as
            conclusively certified by the Bank);

      "Outstanding Indebtedness" means the Loan, interest accrued and accruing
      thereon and all other sums actually or contingently owing to the Bank
      under the Agreement, the Expenses and all other sums payable by the
      Borrowers or either of them to the Bank under or pursuant to the terms of
      this Deed or any of the other Security Documents;

      "Refund Guarantees" means, together, the letter of guarantee no. [o] dated
      [o) issued by the Refund Guarantor in favour of the Buyer in respect of
      certain of the Builders' obligations under the Contract and any further
      guarantee(s) to be issued by the Refund Guarantor in respect of such
      obligations, including pursuant to any agreement supplemental to the
      Contract, any extensions, renewals or replacements thereto or thereof and
      "Refund Guarantee" means any of them;

      "Refund Guarantor" means Export-Import Bank of China, Head Office of
      Winland International Finance Centre, No. 7 Financial Street, Xicheng
      District, Beijing 100034, People's Republic of China and includes its
      successors in title or such other bank as the Bank shall approve in its
      sole discretion; and

      "Security Period" means the period commencing on the date of this Deed and
      terminating upon the later of (a) discharge of the security created by the
      Security Documents and payment of all moneys payable thereunder, whether
      actually or contingently, and (b) the latest Bank Guarantee Expiry Date.

1.3   Headings

      Clause headings and the table of contents are inserted for convenience of
      reference only and shall be ignored in the interpretation of this Deed.

1.4   Construction of certain terms

      Clause 1.4 of the Agreement shall apply to this Deed as if set out herein.

1.5   Conflict with Agreement

      This Deed shall be read together with the Agreement but in case of any
      conflict between this Deed and the Agreement, the provisions of the
      Agreement shall prevail.

2     Assignment

2.1   Assignment

      By way of security for payment of the Outstanding Indebtedness, the Buyer
      with full title guarantee hereby assigns and agrees to assign to the Bank
      the Assigned Property provided however that.

2.1.1   all moneys payable to the Buyer comprised in the Assigned Property
        (other than moneys described in clauses 6.1.1, 6.1.2, 6.1.3, 6.1.4,
        6.1.5 or 6.1.6 which shall in all circumstances be payable to the Bank)
        shall be payable to such account of the Buyer as the Bank shall from
        time to time agree in writing, and shall be at the disposal of the Buyer
        until such time as a Default shall occur and the Bank shall direct to
        the contrary whereupon the Buyer shall forthwith, and the Bank may at
        any time thereafter, instruct the persons from whom such moneys are then
        payable to pay the same to the Bank or as it may direct and any such
        moneys then in the hands of the Buyer's agents shall be deemed to have
        been received by them for the use and on behalf of the Bank;

2.1.2   unless and until a Default shall occur and the Bank shall have given
        notice to the Buyer that the Bank intends to enforce its rights under
        this Deed, the Buyer shall be entitled to exercise all its rights under
        the Assigned Documents (subject as provided in this Deed) in all
        respects as if the foregoing assignment had not been made;

2.1.3   the Bank shall be under no obligation to implement any of the Assigned
        Documents unless the Bank sees fit to do so;

2.1.4   if the Bank sees fit to implement any of the Assigned Documents and if
        the Bank makes any payments in respect of or relating to the Contract
        (including any payments made by the Bank in addition to any such amount
        or amounts as the Bank is obliged to pay pursuant to the terms of the
        Agreement) all moneys so expended by the Bank for the purpose aforesaid
        shall on demand be repaid by the Buyer to the Bank together with
        interest thereon (as well after as before judgment) at the rate referred
        to in clause 3.4 of the Agreement from the time of such expenditure
        until payment (such interest to accrue due from day to day and to be
        calculated on the basis of actual days elapsed and a year of three
        hundred and sixty (360) days) and until so repaid shall be charged on
        the property hereby assigned; and

2.1.5   upon payment and discharge in full to the satisfaction of the Bank of
        the Outstanding Indebtedness, the Bank shall, at the request and cost of
        the Buyer, re-assign the Assigned Property to the Buyer or as it may
        direct.

2.2   Notice of assignment

      The Buyer hereby covenants and undertakes with the Bank:

2.2.1   forthwith after execution and delivery of this Deed, to give written
        notice to the Builders and the Refund Guarantor in the form, or
        substantially the form, of the notices set out in schedule 1 and
        schedule 2 respectively; and

2.2.2   in respect of each refund guarantee issued after the date of this Deed
        and falling within the definition of "Refund Guarantees" in clause 12,
        forthwith after its issuance to give written notice to the Refund
        Guarantor in the form, or substantially the form, of the notice set out
        in schedule 2, and, in each such case, will procure that each of the
        Builders and the Refund Guarantor, respectively, signs and delivers to
        the Bank the form of acknowledgement attached to such notice not later
        than thirty (30) days thereafter.

