<PAGE>


                             DATED 22 SEPTEMBER 2000

                         STOLT COMEX SEAWAY FINANCE B.V.
                                  (as borrower)

                                     - and -

                               STOLT OFFSHORE S.A.
                                 (as guarantor)

                                     - and -

                               DEN NORSKE BANK ASA
                         BANC OF AMERICA SECURITIES LLC,
                     SALOMON BROTHERS INTERNATIONAL LIMITED
                                HSBC BANK PLC and
                                 ING BARINGS LLC
                               (as lead arrangers)

                                     - and -

                               DEN NORSKE BANK ASA
                                   and others
                                   (as banks)

                                     - and -

                               DEN NORSKE BANK ASA
                    (as facility agent and security trustee)

                                     - and -

                              BANK OF AMERICA N.A.
                                  CITIBANK N.A.
                                   and others
                 (as syndication agents and joint book managers)

                                     - and -

                                 ING BARINGS LLC
                            (as documentation agent)

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

                             US$440,000,000 SECURED
                          MULTI-CURRENCY REVOLVING LOAN
                               FACILITY AGREEMENT

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

<PAGE>

                                    CONTENTS

                                                                            Page

1     Definitions and Interpretation...........................................2

2     The Facility and its Purpose............................................20

3     Conditions Precedent and Subsequent.....................................24

4     Representations and Warranties..........................................29

5     Currency................................................................33

6     Repayment and Prepayment................................................34

7     Interest................................................................36

8     Guarantee and Indemnity.................................................37

9     Fees....................................................................42

10    Security Documents......................................................43

11    Agency and Trust........................................................43

12    Covenants...............................................................54

13    Earnings................................................................66

14    Events Of Default.......................................................66

15    Set-Off and Lien........................................................71

16    Assignment and Sub-Participation........................................72

17    Payments, Mandatory Prepayment, Reserve Requirements and Illegality.....74

18    Communications..........................................................80

19    General Indemnities.....................................................81

20    Miscellaneous...........................................................83

21    Law and Jurisdiction....................................................88

SCHEDULE 1....................................................................89
        The Banks, the Commitments and the Proportionate Shares...............89
<PAGE>

SCHEDULE 2....................................................................93
        Lead Arrangers........................................................93

SCHEDULE 3....................................................................94
        Syndication Agents and Joint Book Managers............................94

SCHEDULE 4....................................................................95
        The Shipowning Guarantors and the Vessels.............................95

SCHEDULE 5....................................................................97

SCHEDULE 6....................................................................99
        Form of Transfer Certificate..........................................99

APPENDIX A...................................................................107

APPENDIX B...................................................................108

APPENDIX C...................................................................109

<PAGE>

LOAN FACILITY AGREEMENT

Dated: 22 September 2000

BETWEEN:-

(1)   STOLT COMEX SEAWAY FINANCE B.V. which is a company incorporated according
      to the law of The Netherlands with its registered office at Abel
      Tasmanstraat 81, 3165 Am Rotterdam, Albrands, The Netherlands (the
      "Borrower"); and

(2)   STOLT OFFSHORE S.A. which is a company incorporated according to the law
      of Luxembourg with its registered office at 26 rue Louvigny L-1946
      Luxembourg (the "Guarantor"); and

(3)   the banks and financial institutions listed in Schedule 1, each acting
      through its office at the address indicated against its name in Schedule 1
      (together "the Banks" and each a "Bank"); and

(4)   DEN NORSKE BANK ASA, acting as facility agent and security trustee through
      its office at 200 Park Avenue, New York, New York 10166-0396, United
      States of America (in that capacity "the Agent"); and

(5)   the banks and financial institutions listed in Schedule 2, each acting as
      a lead arranger through its office at the address indicated against its
      name in Schedule 2 (together in that capacity "the Arrangers" and each an
      "Arranger"); and

(6)   the banks and financial institutions listed in Schedule 3, each acting as
      a syndication agent and joint book manager through its office at the
      address indicated against its name in Schedule 3 (together in that
      capacity "the Syndication Agents" and each a "Syndication Agent"); and

(7)   ING BARINGS LLC as documentation agent through its office at 55 East 52nd
      Street, New York, New York 10055 (in that capacity the "Documentation
      Agent").
<PAGE>

WHEREAS:-

(A)   Each of the Vessels is registered in the name and ownership of her
      Shipowning Guarantor under the flag of the country as indicated in
      Schedule 4.

(B)   Each of the Banks has agreed to advance to the Borrower its respective
      Commitment of an aggregate principal amount not exceeding four hundred and
      forty million Dollars ($440,000,000) or the Equivalent Amount in a
      Permitted Currency or Permitted Currencies (as appropriate) in order to
      assist the Borrower in providing for the re-financing of the Existing
      Loans in full and with working capital for the Borrower and members of the
      SO Group and for other general corporate purposes. It is specifically
      agreed that at least the lower of fifty five million Dollars ($55,000,000)
      and one eighth (1/8) of the Facility Outstandings at any time during the
      Facility Period shall be lent by the Borrower to its parent company, Stolt
      Offshore A/S.

IT IS AGREED as follows:-

1     Definitions and Interpretation

      1.1   Definitions

            In this Agreement:-

          1.1.1   "the Address for Service" means c/o Stolt Offshore M.S.
                  Limited of 1st Floor, Dolphin House, Windmill Road,
                  Sunbury-on-Thames, Middlesex TW16 7HT, England or, in relation
                  to any of the Security Parties, such other address in England
                  and Wales as that Security Party may from time to time
                  designate by no fewer than ten Business Days' written notice
                  to the Agent.

          1.1.2   "Additional Permitted Indebtedness" has the meaning ascribed
                  to it in Clause 12.3.1(e).

          1.1.3   "the Additional Rate" means the cost imputed to the Banks of
                  compliance with:


                                       2
<PAGE>

                  (a)   the mandatory liquid asset requirements of the Bank of
                        England and/or the banking supervision or other costs
                        imposed by the Financial Services Authority, as
                        determined in accordance with Appendix C; and

                  (b)   any other applicable regulatory or central bank
                        requirement (including any requirement of the European
                        Central Bank) relating to any amount advanced under this
                        Agreement by a Bank through a branch in a state being
                        one of the participating countries which at the relevant
                        time shall have entered into economic and monetary union
                        (as a result of the legislative measures contemplated by
                        the Treaty of Rome of 25 March 1957, as amended from
                        time to time).

          1.1.4   "the Administration" has the meaning given to it in paragraph
                  1.1.3 of the ISM Code.

          1.1.5   the "Advance Date", in relation to any Drawing, means the date
                  on which that Drawing is advanced by the Banks to the Borrower
                  pursuant to Clause 2.

          1.1.6   "the Assignments" means the deeds of assignment of the
                  Insurances, Earnings and Requisition Compensation in respect
                  of each Vessel referred to in Clause 10.2 (each an
                  "Assignment").

          1.1.7   "the Borrower's Obligations" means all of the liabilities and
                  obligations of the Borrower to the Finance Parties under or
                  pursuant to the Borrower's Security Documents, whether actual
                  or contingent, present or future, and whether incurred alone
                  or jointly or jointly and severally with any other and in
                  whatever currency, including (without limitation) interest,
                  commission and all other charges and expenses.

          1.1.8   "the Borrower's Security Documents" means those of the
                  Security Documents to which the Borrower is or is to be a
                  party.


                                       3
<PAGE>

          1.1.9   "Break Costs" means all documented costs, losses, premiums or
                  penalties incurred by any of the Finance Parties in the
                  circumstances contemplated by Clause 19.4 or as a result of
                  any of them receiving any prepayment of all or any part of the
                  Facility (whether pursuant to Clause 6.2 or otherwise) or any
                  other payment under or in relation to the Security Documents
                  on a day other than the due date for payment of the sum in
                  question, and includes (without limitation) any losses or
                  costs incurred in liquidating or re-employing deposits from
                  third parties acquired to effect or maintain the Facility, and
                  any liabilities, expenses or losses incurred by any of the
                  Finance Parties in terminating or reversing, or otherwise in
                  connection with, any interest rate and/or currency swap,
                  transaction or arrangement entered into by any of the Finance
                  Parties to hedge any exposure arising under this Agreement, or
                  in terminating or reversing, or otherwise in connection with,
                  any open position arising under this Agreement.

          1.1.10  "Business Day" means (a) a day on which banks are open for the
                  transaction of business of the nature contemplated by this
                  Agreement (and not authorised by law to close) in New York
                  City, United States of America; London, England; Frankfurt am
                  Main Germany; Oslo, Norway; and (b) in relation to the
                  determination of interest rates for euros only, a day on which
                  the Trans-European Automated Real Time Gross Settlement
                  Express System (TARGET) is operating.

          1.1.11  "Certificate of Compliance" means a certificate materially in
                  the form set forth in Schedule 5, signed by the finance
                  director or similar officer of the Guarantor.

          1.1.12  "Change of Control" means that SNSA shall cease, for any
                  reason whatsoever, to own or control directly or indirectly,
                  shares of the Guarantor representing at least 30% of all votes
                  capable of being represented in any shareholders' meeting of
                  the Guarantor or if any shareholder or group of shareholders
                  acting in concert outside SNSA at any time own or control,
                  directly or indirectly, more of the issued voting


                                       4
<PAGE>

                  shares determined, on a per vote basis, of the Guarantor than
                  those owned by SNSA.

          1.1.13  "Commitment" means, in relation to each Bank, the amount of
                  the Facility which that Bank agrees to advance to the Borrower
                  as its several liability as indicated against the name of that
                  Bank in Schedule 1, as reduced from time to time in accordance
                  with Clause 2.4.5, or, where the context permits, the amount
                  of the Facility advanced by that Bank and remaining
                  outstanding.

          1.1.14  "Commitment Commission" means the commitment commission to be
                  paid by the Borrower to the Agent pursuant to Clause 9.2.

          1.1.15a "Communication" means any notice, approval, demand, request or
                  other communication from one party to this Agreement to any
                  other party to this Agreement.

          1.1.16  "the Communications Address" means c/o Stolt Offshore M.S.
                  Limited of 1st Floor, Dolphin House, Windmill Road,
                  Sunbury-on-Thames, Middlesex TW16 7HT, England, fax no: +(44)
                  1932 773701 marked for the attention of Jolanne Le-Faye.

          1.1.17  "the Company" means, in relation to any Vessel and at any
                  given time, the company responsible for the Vessel's
                  compliance with the ISM Code pursuant to paragraph 1.1.2 of
                  the ISM Code.

          1.1.18  "Consolidated Debt" means for the Guarantor and its
                  Subsidiaries (on a consolidated basis) at any time, the
                  aggregate value of (i) notes payable (whether promissory notes
                  or otherwise), plus (ii) long-term debt (including current
                  portion of long-term debt), plus (iii) capitalised lease
                  obligations on behalf of third parties and all contingent
                  liabilities related to debt and capital lease obligations
                  which, according to US GAAP, are considered probable and
                  estimable, plus (iv) subordinated debt, less (v) the amount of
                  debt for which there is a restricted cash deposit which will
                  repay all or part of such financial debt obligation.


                                       5
<PAGE>

          1.1.19  "Consolidated Tangible Net Worth" means for the Guarantor and
                  its Subsidiaries (on a consolidated basis) at any time (a) the
                  sum, to the extent shown on the Guarantor's consolidated
                  balance sheet, of (i) the amount of issued and outstanding
                  share capital, less the cost of treasury shares, plus (ii) the
                  amount of surplus and retained earnings, less (b) intangible
                  assets as determined in accordance with US GAAP.

          1.1.20  "converted" means actually or notionally (as the case may
                  require) converted by the Agent, at the rate at which the
                  Agent, in accordance with its usual practice, is able in the
                  London Interbank market to purchase the Permitted Currency in
                  which the Facility or part thereof is then denominated with
                  the Permitted Currency in which the Facility or part thereof
                  is to be denominated, on the second Business Day before the
                  value date for that conversion pursuant to Clause 5, and the
                  words "convert" and "conversion" shall be interpreted
                  accordingly.

          1.1.21  "Currency of Account" means, in relation to any payment to be
                  made to a Finance Party pursuant to any of the Security
                  Documents, the currency in which that payment is required to
                  be made by the terms of the relevant Security Document.

          1.1.22  "the Deed of Covenants" means the deed of covenants referred
                  to in Clause 10.1.

          1.1.23  "Default Rate" means the rate which is the aggregate of (i)
                  one per centum (1%) per annum (ii) the applicable Margin,
                  above LIBOR and (iii) the Additional Rate.

          1.1.24  "DOC" means a valid Document of Compliance issued for the
                  Company by the Administration pursuant to paragraph 13.2 of
                  the ISM Code.

          1.1.25  "Dollars" and "$" each means available and freely transferable
                  and convertible funds in lawful currency of the United States
                  of America.


                                       6
<PAGE>

          1.1.26  "Drawdown Notice" means a notice complying with Clause 2.3.

          1.1.27  "Drawing" means a part (or, if requested and available, all)
                  of the Facility advanced by the Banks to the Borrower in
                  accordance with Clause 2.

          1.1.28  "Earnings", in relation to a Vessel, means all hires,
                  freights, pool income and other sums payable to or for the
                  account of a Shipowning Guarantor in respect of that Vessel
                  including (without limitation) all remuneration for salvage
                  and towage services, demurrage and detention moneys,
                  contributions in general average, compensation in respect of
                  any requisition for hire and damages and other payments
                  (whether awarded by any court or arbitral tribunal or by
                  agreement or otherwise) for breach, termination or variation
                  of any contract for the operation, employment or use of the
                  Vessel.

          1.1.29  "EBITDA" means the consolidated Earnings of the Guarantor and
                  its Subsidiaries before interest, Taxes, depreciation and
                  amortisation, at any time during the Facility Period as
                  determined in accordance with US GAAP, calculated on a pro
                  forma basis to include acquisitions.

          1.1.30  "Encumbrance" means any mortgage, charge, pledge, lien,
                  assignment, hypothecation, preferential right, option, title
                  retention or trust arrangement or any other agreement or
                  arrangement which, in any of the aforementioned instances, has
                  the effect of creating security.

          1.1.31  "Equivalent Amount" means the amount of any Permitted Currency
                  converted from the relevant amount of Dollars.

          1.1.32  "euro" means the currency of participating Member States of
                  the European Monetary Union, pursuant to Council Regulation
                  (EC) 974/98 of 3 May 1998, (as changed from time to time by
                  the European Communities).

          1.1.33  "Event of Default" means any of the events set out in Clause
                  14.2.


                                       7
<PAGE>

          1.1.34  "Execution Date" means the date on which this Agreement is
                  executed by each of the parties thereto.

          1.1.35  "the Existing Loans" means the aggregate total amount
                  outstanding under the Existing Loan Agreements on the
                  Execution Date.

          1.1.36  "Existing Loan Agreements" means together (i) the $125,000,000
                  revolving credit agreement dated 19 December 1997 made between
                  Seaway (UK) Ltd as borrower, Stolt Comex Seaway SA as
                  guarantor, (inter alios) Den norske Bank ASA and Midland Bank
                  plc as lenders, Midland Bank plc as facility agent and Den
                  norske Bank ASA as security agent, (ii) the $150,000,000
                  multi-currency revolving loan facility agreement dated 1 April
                  1999 made between (inter alios) the Borrower, the Guarantor
                  and the Banks (as defined therein) and (iii) the $150,000,000
                  revolving bridging loan facility agreement dated 4 February
                  2000 made between (inter alios) the Borrower, the Guarantor
                  and SNSA and the Banks (as defined therein).

          1.1.37  "Facility" means the multi-currency revolving credit facility
                  made available by the Banks to the Borrower pursuant to this
                  Agreement.

          1.1.38  "the Facility Outstandings" at any time means the total of all
                  Drawings made at that time, to the extent not reduced by
                  repayments, prepayments and voluntary reductions.

          1.1.39  "the Facility Period" means the period beginning on the
                  Execution Date and ending on the date when the whole of the
                  Indebtedness has been repaid in full and the Borrower has
                  ceased to be under any further actual or contingent liability
                  to the Finance Parties under or in connection with the
                  Security Documents.

          1.1.40  "Factoring Agreement" means the factoring agreement in
                  relation to the assignment of earnings contained in the
                  Assignment over mv "SEAWAY FALCON" to be made between the
                  Agent and Stolt Offshore A/S referred to in Clause 10.4.


                                       8
<PAGE>

          1.1.41  "the Fee Letters" means the letters and the summary of terms
                  from the Agent and/or the Arrangers as agreed and accepted by
                  the Borrower and the Guarantor setting out certain fees,
                  commissions and other sums payable by the Borrower in
                  connection with the Facility.

          1.1.42  "the Finance Parties" means the Banks, the Agent, the
                  Arrangers and the Syndication Agents.

          1.1.43  "First Reduction Date" means 31 August 2002.

          1.1.44  "French Francs" means available and freely transferable and
                  convertible funds in lawful currency of the Republic of
                  France.

          1.1.45  "the Guarantee" means the guarantee and indemnity of the
                  Guarantor contained in Clause 8.

          1.1.46  "the Guarantor's Liabilities" means all of the liabilities and
                  obligations of the Guarantor to the Finance Parties under or
                  pursuant to the Guarantee whether actual or contingent,
                  including (without limitation) Interest.

          1.1.47  "the Indebtedness" means the Facility Outstandings; all other
                  sums of any nature including costs (together with all interest
                  on any of those sums) which from time to time may be payable
                  by the Borrower to the Finance Parties pursuant to the
                  Security Documents; any damages payable as a result of any
                  breach by the Borrower of any of the Security Documents; and
                  any damages or other sums payable as a result of any of the
                  obligations of the Borrower under or pursuant to any of the
                  Security Documents being disclaimed by a liquidator or any
                  other person, or, where the context permits, the amount
                  thereof for the time being outstanding.

          1.1.48  an "Instructing Group" means any one or more Banks whose
                  combined Proportionate Shares exceed sixty six and two thirds
                  per centum (66 2/3%).


                                       9
<PAGE>

          1.1.49  "Insurances", in relation to a Vessel, means all policies and
                  contracts of insurance (including but not limited to hull and
                  machinery, all entries in protection and indemnity or war
                  risks associations) which are from time to time taken out or
                  entered into in respect of or in connection with that Vessel
                  or her increased value and (where the context permits) all
                  benefits thereof, including all claims of any nature and
                  returns of premium.

          1.1.50  "Interest" means interest at the Default Rate.

          1.1.51  "Interest Payment Date" means each date for the payment of
                  interest in accordance with Clause 7.

          1.1.52  "Interest Period" means each interest period selected by the
                  Borrower or agreed by the Agent pursuant to Clause 7.

          1.1.53  "the ISM Code" means the International Management Code for the
                  Safe Management of Ships and for Pollution Prevention, as
                  adopted by the Assembly of the International Maritime
                  Organisation on 4 November 1993 by resolution A.741 (18) and
                  incorporated on 19 May 1994 as chapter IX of the Safety of
                  Life at Sea Convention 1974.