3     Undertakings

3.1   Positive undertakings

      The Buyer hereby undertakes and agrees with the Bank that throughout the
      Security Period it will:

3.1.1   Document of title to the Ship

        give irrevocable instructions to the Builders to hold the Ship and the
        builder's certificate and any other document of title to the Ship to the
        order and at the disposal of the Bank and ensure that the Builders
        comply with such instructions;

3.1.2   Performance of Contract

        duly and punctually observe and perform all the conditions and
        obligations imposed on it by the Contract;

3.1.3   Performance by Builders

        ensure that the Builders observe and perform all conditions and
        obligations imposed on them by the Contract and take all steps within
        its power to ensure that the Builders proceed with the construction of
        the Ship with due diligence and despatch;

3.1.4   Progress of construction and technical surveys

        (a)     upon the request of the Bank, advise the Bank of the progress of
                construction of the Ship and supply the Bank with such other
                information as the Bank may require and the Buyer may have
                regarding the Ship and the materials allocated or appropriated
                to the Ship (including but without limitation any progress
                report received by the Buyer pursuant to the Contract), the
                Assigned Documents, the Assigned Property or otherwise relating
                to the construction of the Ship; and

        (b)     upon the Bank's request, permit the inspection of the Ship and
                the progress of construction thereof by representatives of the
                Bank (whether technical surveyors or otherwise) but at
                reasonable intervals at the cost and expense of the Owner and
                permit to such representatives, or procure that they are
                permitted, access on board the Ship and/or at the premises of
                the Builders where construction is taking place and at the
                premises and books and records of the persons supervising the
                construction of the Ship on behalf of the Buyer (whether at the
                construction site or otherwise);

3.1.5   Arbitration under Contract

        in the event that the Builders or either of them and/or the Buyer
        resorts to arbitration as provided in Article XIII of the Contract,
        immediately notify the Bank in writing that such arbitration has been
        initiated, advise the Bank in writing of the identity of the appointed
        arbitrators and upon termination of the arbitration notify the Bank in
        writing to that effect and supply the Bank with a copy of the
        arbitration award and, if not English, a certified English translation
        thereof;

3.1.6   Enforcement of Buyer's rights

        do or permit to be done each and every act or thing which the Bank may
        from time to time require to be done for the purpose of enforcing the
        Buyer's rights under or pursuant to the Assigned Documents and allow the
        name of the Buyer to be used as and when required by the Bank for that
        purpose;

3.1.7   Notification of rejection of Ship etc.

        notify the Bank immediately if the Builders or either of them or the
        Refund Guarantor or (with the prior written consent of the Bank given
        pursuant to clause 3.2) the Buyer cancels, rescinds, repudiates or
        otherwise terminates any of the Assigned Documents or purports to do so
        or (with the prior written consent of the Bank given pursuant to clause
        3.2) rejects the Ship or if the Ship shall become a Total Loss or
        partial loss or shaft be otherwise damaged; and

3.1.8   Further Refund Guarantees

        (a)     provide to the Bank a copy, certified as a true and complete
                copy by an officer of the Buyer, of any further Refund Guarantee
                issued by the Refund Guarantor (other than those Refund
                Guarantees in existence on the date of this Deed) immediately
                following the issuance of such Refund Guarantee; and

        (b)     provide to the Bank within twenty (20) days following the
                issuance of any such further Refund Guarantee provided to the
                Bank pursuant to paragraph (a) above, evidence in form and
                substance acceptable to the Bank in its sole discretion that
                such Refund Guarantee has been duly registered with SAFE.

3.2   Negative undertakings

      The Buyer hereby further undertakes and agrees with the Bank that
      throughout the Security Period it will not without the previous consent in
      writing of the Bank (and then only subject to such conditions as the Bank
      may impose):

3.2.1   Disposals

        sell, assign or otherwise dispose of or create or grant or permit to
        subsist any Encumbrance over, of or relating to, any of the Assigned
        Property other than this Deed;

3.2.2   Sale

        sell or agree to sell the Ship or any share or interest therein;

3.2.3   Creation of Encumbrances

        create or agree to create or permit to subsist any Encumbrance over the
        Ship (or any share or interest therein) other than Encumbrances created
        or to be created pursuant to this Deed or the Agreement;

3.2.4   Variation of Refund Guarantees; releases and waivers of Refund
        Guarantees

        agree to any variation of any Refund Guarantee or release the Refund
        Guarantor from any of its obligations thereunder or waive any breach of
        the Refund Guarantor's obligations thereunder or consent to any such act
        or omission of the Refund Guarantor as would otherwise constitute such
        breach;