          1.1.54  "law" means any law, statute, treaty, convention, regulation,
                  instrument or other subordinate legislation or other
                  legislative or quasi-legislative rule or measure, or any order
                  or decree of any government, judicial or public or other body
                  or authority, or any directive, code of practice, circular,
                  guidance note or other direction issued by any competent
                  authority or agency (whether or not having the force of law).

          1.1.55  "LIBOR" means the rate, rounded to the nearest four decimal
                  places downwards (if the digit displayed in the fifth decimal
                  place is 1, 2, 3 or 4) or upwards (if the digit displayed in
                  the fifth decimal place is 5, 6, 7, 8 or 9) displayed on the
                  telerate page 3750 or, as the case may be, 3740 (or such other
                  page or pages which replace(s) either such page for the
                  purposes of display offered rates of leading banks, for
                  deposits in the Currency of


                                       10
<PAGE>

                  Account of amounts equal to the amount of the relevant Drawing
                  for a period equal in length to the relevant Interest Period
                  or if there is no such display rate then available for the
                  Permitted Currency for an amount comparable to the Drawing,
                  the arithmetic mean (rounded upwards, if necessary, to the
                  nearest whole multiple of one-sixteenth per centum (1/16%)) of
                  the respective rates notified to the Agent by each of the
                  Reference Banks as the rate at which it is offered deposits in
                  the Currency of Account and for the required period by prime
                  banks in the London Interbank Market.

          1.1.56  "the Managers" means any member of the SO Group; and/or such
                  other commercial and/or technical managers of the Vessels
                  nominated by the Shipowning Guarantors as the Agent may in its
                  discretion approve.

          1.1.57  "Management Agreement" means, in relation to any Vessel which
                  is leased to a party outside the SO Group, the Management
                  Agreement made between the Managers and the relevant
                  Shipowning Guarantor.

          1.1.58  "Margin" based on the ratio of Consolidated Debt to EBITDA for
                  the preceding four fiscal quarters ("D/EBITDA") during the
                  Facility Period means:-

                  (i)   0.75% where D/EBITDA is less than 1;

                  (ii)  1.00% where D/EBITDA is equal to or greater than 1 but
                        less than 2;

                  (iii) 1.25% where D/EBITDA is equal to or greater than 2 but
                        less than 3;

                  (iv)  1.50% where D/EBITDA is equal to or greater than 3 but
                        less than 4; and

                  (v)   1.75% where D/EBITDA is equal to or greater than 4,

                  Provided however that each applicable Margin shall
                  automatically increase by fifty per cent (50%) in the event of
                  a Change of Control, unless such Change of Control is
                  acceptable to all the Banks. The Margin shall be calculated by
                  the Agent as of 28/29 February, 31 May, 31 August


                                       11
<PAGE>

                  and 30 November each year (each a "Margin Review Date")
                  commencing 31 August 2000 for the succeeding fiscal quarter
                  and shall be calculated based on the Consolidated Debt as of
                  the previous Margin Review Date over EBITDA for the four
                  fiscal quarters, the most recent of which shall have ended on
                  the previous Margin Review Date.

          1.1.59  "the Maximum Facility Amount" means the amount of the
                  aggregate Commitments (stated in Dollars) subject to any
                  reductions effected in accordance with Clauses 2.4, 6.6 and
                  17.8.

          1.1.60  "the Mortgagees' Insurances" means all policies and contracts
                  of mortgagees' interest insurance and any other insurance from
                  time to time taken out by the Agent on behalf of the Banks in
                  relation to the Vessels pursuant to this Agreement.

          1.1.61  "the Mortgages" means the first preferred and/or priority
                  mortgages referred to in Clause 10.1 (each a "Mortgage").

          1.1.62  "Norwegian Kroner" means available and freely transferable and
                  convertible funds in the lawful currency of the Kingdom of
                  Norway.

          1.1.63  "Original Dollar Amount" means, at any relevant time, the
                  amount of the Facility which would then have been outstanding
                  had the Facility at all times been denominated, drawn and
                  repaid wholly in Dollars in accordance with Clause 6.

          1.1.64  "Permitted Currency" means Dollars, the euro, each of the
                  lawful currencies of France (namely French Francs), Norway
                  (namely Norwegian Kroner), the United Kingdom (namely Pounds
                  Sterling) and any other eurocurrency provided that each such
                  currency selected by the Borrower is acceptable to the Banks
                  and is freely convertible, transferable and available to the
                  Banks in the London Interbank market and in respect of which
                  the Agent is at all material times able to ascertain LIBOR.


                                       12
<PAGE>

          1.1.65  "Permitted Indebtedness" means Short Term Permitted
                  Indebtedness, Subordinated Debt up to one hundred million
                  Dollars ($100,000,000) and Additional Permitted Indebtedness.

          1.1.66  "Permitted Liens" means (i) liens for salvage and any
                  Encumbrance which has the prior written approval of the Agent
                  acting upon the instructions of all the Banks, or (ii) any
                  Encumbrance arising either by operation of law or in the
                  ordinary course of the business of the relevant Security Party
                  which is discharged in the ordinary course of business but in
                  any event does not exist for more than sixty (60) days.

          1.1.67  "Potential Event of Default" means any event which, with the
                  giving of notice and/or the passage of time and/or the
                  satisfaction of any materiality test, would constitute an
                  Event of Default.

          1.1.68  "Pounds Sterling" means pounds sterling being the available
                  and freely transferable and convertible funds in the lawful
                  currency of the United Kingdom.

          1.1.69  "Principal Subsidiary" means any member of the SO Group having
                  total assets exceeding ten per cent (10%) of the consolidated
                  assets of the SO Group and/or having during the last four
                  fiscal quarters accounted for more than ten per cent (10%) of
                  the consolidated turnover of the SO Group.

          1.1.70  "Proceedings" means any suit, action or proceedings begun by
                  any of the Finance Parties arising out of or in connection
                  with the Security Documents.

          1.1.71  "Proportionate Share" means, for each Bank, the percentage
                  indicated against the name of that Bank in Schedule1, as
                  amended by any Transfer Certificate executed from time to
                  time.

          1.1.72  "Pro Rata Insurance Proceeds Amount" means, in respect of each
                  Vessel, a figure equal to (x) a fraction in which (i) the
                  numerator is the


                                       13
<PAGE>

                  amount of the insurance proceeds payable in respect of such
                  Vessel in the event of a Total Loss and (ii) the denominator
                  is the aggregate market value of all the Vessels (based on the
                  Valuations) multiplied by (y) the Maximum Facility Amount.

          1.1.73  "Reference Banks" means the Agent, HSBC Bank Plc and Bank of
                  America N.A.

          1.1.74  "Requisition Compensation", in relation to a Vessel, means all
                  compensation or other money which may from time to time be
                  payable to the relevant Shipowning Guarantor as a result of
                  the Vessel being requisitioned for title or in any other way
                  compulsorily acquired (other than by way of requisition for
                  hire).

          1.1.75  "Second Reduction Date" means 31 August 2003.

          1.1.76  "the Security Documents" means this Agreement, the Mortgages,
                  the Deed of Covenants, the Assignments, the Factoring
                  Agreement, the Shipowners' Guarantee, or (where the context
                  permits) any one or more of them, and any other agreement or
                  document which may at any time be executed by a member of the
                  SO Group as security for the payment of all or any part of the
                  Indebtedness.

          1.1.77  "Security Parties" means the Borrower, the Guarantor, the
                  Shipowning Guarantors and any other member of the SO Group who
                  may at any time during the Facility Period be liable for, or
                  provide security for, all or any part of the Indebtedness, and
                  "Security Party" means any one of them.

          1.1.78  "the Shipowners' Guarantee" means the joint and several
                  guarantee and indemnity of the Shipowning Guarantors referred
                  to in Clause 10.3.

          1.1.79  "the Shipowning Guarantors" means the companies listed in
                  Schedule 4, each of which is a company incorporated according
                  to the law of the country indicated against its name in
                  Schedule 4 with its registered office


                                       14
<PAGE>

                  and/or principal place of business at the address indicated
                  against its name in Schedule 4 (each "a Shipowning
                  Guarantor").

          1.1.80  "Short Term Permitted Indebtedness" means any indebtedness of
                  the SO Group (other than intercompany indebtedness of the SO
                  Group and/or the SNSA Group) incurred for working capital and
                  short term liquidity in an amount of up to seventy five
                  million Dollars ($75,000,000).

          1.1.81  "SMC" in relation to any Vessel, means a valid safety
                  management certificate issued for the Vessel by or on behalf
                  of the Administration pursuant to paragraph 13.4 of the ISM
                  Code.

          1.1.82  "SMS" in relation to any Vessel, means a safety management
                  system for the Vessel developed and implemented in accordance
                  with the ISM Code and including the functional requirements,
                  duties and obligations required by the ISM Code.

          1.1.83  "SNSA" means Stolt-Nielsen S.A. a company incorporated
                  according to the law of Luxembourg with its registered office
                  at 23 Avenue Monterey, L-2086 Luxembourg.

          1.1.84  "SNSA Group" means SNSA and its Subsidiaries.

          1.1.85  "SO Group" means the Guarantor and its Subsidiaries.

          1.1.86  "Subordinated Debt" means any debt from any member(s) of the
                  SNSA Group upon the terms contained in a Subordinated Loan
                  Agreement.

          1.1.87  "Subordinated Loan Agreement" means an agreement, approved by
                  the Banks in writing, which sets out the terms and conditions
                  upon which any Subordinated Debt is to be incurred and
                  subordinated to the Facility and includes, without limitation,
                  a prohibition on the repayment of principal of such
                  Subordinated Debt unless such Subordinated Debt is to be
                  replaced by equity.


                                       15
<PAGE>

          1.1.88  "Subsidiary" means a subsidiary undertaking, as defined in
                  section 258 Companies Act 1985 or any analogous definition
                  under any other relevant system of law.

          1.1.89  "Surety" means any person (other than the Borrower or the
                  Guarantor) who has given or who may in the future give to the
                  Finance Parties or any of them any security, guarantee or
                  indemnity for or in relation to the Borrower's Obligations.

          1.1.90  "Taxes" means all taxes, levies, imposts, duties, charges,
                  fees, deductions and withholdings (including any related
                  interest and penalties) and any restrictions or conditions
                  resulting in any charge, other than taxes on the overall net
                  income of a Finance Party or branch thereof, and "Tax" and
                  "Taxation" shall be interpreted accordingly.

          1.1.91  "the Termination Date" means the date falling five (5) years
                  after the Execution Date.

          1.1.92  "Total Loss", in relation to a Vessel means:-

                  (a)   an actual, constructive, arranged, agreed or compromised
                        total loss of that Vessel; or

                  (b)   the requisition for title, compulsory acquisition,
                        nationalisation or expropriation of that Vessel by or on
                        behalf of any government or other authority (other than
                        by way of requisition for hire); or

                  (c)   the capture, seizure, arrest, detention or confiscation
                        of that Vessel, unless the Vessel is released and
                        returned to the possession of the relevant Shipowning
                        Guarantor within two months after the capture, seizure,
                        arrest, detention or confiscation in question.

          1.1.93  "Transfer Certificate" means a certificate materially in the
                  form set forth in Schedule 6 signed by a Bank and a Transferee
                  whereby:


                                       16
<PAGE>

                  (a)   such Bank seeks to procure the transfer to such
                        Transferee of all or a part of such Bank's rights and
                        obligations under this Agreement upon and subject to the
                        terms and conditions set out in Clause 16; and

                  (b)   such Transferee undertakes to perform the obligations it
                        will assume as a result of delivery of such certificate
                        to the Agent as is contemplated in Clause 16.

          1.1.94  "Transfer Date" means, in relation to any Transfer
                  Certificate, the date for the making of the transfer specified
                  in the schedule to such Transfer Certificate.

          1.1.95  "Transferee" means a bank or other financial institution to
                  which a Bank seeks to transfer all or part of such Bank's
                  rights and obligations under this Agreement.

          1.1.96  "the Trust Property" means:-

                  (a)   the benefit of the covenant contained in Clause 10; and

                  (b)   all benefits arising under (including, without
                        limitation, all proceeds of the enforcement of) each of
                        the Security Documents (other than this Agreement), with
                        the exception of any benefits arising solely for the
                        benefit of the Agent).

          1.1.97  "US GAAP" means the generally accepted accounting principles
                  in the United States of America, from time to time in effect,
                  subject to any changes in the rules of US GAAP, consistently
                  applied always provided that if the Guarantor wishes to change
                  accounting principles within the applicable rules of US GAAP,
                  the Borrower shall notify the Agent of the intention together
                  with an explanation of the effects on the financial covenants
                  contained in this Agreement. Should the Banks, and/or the
                  Guarantor, find that such change will impact upon the result
                  of the


                                       17
<PAGE>

                  calculation of the financial covenants contained in this
                  Agreement, the Banks will, following consultation with the
                  Guarantor, stipulate amendments to the financial covenants so
                  that the ratio of SO Group's performance in respect of the
                  covenants reflects the position which would have been the case
                  had no changes to the Guarantor's accounting principles taken
                  place.

          1.1.98  "Valuation" means in relation to a Vessel, the arithmetic mean
                  of the written valuations of that Vessel expressed in Dollars
                  prepared by two firms of reputable independent shipbrokers,
                  one appointed by the Agent and the other appointed by the
                  Borrower, unless either the Agent or the Borrower disagrees
                  with such arithmetic average, in which event the two
                  shipbrokers shall appoint a third firm of reputable
                  independent shipbrokers and the valuation of the Vessel shall
                  be the arithmetic mean of all three such valuations. Such
                  valuations shall be prepared at the Borrower's expense,
                  without a physical inspection, on the basis of a sale for
                  prompt delivery for cash at arm's length between a willing
                  buyer and a willing seller without the benefit of any
                  charterparty or other engagement.

          1.1.99  "the Vessels" means the vessels listed in Schedule 4 and
                  everything now or in the future belonging to them on board and
                  ashore (each a "Vessel").

      1.2   Interpretation

            In this Agreement:-

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

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


                                       18
<PAGE>

          1.2.3   references to Recitals, Clauses, Schedules and Appendices are
                  references to recitals and clauses of, and schedules and
                  appendices to, this Agreement;

          1.2.4   references to this Agreement include the Recitals, the
                  Schedules and the Appendices;

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

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

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

          1.2.8   references to any of the Finance Parties include its
                  successors, Transferees and assignees; and

          1.2.9   references to times of day are to New York time.

      1.3   Joint and several liability

          1.3.1   All obligations, covenants, representations, warranties and
                  undertakings in or pursuant to the Security Documents assumed,
                  given, made or entered into by the Borrower and the Guarantor
                  shall, unless otherwise expressly provided, be assumed, given,
                  made or entered into by the Borrower and the Guarantor jointly
                  and severally.

          1.3.2   Each of the Borrower and the Guarantor agrees that any rights
                  which it may have at any time during the Facility Period by
                  reason of the


                                       19
<PAGE>

                  performance of its obligations under the Security Documents to
                  be indemnified by the other or by any Surety and/or to take
                  the benefit of any security taken by the Finance Parties
                  pursuant to the Security Documents shall be exercised in such
                  manner and on such terms as the Agent may require. Each of the
                  Borrower and the Guarantor agrees to hold any sums received by
                  it as a result of its having exercised any such right on trust
                  for the Agent (as agent for the Banks) absolutely.

          1.3.3   Each of the Borrower and the Guarantor agrees that it will not
                  at any time during the Facility Period claim any set-off or
                  counterclaim against the other or against any Surety in
                  respect of any liability owed to it by the other or by any
                  Surety under or in connection with the Security Documents, nor
                  prove in competition with any Finance Party in any liquidation
                  of (or analogous proceeding in respect of) the other or of any
                  Surety in respect of any payment made under the Security
                  Documents or in respect of any sum which includes the proceeds
                  of realisation of any security held by any of the Finance
                  Parties for the repayment of the Indebtedness.

2     The Facility and its Purpose

      2.1   Agreement to lend Subject to the terms and conditions of this
            Agreement, and in reliance on each of the representations and
            warranties made or to be made in or in accordance with each of the
            Security Documents, each of the Banks agrees to advance to the
            Borrower its Commitment of an aggregate principal amount not
            exceeding the Maximum Facility Amount to be used by the Borrower for
            the purposes referred to in Recital (B).

      2.2   Drawings Subject to satisfaction by the Borrower of the conditions
            set out in Clause 3.1 (in respect of the first Drawing), Clause 3.3
            (in respect of all subsequent Drawings), and subject to Clause 2.3,
            and provided that the maximum aggregate amount of the Facility
            Outstandings at any given time during the Facility Period shall not
            exceed the Maximum Facility Amount, each Drawing shall be advanced
            to the Borrower, in each case by the Agent transferring the amount
            of the Drawing to such account of the Borrower as the Borrower shall


                                       20
<PAGE>

            notify to the Agent in the relevant Drawdown Notice by such same day
            method of funds transfer as the Agent shall select.

      2.3   Advance of Drawings Each Drawing shall be advanced in Dollars, or in
            any other Permitted Currency selected in accordance with Clause 5.1.
            Each Drawing shall be advanced on a Business Day, provided that the
            Borrower shall have given to the Agent not more than ten and not
            fewer than four Business Days' notice in writing materially in the
            form set out in Appendix A of the required Advance Date of the
            Drawing in question. Each Drawdown Notice once given shall be
            irrevocable and shall constitute a warranty by the Borrower that:-

          2.3.1   all conditions precedent to the advance of the Drawing
                  requested in that Drawdown Notice will have been satisfied on
                  or before the Advance Date requested;

          2.3.2   no Event of Default or Potential Event of Default has occurred
                  or will then have occurred; and

          2.3.3   no Event of Default or Potential Event of Default will result
                  from the advance of the Drawing in question.

            The Agent shall promptly notify each Bank of the receipt of each
            Drawdown Notice, following which each Bank will make its
            Proportionate Share of the amount of the requested Drawing available
            to the Borrower through the Agent on the Advance Date requested.

      2.4   Facility Reduction

          2.4.1   The amount of the Facility available to the Borrower for
                  drawing under this Agreement shall be four hundred and forty
                  million Dollars ($440,000,000) or the Equivalent Amount in any
                  other Permitted Currency during the period from the Execution
                  Date until the First Reduction Date. On the First Reduction
                  Date the amount of the Facility available for drawing shall
                  reduce to three hundred and eighty five million Dollars
                  ($385,000,000). On the Second Reduction Date the amount of the


                                       21
<PAGE>

                  Facility available for drawing shall reduce to three hundred
                  and thirty million Dollars ($330,000,000). On the Termination
                  Date the Facility available shall be reduced to zero. The
                  mandatory reductions in the amount of the Facility available
                  for drawing required pursuant to this Clause will be made in
                  the amounts and at the times specified (subject to Clause
                  2.4.2) whether or not the Maximum Facility Amount is reduced
                  pursuant to Clause 2.4.3, Clause 6.6 or Clause 17.8.