3.2.5   Variations of Contract; releases and waivers of Contract

        agree to any variation of the Contract or any substantial variation of
        the specification of the Ship (and for the purpose of this paragraph any
        extras, additions or alterations which the Buyer may desire to effect in
        the building of the Ship shall be deemed to constitute a substantial
        change if the cost thereof (which shall in every case be agreed in
        writing between the Buyer and the Builders before the work is put in
        hand irrespective of whether the prior consent thereto of the Bank be
        required hereunder) or if the aggregate cost of the proposed work
        together with the cost of any work already ordered, will alter the fixed
        price of the Ship (namely Sixty million two hundred thousand Dollars
        ($60,200,000)) by an amount greater than two per cent (2%) of the said
        fixed price) or release the Builders or either of them from any of their
        respective obligations under the Contract or waive any breach of the
        Builders' obligations thereunder or consent to any such act or omission
        of the Builders or either of them as would otherwise constitute such
        breach;

3.2.6   Delays

        without prejudice to sub-paragraph 3.2.5, agree to any variation of the
        Contract or the specification of the Ship which would delay the time for
        delivery of the Ship; and

3.2.7   Rejection and cancellation

        either exercise or fail to exercise any right which the Buyer may have
        to reject the Ship or cancel or rescind or otherwise terminate the
        Contract provided always that any such rejection of the Ship or
        cancellation, rescission or other termination of the Contract by the
        Buyer after such consent is given shall be without responsibility on the
        part of the Bank who shall be under no liability whatsoever to the
        extent that such rejection, rescission, cancellation or termination is
        thereafter adjudged to constitute a repudiation or other breach of the
        Contract by the Buyer.

        4 Continuing security and other matters

4.1   it is declared and agreed that.

4.1.1   Continuing security

        the security created by this Deed shall be held by the Bank as a
        continuing security for the payment of the Outstanding Indebtedness and
        the performance and observance of and compliance with all of the
        covenants, terms and conditions in the Security Documents contained,
        express or implied and that the security so created shall not be
        satisfied by any intermediate payment or satisfaction of any part of the
        amount hereby and thereby secured (or by any settlement of accounts
        between the Buyer or any other person who may be liable to the Bank in
        respect of the Outstanding indebtedness or any part thereof and the
        Bank);

4.1.2   Security additional

        the security so created shall be in addition to, and shall not in any
        way prejudice or affect and may be enforced by the Bank without prior
        recourse to the security created by any of the other Security Documents
        or by any deposit of documents, or any guarantee, lien, bill, note,
        mortgage or other security now or hereafter held by the Bank, or any
        right or remedy of the Bank thereunder and shall not in any way be
        prejudiced or affected thereby or by the invalidity or unenforceability
        thereof, or by the Bank releasing, modifying or refraining from
        perfecting or enforcing any of the same, or granting time or Indulgence
        or compounding with any person Iiable;

4.1.3   Rights additional

        all the rights, remedies and powers vested in the Bank hereunder shall
        be an addition to, and not a limitation of, any and every other right,
        power or remedy vested in the Bank under the Agreement, this Deed, the
        other Security Documents or at law and that all the powers so vested in
        the Bank and/or the Bank may be exercised from time to time and as often
        as the Bank may deem expedient;

4.1.4   No enquiry

        the Bank shall not be obliged to make any enquiry as to the nature or
        sufficiency of any payment received by it under this Deed or to make any
        claim or take any action to collect any moneys hereby assigned or to
        enforce any rights or benefits hereby assigned to the Bank or to which
        the Bank may at any time be entitled under this Deed; and

4.1.5   No liability

        the Buyer shall remain liable to perform all the obligations assumed by
        it in relation to the Assigned Property and the Bank shall be under no
        obligation of any kind whatsoever in respect thereof or be under any
        liability whatsoever in the event of any failure by the Buyer to perform
        its obligations in respect thereof.

5     Powers of the Bank

5.1   Protective action

      The Bank shall, without prejudice to its other rights, powers and remedies
      hereunder or under any of the other Security Documents, be entitled (but
      not bound) at any time, and as often as may be necessary, to take any such
      action as it may in its discretion think fit for the purpose of protecting
      or maintaining the security created by this Deed and all Expenses
      attributable thereto shall be payable by the Buyer on demand.

5.2   Remedy of defaults

      Without prejudice to the provisions of clause 5.1 or the generality of the
      powers and remedies vested in the Bank by virtue of the assignment herein
      contained, upon the happening of any Event of Default (whether or not the
      Bank shall have given any notice in accordance with the provisions of
      clause 10.2 of the Agreement), the Bank shall become forthwith entitled,
      as and when it may see fit, to exercise in relation to the Assigned
      Property or any part thereof all or any of the rights, powers and remedies
      possessed by it as assignee of the Assigned Property (whether at law, by
      virtue of this Deed or otherwise) and in particular (without limiting the
      generality of the foregoing):

5.2.1   to implement the Contract and take delivery and possession of the Ship
        as the Bank may see fit;

5.2.2   to agree with the Builders to determine the Contract on such terms and
        conditions as the Bank and the Builders may mutually agree;

5.2.3   to assign all the Assigned Property or to sell the Ship on or after its
        delivery under the Contract or otherwise and upon such terms (including
        free of or subject to any charter) as the Bank shall in its absolute
        discretion determine and with power, where the Bank purchases the Ship
        and/or takes an assignment of the Assigned Property, to make payment of
        the price by making an equivalent reduction in the amount of the
        Outstanding Indebtedness in the manner referred to in clause 6.1;

5.2.4   to undertake the further supervision of the construction of the Ship;

5.2.5   to collect, recover, compromise and give a good discharge for all claims
        then outstanding or thereafter arising in respect of the Assigned
        Property or any part thereof and moneys payable to the Buyer or any
        damages recoverable by the Buyer under the Assigned Documents in
        connection therewith and to take over or institute (if necessary using
        the name of the Buyer) all such proceedings in connection therewith as
        the Bank in its absolute discretion thinks fit;

5.2.6   to implement any Refund Guarantee and to agree with the Refund Guarantor
        any compromise of the obligations of the Refund Guarantor or grant any
        release or discharge of the Refund Guarantor;

5.2.7   following delivery of the Ship to manage, insure, maintain and repair
        the Ship and to employ, sail or lay up the Ship in such manner and for
        such period as the Bank, in its absolute discretion, deems expedient,
        accounting only for net profits arising from any such employment; and

5.2.8   to recover from the Buyer on demand all Expenses incurred or paid by the
        Bank in connection with the exercise of the powers (or any of them)
        referred to in this clause 5.2.

5.3   Event of Default

      At any time after the happening of any Event of Default (whether or not
      the Bank shall have given any notice in accordance with the provisions of
      clause 10.2 of the Agreement), the Bank shall be entitled to exercise its
      powers of assignment and sale hereunder in such manner and at such times
      as the Bank in its absolute discretion may determine and the Bank shall
      not in any circumstances be answerable for any loss occasioned by such
      sale or resulting from postponement thereof.

5.4   No enquiry by purchaser

      Upon any assignment or sale of the Contract and/or the Ship or any share
      therein or part thereof pursuant to this Deed the purchaser shall not be
      bound to see or enquire whether the Bank's power of assignment or sale has
      arisen and the assignment or sale shall be deemed to be within the power
      of the Bank and the receipt of the Bank for the purchase money shall
      effectively discharge the purchaser who shall not be concerned with the
      manner of application of the proceeds of sale or be in any way answerable
      therefor.

5.5   Bank's rights

      The Buyer covenants and undertakes with the Bank to do or permit to be
      done each and every act or thing which the Bank may from time to time
      require to be done for the purpose of enforcing the Bank's rights under
      this Deed and to allow its name to be used as and when required by the
      Bank for that purpose.

6     Application of moneys

6.1   Application

      All moneys received by the Bank in respect of:

6.1.1   any payment under any Refund Guarantee;

6.1.2   from the Builders or either of them under the Contract (including sums
        arising from any arbitration award);

6.1.3   the assignment, sale or other disposal of the Assigned Property or the
        Ship on enforcement of its rights hereunder;

6.1.4   (if the Ship is delivered to the Bank (or its nominee)) freights and
        other earnings of the Ship until the sale or toss of the Ship after such
        delivery;

6.1.5   the determination, cancellation or rescission or other termination of
        the Contract;

6.1.6   such collections, recoveries or compromises as are referred to in clause
        5.2.5; or

6.1.7   otherwise in respect of the Assigned Property, shall be held by it upon
        trust in the first place to pay or make good the Expenses and the
        balance shall be paid over to the Bank for application by the Bank in
        the manner specified in clause 13.1 of the Agreement.

6.2   Shortfall

      In the event that on application in accordance with clause 6.1, the moneys
      so applied are insufficient to pay in full the whole of the Outstanding
      Indebtedness, the Bank shall be entitled to collect the shortfall from the
      Buyer or any other person Fable for the time being therefor.