          2.4.2   The Borrower may voluntarily reduce the Maximum Facility
                  Amount in whole or in part in multiples of two million Dollars
                  ($2,000,000), where applicable provided that it has first
                  given to the Agent not fewer than fourteen (14) days' prior
                  written notice expiring on a Business Day of its desire to
                  reduce the Maximum Facility Amount. Any such reduction in the
                  Maximum Facility Amount shall not be reversed. Any voluntary
                  reduction in the Maximum Facility Amount pursuant to this
                  Clause shall be applied to the remaining mandatory reductions
                  under Clause 2.4.1 on a pro rata basis.

          2.4.3   In the event of a sale or disposal of a Vessel (subject to the
                  penultimate sentence contained in Clause 12.2.21) the Maximum
                  Facility Amount shall reduce by an amount equal to the
                  proportion that a current Valuation for such Vessel bears to
                  the aggregate total amount of the current Valuations for the
                  remaining Vessels and the Vessel sold or disposed of pursuant
                  to this Clause.

          2.4.4   To the extent that repayments or prepayments made by the
                  Borrower to the Agent in accordance with this Agreement reduce
                  the Facility Outstandings to less than the Maximum Facility
                  Amount, the Borrower shall again be entitled to make Drawings
                  in accordance with and subject to the terms of this Agreement.

          2.4.5   Simultaneously with each reduction of the Maximum Facility
                  Amount in accordance with Clause 2.4.1, Clause 2.4.2 or Clause
                  2.4.3 (as the case may be), the Commitment of each Bank will
                  reduce so that the


                                       22
<PAGE>

                  Commitments of the Banks in respect of the reduced Maximum
                  Facility Amount remain in accordance with their respective
                  Proportionate Shares.

      2.5   Restrictions on Drawings The Borrower shall not be entitled to make
            more than three Drawings on any Business Day and no more than ten
            (10) Drawings may be outstanding at any one time during the Facility
            Period. Each Drawing shall be of an amount of not less than five
            million Dollars ($5,000,000) or the Equivalent Amount in any other
            Permitted Currency. If at any time during the Facility Period the
            Original Dollar Amount exceeds the Maximum Facility Amount then
            available or if a proposed Drawing when added to the Original Dollar
            Amount would result in the Maximum Facility Amount being exceeded
            then the Borrower shall immediately pay to the Agent on behalf of
            the Banks such amount as will ensure that the Original Dollar Amount
            is equal to or less than the Maximum Facility Amount then available.

      2.6   Termination Date No Bank shall be under any obligation to advance
            all or any part of its Commitment after the Termination Date.

      2.7   Several obligations The obligations of the Banks under this
            Agreement are several. The failure of a Bank to perform its
            obligations under this Agreement shall not affect the obligations of
            the Borrower to any Finance Party nor shall any Finance Party be
            liable for the failure of another Bank to perform any of its
            obligations under or in connection with this Agreement.

      2.8   Application of Facility Without prejudice to the obligations of the
            Borrower under this Agreement, no Finance Party shall be obliged to
            concern itself with the application of the Facility by the Borrower.

      2.9   Loan facility and control accounts The Agent will open and maintain
            such loan facility account or such other control accounts as the
            Agent shall in its discretion consider necessary or desirable in
            connection with the Facility.


                                       23
<PAGE>

3     Conditions Precedent and Subsequent

      3.1   Conditions Precedent - First Drawing Before any Bank shall have any
            obligation to advance the first Drawing under the Facility, the
            Borrower shall pay to the Agent the relevant fees referred to in
            Clause 9 and the Fee Letters and deliver or cause to be delivered to
            or to the order of the Agent the following documents and evidence:-

          3.1.1   Evidence of incorporation Such evidence as the Agent may
                  reasonably require that each Security Party was duly
                  incorporated in its country of incorporation and remains in
                  existence and, where appropriate, in good standing, with power
                  to enter into, and perform its obligations under, those of the
                  Security Documents to which it is, or is intended to be, a
                  party, including (without limitation) a copy, certified by a
                  director or an officer of the Security Party in question as
                  true, complete, accurate and unamended, of all documents
                  establishing or limiting the constitution of each Security
                  Party.

          3.1.2   Corporate authorities A copy, certified by a director or the
                  secretary of the Security Party in question as true, complete,
                  accurate and neither amended nor revoked, of a resolution of
                  the directors and (other than the Guarantor) a resolution of
                  the shareholders of each Security Party (together, where
                  appropriate, with signed waivers of notice of any directors'
                  or shareholders' meetings) approving, and authorising or
                  ratifying the execution of, those of the Security Documents
                  and each Drawdown Notice to which that Security Party is or is
                  intended to be a party and all matters incidental thereto.

            3.1.3 Officer's certificate A certificate (i) signed by a duly
                  authorised officer of each of the Security Parties setting out
                  the names of the directors, officers and (other than the
                  Guarantor) shareholders of that Security Party and (ii) issued
                  by each Security Party's company registry confirming due
                  incorporation and valid existence and (when such information
                  is maintained by the registry) the names of its directors and
                  shareholders.


                                       24
<PAGE>

            3.1.4 Power of attorney The power of attorney (notarially attested
                  and legalised, if necessary, for registration purposes) of
                  each of the Security Parties under which any documents are to
                  be executed or transactions undertaken by that Security Party.

            3.1.5 Vessel documents Photocopies, certified as true, accurate and
                  complete by a director or the secretary of the Shipowning
                  Guarantor of (in respect of each Vessel):-

                  (a)   any time charterparty or bareboat charterparty of that
                        Vessel which will be in force on the first Advance Date
                        and which exceeds twelve (12) months duration which is
                        entered into with an entity which is not a member of the
                        SO Group;

                  (b)   the Management Agreement relating to that Vessel which
                        is in force at the time of this Agreement; and

                  (c)   that Vessel's current Safety Construction, Safety
                        Equipment, Safety Radio and Load Line Certificates;

                  (d)   if required by law and that Vessel is operating in the
                        waters of the United States of America, that Vessel's
                        current Certificate of Financial Responsibility issued
                        pursuant to the United States Oil Pollution Act 1990;

                  (e)   where applicable, that Vessel's current SMC; and

                  (f)   where applicable, each Company's current DOC

                  in each case together with all addenda, amendments or
                  supplements.

          3.1.6   Evidence of ownership In respect of each Vessel,
                  certificate(s) of ownership and encumbrance (or equivalent)
                  issued by the Registrar of Ships (or equivalent official) at
                  the Vessel's port of registry confirming


                                       25
<PAGE>

                  that such Vessel is on the first Advance Date owned by her
                  Shipowning Guarantor and free of registered Encumbrances.

          3.1.7   Evidence of insurance Evidence that each Vessel is insured in
                  the manner required by the Security Documents and that letters
                  of undertaking will be issued in the manner required by the
                  Security Documents, together with (if required by the Agent)
                  the written approval of the Insurances by an insurance adviser
                  appointed by the Agent.

          3.1.8   Confirmation of class A Certificate of Confirmation of Class
                  for hull and machinery (dated not more than seven days before
                  the first Advance Date) confirming that each Vessel is classed
                  with the highest applicable class necessary to properly
                  operate such Vessel of Lloyd's Register of Shipping, Det
                  norske Veritas, the American Bureau of Shipping or such other
                  classification society as may be acceptable to the Agent.

          3.1.9   Valuations A Valuation of each Vessel addressed to the Agent.

          3.1.10  The Security Documents The Security Documents, together with
                  all notices and other documents required by any of them, duly
                  executed and, in the case of the Mortgages, registered with
                  first priority through the Registrar of Ships (or equivalent
                  official) at the port of registry of the Vessel concerned.

          3.1.11  Drawdown Notice A Drawdown Notice.

          3.1.12  Process agent A letter from Stolt Offshore M.S. Limited
                  accepting their appointment by each of the Security Parties as
                  agent for service of Proceedings pursuant to the Security
                  Documents.

          3.1.13  Managers' subordination confirmation letter The written
                  confirmation of the Managers that they will (i) remain the
                  commercial and technical managers of the Vessels throughout
                  the Facility Period and will manage the Vessels in accordance
                  with good standard ship management practice


                                       26
<PAGE>

                  and (ii) subordinate all their rights in relation to the
                  Vessels to those of the Finance Parties.

          3.1.14  The Fee Letters The Fee Letters countersigned on behalf of the
                  Borrower and the Guarantor by way of acceptance of their
                  terms.

          3.1.15  Legal opinions Confirmation satisfactory to the Agent that all
                  legal opinions required by the Agent on behalf of the Banks
                  will be given substantially in the form required by the Agent
                  on behalf of the Banks.

          3.1.16  Accounts The consolidated audited accounts of the Guarantor
                  for its financial year just ended, certified, by a director or
                  the chief financial officer of Stolt Comex Seaway M.S. Limited
                  as agent for the Guarantor, as fair and accurate.

          3.1.17  Material Adverse Change Evidence that no material adverse
                  change has occurred, since 31 May 2000, in the business,
                  assets, operations, conditions (financial or otherwise) or
                  prospects of the Guarantor or its Subsidiaries or in the facts
                  and information regarding such entities as represented to
                  date.

          3.1.18  Corporate Structure Evidence of the actual corporate structure
                  and financial condition of the SO Group to be delivered to and
                  acceptable to the Arrangers.