7     Remedies cumulative and other provisions

7.1   No waiver

      No failure or delay on the part of the Bank to exercise any right, power
      or remedy vested in it under the Security Documents or any of them shall
      operate as a waiver thereof, nor shall any single or partial exercise by
      the Bank of any right, power or remedy nor the discontinuance, abandonment
      or adverse determination of any proceedings taken by the Bank to enforce
      any right, power or remedy preclude any other or further exercise thereof
      or proceedings to enforce the same or the exercise of any other right,
      power or remedy. Nor shall the giving by the Bank of any consent to any
      act which by the terms of this Deed requires such consent prejudice the
      right of the Bank to withhold or give consent to the doing of any other
      similar act. The remedies provided in the Security Documents are
      cumulative and are not exclusive of any remedies provided by law

7.2   Delegation

      The Bank shall be entitled, at any time and as often as may be expedient,
      to delegate all or any of the powers and discretions vested in it by this
      Deed (including the power vested in it by virtue of clause 9) in such
      manner, upon such terms and to such persons as the Bank in its absolute
      discretion may think fit.

7.3   Bank as assignee

      The Bank shall be entitled to do all acts and things incidental or
      conducive to the exercise of any of the rights, powers or remedies
      possessed by it as assignee of the Assigned Property (whether at law,
      under this Deed or otherwise).

8     Costs and indemnity

8.1   Costs

      The Buyer shall pay to the Bank on demand on a full indemnity basis all
      expenses or liabilities of whatsoever nature (including legal fees, fees
      of insurance advisers, printing, out-of-pocket expenses, stamp duties,
      registration fees and other duties or charges (together with any value
      added tax or similar tax payable in respect thereof)) incurred by the Bank
      in connection with the enforcement of, or preservation of any rights
      under, this Deed or otherwise in respect of the Outstanding Indebtedness
      and the security therefor or in connection with the preparation,
      completion, execution or registration of this Deed.

8.2   Indemnity

      The Buyer hereby agrees and undertakes to indemnify the Bank against all
      losses, actions, claims, expenses, demands, obligations and liabilities
      whatsoever and whensoever arising which may now or hereafter be incurred
      by or threatened or brought against it, or incurred by any manager, agent,
      officer or employee for whose liability, act or omission the Bank may be
      answerable in respect of, in relation to, or in connection with, anything
      done or omitted in the exercise of, or purported exercise of, the powers
      contained in this Deed or the implementation of the Assigned Documents, or
      in respect of the design, construction, equipment or use or operation of
      the Ship or otherwise in connection herewith or with any part of the
      Assigned Property or otherwise howsoever in relation to, or in connection
      with, any of the matters dealt with in any of the Security Documents.

9     Attorney

9.1   Power of attorney

      By way of security, the Buyer hereby irrevocably appoints the Bank to be
      its attorney generally for and in the name and on behalf of the Buyer and
      as the act and deed or otherwise of the Buyer to execute, seal and deliver
      and otherwise perfect and do all such deeds, assurances, agreements,
      instruments, acts and things including, without prejudice to the
      generality of the foregoing, to ask, require, demand (including submitting
      a demand under any Refund Guarantee), receive, compound and give
      acquittance for any and all moneys and claims for moneys due and to become
      due under or arising out of any of the Assigned Documents including all
      amounts already paid by the Buyer to the Builders pursuant to the
      Contract, to endorse any cheques or other instruments or orders in
      connection therewith and to file any claims or take any action or
      institute any proceedings which to the Bank may seem to be necessary or
      advisable to execute and deliver a bill of sale of the Ship and generally
      to do any and all such things as the Buyer itself could do in relation to
      the property hereby assigned which may be required for the full exercise
      of all or any of the rights, powers or remedies conferred hereby or which
      may be deemed proper in or in connection with all or any of the purposes
      aforesaid. The power hereby conferred shall be a general power of attorney
      under the Powers of Attorney Act 1971, and the Buyer ratifies and
      confirms, and agrees to ratify and confirm, any deed, assurance,
      agreement, instrument, act or thing which the Bank may execute or do
      pursuant thereto Provided always that such power shall not be exercisable
      by or on behalf of the Bank until the happening of any Default.

9.2   Dealings with attorneys

      The exercise of such power by or on behalf of the Bank shall not put any
      person dealing with the Bank upon any enquiry as to whether any Default
      has happened, nor shall such person be in any way affected by notice that
      no such event has happened, and the exercise by the Bank of such power
      shall be conclusive evidence of its or his right to exercise the same.

9.3   Filings

      The Buyer hereby irrevocably appoints the Bank to be its attorney in the
      name and on behalf of the Buyer and as the act and deed or otherwise of
      the Buyer to agree the form of and to do and execute all deeds,
      instruments, acts and things to file, record, register or enrol this Deed
      which the Bank may in its discretion consider necessary or advisable, now
      or in the future, to ensure the legality, validity, enforceability or
      admissibility in evidence hereof.

10    Further assurance

      The Buyer hereby further undertakes at its own expense from time to time
      to execute, sign, perfect, do and (if required) register every such
      further assurance, document, act or thing as in the opinion of the Bank
      may be necessary or desirable for the purpose of more effectually
      assigning the Assigned Property or perfecting the security constituted or
      intended to be constituted by this Deed.

11    Assignment

      Subject to clause 5, the provisions of clause 15 of the Agreement shall
      apply mutatis mutandis in respect of any assignment of rights or transfer
      of obligations under this Deed and the rights of each of the Buyer and the
      Bank to effect any assignment of rights or transfer of obligations under
      this Deed.

12    Notices

      The provisions of clause 16.1 of the Agreement shall apply mutatis
      mutandis in respect of any certificate, notice, demand or other
      communication given or made under this Deed.

13    Law and jurisdiction

13.1  Law

      This Deed is governed by, and shall be construed in accordance with,
      English law.

13.2  Submission to jurisdiction

      For the benefit of the Bank, the Buyer irrevocably agrees that any legal
      action or proceedings arising out of or in connection with this Deed
      against the Buyer or any of its assets may be brought in the English
      courts or in the courts of any other jurisdiction chosen by the Bank, each
      of which shall have jurisdiction to settle any disputes arising out of or
      in connection with this Deed. The Buyer irrevocably and unconditionally
      submits to the jurisdiction of such courts, and irrevocably designates,
      appoints and empowers Nicolaou & Co. Chartered Accountants at present of
      25 Heath Drive, Potters Bar, Herts, EN6 1 EN, England to receive, for it
      and on its behalf, service of process issued out of the English courts in
      any such legal action or proceedings. The submission to such jurisdiction
      shall not (and shall not be construed so as to) limit the right of the
      Bank to take proceedings against the Buyer in any other court of competent
      jurisdiction nor shall the taking of proceedings by the Bank in any one or
      more jurisdictions preclude the taking of proceedings by the Bank in any
      other jurisdiction, whether concurrently or not.

      The parties further agree that only the courts of England and not those of
      any other State shall have jurisdiction to determine any claim which the
      Buyer may have against the Bank arising out of or in connection with this
      Deed.

13.3  Contracts (Rights of Third Parties) Act 1999

      No term of this Deed is enforceable under the provisions of the Contracts
      (Rights of Third Parties) Act 1999 by a person who is not a party to this
      Deed.

IN WITNESS whereof this Deed has been duly executed by way of deed the day and
year first above written.



                                   Schedule I

          Form of notice of assignment of Contract and acknowledgement

To:  China Shipbuilding Trading Company, Limited
     56 (Yi) Zhongguancun
     Nan Da Jie
     Beijing 100 44
     The People's Republic of China

     Shanghai Waigaoqiao Shipbuilding Co., Ltd.
     3001 Zhouhai Road
     Pudong New District
     Shanghai, 200 137
     The People's Republic of China

                                                                      [|X|] 2006

Dear Sirs

Hull No. [H1107] [H1108] (the "Ship")

We refer to the shipbuilding contract and an addendum no. 1 thereto, each dated
30 March 2006 and made between [Equity Enterprises Corp,] [Loki Commercial S.A.]
(the "Original Buyer") as buyer and you, China Shipbuilding Trading Company,
Limited and Shanghai Waigaoqiao Shipbuilding Co., Ltd. (together the "Seller")
as sellers, as novated in favour of [Bikini] [Eniwetok} Shipping Company Inc.
(the "Buyer") and the Seller by a novation agreement dated 13 September 2006
made between the Original Buyer, the Seller and the Buyer, as the same may be
further amended and supplemented from time to time (together the "Contract"),
whereby you agreed to design, build, launch, equip, complete, sell and deliver
to us after completion and successful trials one 177,000 dwt steel-hulled,
single-screw, diesel-driven bulk carrier currently known as Hull No. [H1107]
[H1108] and we agreed to purchase and take delivery of the same.

NOW WE HEREBY GIVE YOU NOTICE:

1    that by a deed of assignment dated [|X|] 2006 (the "Assignment") and made
     between ourselves and Fortis Bank (the "Bank") of 166 Syngrou Avenue, 176
     71 Athens, Greece, we have assigned to the Bank all our beneficial
     interests and all our benefits, right and title in, to and under the
     Contract but we continue to be responsible to you for performance of our
     obligations thereunder;

2    that you are irrevocably authorised and instructed:

     (a)  to hold the Ship to the order and at the disposal of the Bank (subject
          only to your lien as builders for moneys due to you under the
          Contract);

     (b)  to hold the builder's certificate and any other document of title to
          the Ship to the order and at the disposal of the Bank (subject only to
          your lien as builder for moneys due to you under the Contract); and

     (c)  to pay to the Bank all sums which you may become due to pay to us
          under the Contract (including sums arising from an arbitration award);
          and

3    that the Assignment includes provisions that:

     (a)  we will not (without the previous consent in writing of the Bank (and
          then only subject to such conditions as the Bank may impose)) (i)
          agree to any variation of the Contract or any substantial variation of
          the specification of the Ship or (ii) either exercise or fail to
          exercise any right which we may have to reject the Ship or cancel or
          rescind or otherwise terminate the Contract; and

     (b)  we shall remain liable to perform all our obligations under the
          Contract and the Bank shall be under no obligation of any kind in
          respect thereof.