          3.1.19  Margin Such evidence as the Agent shall require in order to
                  set the Margin.

      3.2   Conditions Subsequent The Borrower undertakes to deliver or to cause
            to be delivered to the Agent on, or as soon as practicable after,
            the first Advance Date, the following additional documents and
            evidence:-

          3.2.1   Evidence of registration Evidence of registration of the
                  Mortgages, in each case with first priority with the Registrar
                  of Ships (or equivalent official) at the port of registry of
                  the Vessel concerned.


                                       27
<PAGE>

          3.2.2   Letters of undertaking Letters of undertaking as required by
                  the Security Documents in form and substance acceptable to the
                  Agent.

          3.2.3   Legal opinions Such legal opinions as the Agent on behalf of
                  the Banks shall require pursuant to Clause 3.1.15.

          3.2.4   Companies Act registrations Evidence that the prescribed
                  particulars of the Security Documents have been delivered to
                  the Registrar of Companies of (i) England and Wales, (ii)
                  Bermuda and (iii) the Isle of Man within the statutory time
                  limit.

          3.2.5   Master's receipts The master's receipt for each of the
                  relevant Mortgages.

          3.2.6   Management Agreements Within three months of the Execution
                  Date (or such later date as the Agent in its discretion may
                  agree) Management Agreements in relation to all the Vessels
                  where such agreements were not delivered to the Agent pursuant
                  to Clause 3.1.5(b).

      3.3   Conditions Precedent - Subsequent Drawings Before any Bank shall
            have any obligation to advance any subsequent Drawings under the
            Facility, the Borrower shall deliver or cause to be delivered to the
            order of the Agent, a Drawdown Notice, in addition to the documents
            and evidence referred to in Clause 3.1 where such documents and
            evidence have not already been delivered to and received by the
            Agent.

      3.4   No waiver If the Banks in their sole discretion agree to advance any
            part of the Facility to the Borrower before all of the documents and
            evidence required by Clause 3.1 or Clause 3.3 (as the case may be)
            have been delivered to or to the order of the Agent, the Borrower
            undertakes to deliver all outstanding documents and evidence to or
            to the order of the Agent no later than the date specified by the
            Agent, and the advance of any part of the Facility shall not be
            taken as a waiver of the Agent's right to require production of all
            the documents and evidence required by Clause 3.1 or Clause 3.3 (as
            the case may be).


                                       28
<PAGE>

      3.5   Form and content All documents and evidence delivered to the Agent
            pursuant to this Clause shall:-

          3.5.1   be in form and substance acceptable to the Agent;

          3.5.2   be accompanied, if required by the Agent, by translations into
                  the English language, certified in a manner acceptable to the
                  Agent;

          3.5.3   if required for registration purposes, be certified,
                  notarised, legalised or attested in a manner acceptable to the
                  Agent.

      3.6   Event of Default No Bank shall be under any obligation to advance
            any part of its Commitment nor to act on any Drawdown Notice if, at
            the date of the Drawdown Notice or at the date on which the advance
            of a Drawing is requested in the Drawdown Notice, an Event of
            Default or Potential Event of Default shall have occurred, or if an
            Event of Default or Potential Event of Default would result from the
            advance of the Drawing in question.

4     Representations and Warranties

      Each of the Borrower and the Guarantor represents and warrants to each of
      the Finance Parties at the date of this Agreement and (by reference to the
      facts and circumstances then pertaining) at the date of each Drawdown
      Notice, at each Advance Date and at each Interest Payment Date as follows
      (except that the representation and warranty contained at Clause 4.6 and
      Clause 4.14 shall only be made on the first Advance Date):-

      4.1   Incorporation and capacity Each of the Security Parties is a body
            corporate duly constituted, organised and validly existing and
            (where applicable) in good standing under the law of its country of
            incorporation, in each case with perpetual corporate existence and
            the power to sue and be sued, to own its assets and to carry on its
            business, and all of the corporate shareholders (if any) of each
            Security Party (other than the Guarantor) are duly constituted and
            existing under the laws of their countries of incorporation with
            perpetual corporate existence and


                                       29
<PAGE>

            the power to sue and be sued, to own their assets and to carry on
            their business and are acting on their own account.

      4.2   Solvency None of the Security Parties is insolvent or in liquidation
            or administration or subject to any other insolvency procedure, and
            no receiver, administrative receiver, administrator, liquidator,
            trustee or analogous officer has been appointed in respect of any of
            the Security Parties or all or any part of their assets except if
            such insolvency should arise in relation to a Shipowner in the
            circumstances where a demand has been made under the Shipowner's
            Guarantee. For this purpose a Security Party will be deemed
            insolvent if it is unable to pay its debts within the meaning of
            S.123 of the Insolvency Act 1986 save in relation to the exception
            referred to in the previous sentence.

      4.3   Binding obligations The Security Documents when duly executed and
            delivered will constitute the legal, valid and binding obligations
            of the Security Parties enforceable in accordance with their
            respective terms subject to applicable laws regarding creditors'
            rights in general.

      4.4   Satisfaction of conditions All acts, conditions and things required
            to be done and satisfied and to have happened prior to the execution
            and delivery of the Security Documents in order to constitute the
            Security Documents the legal, valid and binding obligations of the
            Security Parties in accordance with their respective terms have been
            done, satisfied and have happened in compliance with all applicable
            laws.

      4.5   Registrations and consents With the exception only of the
            registrations referred to in Clause 3.2, all (if any) consents,
            licences, approvals and authorisations of, or registrations with or
            declarations to, any governmental authority, bureau or agency which
            may be required in connection with the execution, delivery,
            performance, validity or enforceability of the Security Documents
            have been obtained or made and remain in full force and effect and
            neither the Borrower nor the Guarantor is aware of any event or
            circumstance which could reasonably be expected adversely to affect
            the right of any of the Security Parties (as the case may be) to
            hold and/or obtain renewal of any such consents, licences, approvals
            or authorisations.


                                       30
<PAGE>

      4.6   Disclosure of material facts Neither the Borrower nor the Guarantor
            is aware of any material facts or circumstances which have not been
            disclosed to the Agent and which might, if disclosed, have
            reasonably been expected to adversely affect the decision of a
            person considering whether or not to make loan facilities of the
            nature contemplated by this Agreement available to the Borrower.

      4.7   No material litigation Except for those matters disclosed in writing
            to the Agent, there is no action, suit, arbitration or
            administrative proceeding nor any contemplated action, suit,
            arbitration or administrative proceeding pending or to its knowledge
            about to be pursued before any court, tribunal or governmental or
            other authority which would, or would be likely to, have a
            materially adverse effect on the business, assets, financial
            condition or creditworthiness of the SO Group.

      4.8   No breach of law or contract The execution, delivery and performance
            of the Security Documents will not contravene any contractual
            restriction or any law binding on any of the Security Parties or on
            any shareholder (whether legal or beneficial) of any of the Security
            Parties (other than the Guarantor), or the constitutional documents
            of any of the Security Parties, nor result in the creation of, nor
            oblige any of the Security Parties to create, any Encumbrance over
            all or any of its assets, with the exception of the Encumbrances
            created by or pursuant to the Security Documents.

      4.9   No deductions Except as disclosed to the Agent in writing, that to
            the best of their knowledge belief and without undue enquiry, none
            of the Security Parties is required to make any deduction or
            withholding from any payment which it may be obliged to make to any
            of the Finance Parties under or pursuant to the Security Documents.

      4.10  No established place of business in the United Kingdom or United
            States Save in respect of the Shipowning Guarantors referred to in
            Schedule 4 whose registered office or principal place of business is
            in the United Kingdom none of the Security Parties has, at the date
            of this Agreement, an established place of business in the United
            Kingdom or the United States of America. The addresses


                                       31
<PAGE>

            of the relevant Shipowning Guarantor's principal place of business
            where specified in Schedule 4 is correct as at the date of this
            Agreement.

      4.11  Use of Facility The Facility will be used for the purposes specified
            in Recital (B).

      4.12  Subsidiaries Save as a result of any merger or amalgamation effected
            pursuant to Clause 12.1.4, each of the Shipowning Guarantors is and
            will remain throughout the Facility Period a directly or indirectly
            wholly owned subsidiary of the Guarantor.

      4.13  Non-Resident Status SCS Shipping Limited is and will throughout the
            Facility Period continue to be a non-resident company within the
            meaning of the Non-Resident Company Duty Act 1986 as amended or
            substituted and each of the Security Parties are and will remain
            throughout the Facility Period non-resident in the Isle of Man for
            tax purposes.

      4.14  Material Adverse Change There has been no material adverse change in
            the financial condition of the Borrower or the Guarantor since
            delivery to the Agent of the Guarantor's consolidated unaudited
            accounts for the period ending 31 May 2000.

      4.15  Finance company Status That (i) the Borrower complies with and shall
            throughout the Facility Period continue to comply (to the extent
            applicable), with the regulations of the Netherlands Ministry of
            Finance dated 4 February 1993 with respect to finance companies and
            that the application of the Facility is and will throughout the
            Facility Period continue to be in accordance with such regulations
            and (ii) all notice requirements to the Dutch central bank pursuant
            to the Foreign Financial Relations Act ("Wet Financiele Betrekkingen
            Buitenland") 1994 have been complied with and shall throughout the
            Facility Period continue to be complied with.

      4.16  Guarantor's company Status That the Guarantor operates as a
            financial holding company under Luxembourg law pursuant to the terms
            of a letter of the "Administration de l'Enregistrement et des
            Domaines" dated 9 September 1994.