The Bank has agreed that, until such time as it may give notice to the contrary,
we or any representative appointed by us pursuant to Article IV of the Contract
may continue to superintend the building of the Ship On such notice being given
the Bank may (inter al/a) exercise such right to superintend. This letter does
not of course affect your right to be paid by us for alterations, additions,
extra work and materials required or directed by us in accordance with the terms
of the Contract prior to such notice being given to you by the Bank.

The authority and instructions contained in this letter cannot be revoked or
varied without the Bank's consent.

Please acknowledge receipt of this notice and confirm your agreement in relation
to the matters stated above by signing the enclosed acknowledgement and return
it direct to the Bank at the address shown, with a copy to us.

This Notice of Assignment is governed by, and shall be construed in accordance
with, English law.

Yours faithfully


________________________
Attorney-in-fact
For and on behalf of
[Bikini] [Eniwetok] Shipping Company Inc.


     Acknowledgement of and confirmation to Notice of Assignment of Contract

To:  Fortis Bank
     166 Syngrou Avenue 176 71
     Athens
     Greece

We acknowledge notice of the fact that [Bikini] [Eniwetok] Shipping Company Inc.
(the "Buyer") has by a deed of assignment dated [|X|] 2006 (the "Assignment")
assigned to you all its beneficial interest and all its benefits, right and
title in, to and under the shipbuilding contract and an addendum no. 1 thereto,
each dated 30 March 2006 and made between [Equity Enterprises Corp.] [Loki
Commercial S.A.], as buyer (the "Original Buyer") and us, China Shipbuilding
Trading Company, Limited and Shanghai Waigaoqiao Shipbuilding Co., Ltd. as
sellers (together the "Seiler"), as novated in favour of [Bikini) [Eniwetok]
Shipping Company Inc. (the "Buyer") and the Seller by a novation agreement dated
13 September 2006 made between the Original Buyer, the Seller and the Buyer and
as the same may be further amended and supplemented from time to time (together
the "Contract"), for the construction, sale and purchase of Hull No. [H1107]
[H1108] (the "Ship") but that, until such time as you may give us notice to the
contrary, the Buyer or any representative appointed by the Buyer pursuant to
Article IV of the Contract may continue to superintend the building of the Ship
and our right to be paid by the Buyer for alterations, additions, extra work and
materials required or directed by the Buyer in accordance with the terms of the
Contract prior to such notice being given by you shall not be affected.

In accordance with authority and instructions given to us by the Buyer which
cannot be revoked or varied without your consent, and in consideration of you
making available a guarantee facility to (inter alias) the Buyer and therefore
improving its financial condition, we hereby undertake:

1    to hold the Ship and the builder's certificate and any other documents of
     title to the Ship to your order and disposal free from any claim which we
     may have against the Buyer except our lien as builders in respect of money
     due to us under the Contract;

2    to pay to you all sums which we may become due to pay to the Buyer under
     the Contract including sums arising from an arbitration award;

3    that should default be made by the Buyer in the due payment of any
     instalment or instalments of the purchase price or should the Buyer commit
     any other default by reason whereof we claim a right to determine the
     Contract we shall forthwith give you notice in writing of such default; and

4    that before exercising any option or right accruing to us on any such
     default, we shall first give you the option (to be exercised within twenty
     one (21) days) of you, or your nominee, making good the default and
     assuming all the Buyer's liabilities under the Contract.

We confirm that we have received no notice of any other assignment, charge or
disposal by the Buyer of the Contract or the Ship.

This Acknowledgement and Undertaking is governed by, and shall be construed in
accordance with, English law.

Yours faithfully


_______________________
Attorney-in-fact
For and on behalf of
CHINA SHIPBUILDING TRADING COMPANY, LIMITED

Dated:                      2006



_______________________
Attorney-in-fact
For and on behalf of
SHANGHAI WAIGAOQIAO SHIPBUILDING CO., LTD.

Dated:                      2006


                                   Schedule 2
      Form of notice of assignment of Refund Guarantee and acknowledgement

To:  [o]

                                                                        [o] 2006

Dear Sirs

We refer to the letter of guarantee dated [|X|] 2006 no. [o] (the "Refund
Guarantee") issued by you in respect of the refund obligations of China
Shipbuilding Trading Company, Limited and Shanghai Waigaoqiao Shipbuilding Co.,
Ltd. (together the "Seller') under a shipbuilding contract and an addendum no. 1
thereto, each dated 30 March 2006 between the Seller as sellers and [Equity
Enterprises Corp.) [Loki Commercial S.A.] as buyer (the "Original Buyer") and as
novated in favour of [Bikini] [Eniwetok] Shipping Company Inc. (the "Buyer") and
the Setter by a novation agreement dated 13 September 2006 made between the
Buyer, the Original Buyer and the Seller and as may be further amended and
supplemented from time to time (together the "Contract"), for the construction,
sale and purchase of Hull No. [H1107] [H1108] (the' Ship").