                                       32
<PAGE>

5     Currency

      5.1   Selection of Permitted Currency The Borrower may from time to time
            in accordance with this Clause select the Permitted Currency in
            which it wishes a Drawing to be denominated. Any such selection made
            by the Borrower shall be contained in the Drawdown Notice relating
            to the Drawing in question. Once a Permitted Currency in respect of
            a Drawing is selected such Drawing shall remain denominated in such
            Permitted Currency until its repayment in accordance with this
            Agreement.

      5.2   Conditions precedent to denomination in a Permitted Currency The
            denomination of a Drawing in a Permitted Currency pursuant to this
            Clause shall be subject to the following:-

          5.2.1   no Drawing may at any time during the Facility Period be
                  denominated in more than one Permitted Currency and any notice
                  requesting denomination of the Drawing in more than one
                  Permitted Currency shall be of no effect; and

          5.2.2   denomination of a Drawing in the Permitted Currency selected
                  by the Borrower shall not be effected if the Agent certifies
                  by notice in writing to the Borrower, which notice shall be
                  final and conclusive, that deposits in the Permitted Currency
                  selected for the amount of the relevant Drawing and for the
                  Interest Period selected are not available to the Banks in the
                  normal course of business in the London Interbank market on
                  the relevant date.

      5.3   Non-availability of Permitted Currency If, in any Permitted Currency
            selected, deposits of the specified amount and for the specified
            Interest Period are not available to any of the Banks in the normal
            course of business in the London Interbank market on the relevant
            date, or if the Borrower fails to specify a Permitted Currency for a
            Drawing, that Drawing shall be denominated in Dollars for the
            duration of the relevant Interest Period.


                                       33
<PAGE>

      5.4   Repayment During each Interest Period in which a Drawing is
            denominated in a Permitted Currency other than Dollars, the
            obligation of the Borrower to repay the Drawing and to pay interest
            shall be an obligation to repay that Drawing and to pay interest on
            that Drawing in the Permitted Currency in which the Drawing is then
            denominated, whether or not the Facility Outstandings or any part
            thereof shall have become repayable by acceleration or otherwise.

      5.5   Further assurance The Borrower shall execute or procure the
            execution of such further documents as the Agent may reasonably
            require from time to time in order to preserve and maintain the
            validity of the Security Documents as full security for the
            repayment of the Indebtedness.

      5.6   Currency Fluctuations If on the last day of an Interest Period the
            Agent shall determine that the Equivalent Amount of any Drawing
            after repayment is greater than 100% of the Original Dollar Amount,
            the Borrower shall immediately pay to the Agent, on behalf of the
            Banks an amount in the relevant Permitted Currency equal to the
            excess of such Equivalent Amount over the Original Dollar Amount.

6     Repayment and Prepayment

      6.1   Repayment Each Drawing shall be repaid by the Borrower to the Agent
            on behalf of the Banks on the last day of its Interest Period unless
            the Borrower selects a further Interest Period for that Drawing in
            accordance with Clause 7, provided that the Borrower shall not be
            permitted to select such further Interest Period if an Event of
            Default or Potential Event of Default has occurred and shall then be
            obliged to repay such Drawing on the last day of its then current
            Interest Period. In addition, the Borrower shall from time to time
            repay to the Agent as agent for the Banks such amounts of the
            Facility Outstandings as will ensure that the Original Dollar Amount
            does not exceed the Maximum Facility Amount then available. The
            Borrower shall on the Termination Date repay to the Agent as agent
            for the Banks all Facility Outstandings.

      6.2   Prepayment The Borrower may prepay the Facility Outstandings in
            whole or in part in multiples of two million Dollars ($2,000,000),
            or its Equivalent Amount in a Permitted Currency where applicable,
            (or as otherwise may be agreed by the


                                       34
<PAGE>

            Agent) provided that it has first given to the Agent not fewer than
            fourteen (14) days' prior written notice expiring on a Business Day
            of its intention to do so. Any notice pursuant to this Clause 6.2
            once given shall be irrevocable and shall oblige the Borrower to
            make the prepayment referred to in the notice on the Business Day
            specified in the notice, together with all interest accrued on the
            amount prepaid up to and including that Business Day.

      6.3   Prepayment indemnity If the Borrower shall, subject always to Clause
            6.2, make a prepayment on a Business Day other than the last day of
            an Interest Period, it shall pay to the Agent on behalf of the Banks
            any amount which is necessary to compensate the Banks for any Break
            Costs incurred by the Agent or any of the Banks as a result of the
            prepayment in question.

      6.4   Application of prepayments Any prepayment in an amount less than the
            Indebtedness shall be applied in satisfaction or reduction first of
            any costs and other expenses outstanding; secondly of all interest
            accrued with respect to the outstanding Drawings in the currency in
            which the prepayment is to be made; thirdly of the outstanding
            Drawings in the currency in which the prepayment is to be made in
            inverse order of maturity, fourthly of all other interest accrued;
            and fifthly of all other outstanding Drawings in inverse order of
            maturity.

      6.5   Reborrowing of prepayments Any amount prepaid pursuant to this
            Agreement may be reborrowed in accordance with Clause 2.4.4 and
            subject to compliance with Clause 12.2.2.

      6.6   Total Loss In the event that any Vessel becomes a Total Loss, on the
            date of such Total Loss occurring, the Maximum Facility Amount shall
            reduce by the Pro Rata Insurance Proceeds Amount in respect of such
            Vessel. Any such reductions in the Maximum Facility Amount shall not
            be reversed. If, as a result of any reduction in the Maximum
            Facility Amount pursuant to this Clause the Original Dollar Amount
            exceeds the Maximum Facility Amount, the Borrower shall, on the
            earlier to occur of (a) the one hundred and eightieth day after the
            date of such Total Loss occurring and (b) the date on which the
            Shipowning Guarantor receives the proceeds of such Total Loss,
            prepay such amount of the Original Dollar Amount as will ensure that
            the Original Dollar Amount is not greater than


                                       35
<PAGE>

            the Maximum Facility Amount. Any such prepayment shall not be
            reborrowed, and Clause 6.3 shall apply to any such prepayment.

7     Interest

      7.1   Interest Periods The period during which any Drawing shall be
            outstanding pursuant to this Agreement shall be divided into
            consecutive Interest Periods of one, two, three or six months'
            duration, as selected by the Borrower by written notice to the Agent
            not later than 11.00 a.m. on the fourth Business Day before the
            beginning of the Interest Period in question, or such other duration
            as may be agreed by the Banks in their discretion. No more than
            three one (1) month Interest Periods may be selected by the Borrower
            in each calendar year during the Facility Period.

      7.2   Beginning and end of Interest Periods The first Interest Period in
            respect of each Drawing shall begin on the Advance Date of that
            Drawing and shall end on the last day of the Interest Period
            selected in accordance with Clause 7.1. Any subsequent Interest
            Period selected in respect of each Drawing shall commence on the day
            following the last day of its previous Interest Period and shall end
            on the last day of its current Interest Period selected in
            accordance with Clause 7.1. However, in respect of any Drawings
            outstanding on the Termination Date, the Interest Period applicable
            to such Drawings shall end on the Termination Date.

      7.3   Interest rate During each Interest Period, interest shall accrue on
            each Drawing at the rate determined by the Agent to be (i) for the
            first six months following the Execution Date, the aggregate of (a)
            the higher of the applicable Margin or one point five per centum
            (1.50%) (b) LIBOR and, (c) if applicable the Additional Rate, and
            (ii) thereafter, the aggregate of (a) the applicable Margin, (b)
            LIBOR and, if applicable, (c) the Additional Rate for the remainder
            of the Facility Period, determined in each case, at or about 11.00
            a.m. on the second Business Day prior to the beginning of the
            Interest Period relating to that Drawing.

      7.4   Accrual and payment of interest During the Facility Period, interest
            shall accrue from day to day, shall be calculated on the basis of a
            360 day year and the actual number of days elapsed (or, in any
            circumstance where market practice


                                       36
<PAGE>

            differs, in accordance with the prevailing market practice) and
            shall be paid by the Borrower to the Agent on behalf of the Banks on
            the last day of each Interest Period and additionally, during any
            Interest Period exceeding three months, on the last day of each
            successive three month period after the beginning of that Interest
            Period.

      7.5   Ending of Interest Periods If any Interest Period would end on a day
            which is not a Business Day, that Interest Period shall end on the
            next succeeding Business Day (unless the next succeeding Business
            Day falls in the next calendar month, in which event the Interest
            Period in question shall end on the next preceding Business Day).

      7.6   Default Rate If an Event of Default shall occur, the whole of the
            Indebtedness shall, from the date of the occurrence of the Event of
            Default, bear interest up to the date of actual payment (both before
            and after judgment) at the Default Rate, compounded at such
            intervals as the Agent shall in its reasonable discretion determine,
            which interest shall be payable from time to time by the Borrower to
            the Agent on behalf of the Banks on demand.

      7.7   Determinations conclusive Each determination of an interest rate
            made by the Agent in accordance with Clause 7 shall (save in the
            case of manifest error or on any question of law) be final and
            conclusive.

8     Guarantee and Indemnity

      8.1   The Borrower's Obligations

            In consideration of the agreement of the Banks to make the Facility
            available to the Borrower, the Guarantor:-

          8.1.1   irrevocably and unconditionally guarantees to discharge on
                  demand the Borrower's Obligations, including Interest from the
                  date of demand until the date of payment, both before and
                  after judgement; and


                                       37
<PAGE>

          8.1.2   agrees, as a separate and independent obligation, that, if any
                  of the Borrower's Obligations are not recoverable from the
                  Guarantor under Clause 8.1.1 for any reason, the Guarantor
                  will be liable to the Finance Parties as a principal debtor by
                  way of indemnity for the same amount as that for which the
                  Guarantor would have been liable had those Borrower's
                  Obligations been recoverable and agrees to discharge its
                  liability under this Clause 8.1.2 on demand together with
                  Interest from the date of demand until the date of payment,
                  both before and after judgement.