NOW WE HEREBY GIVE YOU NOTICE:

1    that by a deed of assignment dated [o] 2006 (the "Assignment") and made
     between ourselves and Fortis Bank (the "Bank") of 166 Syngrou Avenue, 176
     71 Athens, Greece, we have assigned to the Bank all our beneficial interest
     and all our benefits, right and title in, to and under the Refund Guarantee
     and in all moneys payable by you to us under the Refund Guarantee
     (including but without prejudice to the generality of the foregoing all
     claims for damages in respect of any breach by you of the Refund
     Guarantee);

2    that you are hereby irrevocably authorised and instructed to hold the
     Refund Guarantee to the order and at the disposal of the Bank and to pay to
     the Bank all sums which you may become due to pay to us under the Refund
     Guarantee; and

3    that the Assignment includes provisions that we will not, without the
     previous consent in writing of the Bank (and then only subject to such
     conditions as the Bank may impose) agree to any variation (except extending
     the validity) of the Refund Guarantee or release you from any of your
     obligations thereunder or waive any breach of your obligations thereunder
     or consent to any such act or omission as would otherwise constitute such
     breach.

The authority and instructions contained in this letter cannot be revoked or
varied without the Bank's consent.

Please acknowledge receipt of this notice and confirm your agreement in relation
to the matters stated above and that the Refund Guarantee remains in full force
and effect by signing the acknowledgement endorsed on the enclosed duplicate of
this notice and returning that duplicate direct to the Bank at the address
shown, with a copy to us.

This Notice of Assignment is governed by, and shall be construed in accordance
with, English law.

Yours faithfully



_______________________________
Attorney-in-fact
For and on behalf of
[BIKINI] [ENIWETOK] SHIPPING COMPANY INC.


           Acknowledgement of and confirmation to Notice of Assignment
                               of Refund Guarantee

[on duplicate]

To:  Fortis Bank
     166 Syngrou Avenue 176 71 Athens
     Greece

We hereby acknowledge receipt of the notice above and agree to act in accordance
with the authority and instructions given to us in that notice.

We confirm that we have received no notice of any other assignment, charge or
disposal by the Buyer of the Refund Guarantee.

In particular, we hereby represent and warrant that we have obtained the full
approval of the foreign exchange authority, China State Administration of
Foreign Exchange ("SAFE"), to issue the Refund Guarantee and we hereby undertake
to comply with the relevant PRC foreign security regulations and complete, when
necessary, the requisite recordation/approval formalities with the relevant
foreign exchange authority, i.e. SAFE, and other relevant authorities to
maintain the Refund Guarantee and the assignment of the Refund Guarantee as
fully valid, effective and enforceable against us as far as PRC foreign exchange
regulations are concerned.

This acknowledgement is governed by, and shall be construed in accordance with,
English law.



_____________________






_____________________
For and on behalf of
[o]

Dated:                    2006


EXECUTED as a DEED                              )
by                                              )
for and on behalf of                            )
[BIKINI] [ENIWETOK] SHIPPING COMPANY INC.       )     ________________
 in the presence of:                            )     Attorney-in-Fact



_________________________
Witness
Name:
Address:
Occupation:

EXECUTED as a DEED                              )     ____________________
by                                              )     Authorised signatory
and by                                          )
for and on behalf of                            )     ____________________
FORTIS BANK                                     )     Authorised signatory
in the presence of:                             )



_________________________
Witness
Name:
Address:
Occupation:

SIGNED by Simeon Palios                         )
for and on behalf of                            )     -----------------
BIKINI SHIPPING COMPANY INC.                    )     Attorney-in-Fact



SIGNED by Simeon Palios                         )
for and on behalf of                            )    -----------------
FORTIS BANK                                     )    Attorney-in-Fact




SIGNED by George Arcadis                        )    --------------------
and by Dimitrios Christabopoulos                )    Authorised signatory
for and on behalf of                            )
FORTIS BANK                                     )    --------------------
                                                     Authorised signatory




                                   SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                               DIANA SHIPPING INC.
                                  (registrant)


Dated:  December 13, 2006                 By: /s/ Anastassis Margaronis
                                              --------------------------
                                              Anastassis Margaronis
                                              President








SK 23159 0002 730272