      8.2   Continuing Security

            The Guarantee is a continuing security for the full amount of the
            Borrower's Obligations from time to time and shall remain in force
            notwithstanding the liquidation of the Borrower or any change in the
            constitution of the Borrower or of any Finance Party or the
            absorption of or amalgamation by any Finance Party in or with any
            other entity or the acquisition of all or any part of the assets or
            undertaking of any Finance Party by any other entity.

      8.3   Preservation of Guarantor's Liability

          8.3.1   The Banks may without the Guarantor's consent and without
                  notice to the Guarantor and without in any way releasing or
                  reducing the Guarantor's Liabilities:-

                  (a)   amend, novate, supplement or replace all or any of the
                        Borrower's Security Documents;

                  (b)   increase or reduce the amount of the Facility or vary
                        the terms and conditions for its repayment or prepayment
                        (including, without limitation, the rate and/or method
                        of calculation of interest payable on the Facility);

                  (c)   allow to the Borrower or to any other person any time or
                        other indulgence;


                                       38
<PAGE>

                  (d)   renew, vary, release or refrain from enforcing any of
                        the Borrower's Security Documents or any other security,
                        guarantee or indemnity which the Agent may now or in the
                        future hold from the Borrower or from any other person;

                  (e)   compound with the Borrower or any other person;

                  (f)   enter into, renew, vary or terminate any other agreement
                        or arrangement with the Borrower or any other person; or

                  (g)   make any concession to the Borrower or do or omit or
                        neglect to do anything which might, but for this
                        provision, operate to release or reduce the liability of
                        the Guarantor under the Guarantee.

          8.3.2   The liability of the Guarantor under the Guarantee shall not
                  be affected by:-

                  (a)   the absence of or any defective, excessive or irregular
                        exercise of any of the powers of the Borrower or of any
                        Surety;

                  (b)   any security given or payment made to the Finance
                        Parties or any of them by the Borrower or any other
                        person being avoided or reduced under any law (whether
                        English or foreign) relating to bankruptcy or insolvency
                        or analogous circumstance in force from time to time;

                  (c)   the liquidation, administration, receivership or
                        insolvency of the Guarantor;

                  (d)   any other security, guarantee or indemnity now or in the
                        future held by the Finance Parties or any of them being
                        defective, void or unenforceable, or the failure of the
                        any Finance Party to take any security, guarantee or
                        indemnity;

                  (e)   any compromise or arrangement under Part I or Part VII
                        of the Insolvency Act 1986 or section 425 of the
                        Companies Act 1985


                                       39
<PAGE>

                        (or any statutory modification or re-enactment of either
                        of them for the time being in force) or under any
                        analogous provision of any foreign law;

                  (f)   the novation of any of the Borrower's Obligations;

                  (g)   anything which would not have released or reduced the
                        liability of the Guarantor to the Finance Parties had
                        the liability of the Guarantor under Clause 8.1.1 been
                        as a principal debtor of the Finance Parties and not as
                        a guarantor.

      8.4   Preservation of Banks' Rights

          8.4.1   The Guarantee is in addition to any other security, guarantee
                  or indemnity now or in the future held by the Finance Parties
                  in respect of the Borrower's Obligations, whether from the
                  Borrower, the Guarantor or any other person, and shall not
                  merge with, prejudice or be prejudiced by any such security,
                  guarantee or indemnity or any contractual or legal right of
                  each Finance Party.

          8.4.2   Any release, settlement, discharge or arrangement relating to
                  the liabilities of the Guarantor under the Guarantee shall be
                  conditional on no payment, assurance or security received by
                  the Finance Parties in respect of the Borrower's Obligations
                  being avoided or reduced under any law (whether English or
                  foreign) in force from time to time relating to bankruptcy,
                  insolvency or any (in the opinion of the Agent) analogous
                  circumstance and after any such avoidance or reduction the
                  Finance Parties shall be entitled to exercise all of their
                  rights, powers, discretions and remedies under or pursuant to
                  the Guarantee and/or any other rights, powers, discretions or
                  remedies which they would otherwise have been entitled to
                  exercise, as if no release, settlement, discharge or
                  arrangement had taken place.

          8.4.3   Following the discharge of the Borrower's Obligations, the
                  Finance Parties shall be entitled to retain any security which
                  they may hold for the


                                       40
<PAGE>

                  liabilities of the Guarantor under the Guarantee until the
                  Finance Parties are satisfied in their reasonable discretion
                  that they will not have to make any payment under any law
                  referred to in Clause 8.4.2.

          8.4.4   Until all claims of the Finance Parties in respect of the
                  Borrower's Obligations have been discharged in full:-

                  (a)   the Guarantor shall not be entitled to participate in
                        any security held or sums received by any Finance Party
                        in respect of all or any part of the Borrower's
                        Obligations;

                  (b)   the Guarantor shall not stand in the place of, or be
                        subrogated for, any of the Finance Parties in respect of
                        any security nor take any step to enforce any claim
                        against the Borrower or any Surety (or the estate or
                        effects of any such person) nor claim or exercise any
                        right of set off or counterclaim against the Borrower or
                        any Surety nor make any claim in the bankruptcy or
                        liquidation of the Borrower or any Surety in respect of
                        any sums paid by the Guarantor to the Finance Parties or
                        any of them or in respect of any sum which includes the
                        proceeds of realisation of any security at any time held
                        by the Finance Parties or any of them in respect of all
                        or any part of the Guarantor's Liabilities; and

                  (c)   the Guarantor shall not take any steps to enforce any
                        claim which it may have against the Borrower or any
                        Security Party without the prior written consent of the
                        Agent, and then only on such terms and subject to such
                        conditions as the Agent may impose.

          8.4.5   The Guarantor's Liabilities shall be continuing for all
                  purposes (including Interest) and every sum of money which may
                  now or in the future be or become due or owing to the Finance
                  Parties by the Borrower under the Security Documents to which
                  the Borrower is a party (or which would have become due or
                  owing had it not been for the bankruptcy, liquidation or
                  insolvency of the Borrower) shall be deemed to continue due
                  and owing to the Finance Parties by the Borrower until such
                  sum is actually


                                       41
<PAGE>

                  repaid to the Finance Parties, notwithstanding the bankruptcy,
                  liquidation or insolvency of the Borrower.

          8.4.6   The Finance Parties may, but shall not be obliged to, resort
                  for their own benefit to any other means of payment at any
                  time and in any order they think fit without releasing or
                  reducing the Guarantor's Liabilities.

          8.4.7   The Finance Parties may enforce the Guarantee either before or
                  after resorting to any other means of payment or enforcement
                  and, in the latter case, without entitling the Guarantor to
                  any benefit from or share in any such other means of payment
                  for so long as the Borrower's Obligations have not been
                  discharged in full.

      8.5   Other Security

            The Guarantor confirms that it has not taken and will not take
            without the prior written consent of the Agent (and then only on
            such terms and subject to such conditions as the Agent may impose)
            any security from the Borrower or from any Surety in connection with
            the Guarantee and any security taken by the Guarantor in connection
            with the Guarantee notwithstanding this Clause shall be held by the
            Guarantor in trust for the Agent on behalf of the Finance Parties
            absolutely as a continuing security for the Guarantor's Liabilities.

9     Fees

      9.1   The Borrower shall pay to or to the order of the Agent the fees,
            commissions and other sums referred to in the Fee Letters in the
            amounts and on the dates set out in the Fee Letters.

      9.2   The Borrower shall pay to the Agent Commitment Commission in Dollars
            at the rate of one half of the applicable Margin per annum on any
            undrawn part of the Facility after the Execution Date. The
            Commitment Commission will accrue from day to day on the basis of a
            360 day year and the actual number of days elapsed and shall be paid
            quarterly in arrears from the Execution Date until the Termination
            Date based upon the Margin in effect for the previous quarter with


                                       42
<PAGE>

            the first such payment being due and payable on the date falling
            three months after the Execution Date. Where any Commitment
            Commission is due and payable prior to the first Advance Date the
            applicable Margin shall be the Margin that would have applied to the
            Facility if all or any part of the Facility had been advanced under
            this Agreement.

10    Security Documents

      As security for the repayment of the Indebtedness, the Borrower shall
      execute and deliver to the Agent or cause to be executed and delivered to
      the Agent, on or before the first Advance Date, the following Security
      Documents in such forms and containing such terms and conditions as the
      Agent shall require:-

      10.1  the Mortgages and Deed of Covenants a first preferred and/or
            priority mortgage together, where applicable, with collateral deed
            of covenants over each Vessel;

      10.2  the Assignments a deed of assignment of the Insurances, Earnings and
            Requisition Compensation of each Vessel;

      10.3  the Shipowners' Guarantee the joint and several guarantee and
            indemnity of the Shipowning Guarantors;

      10.4  the Factoring Agreement a factoring agreement in relation to the
            assignment of Earnings contained in the Assignment over mv "SEAWAY
            FALCON" to be made between Stolt Offshore A/S and the Agent.

11    Agency and Trust

      11.1  Appointment Each of the Banks, the Arrangers and the Documentation
            Agent appoints the Agent its agent for the purpose of administering
            the Facility and the Security Documents and authorises the Agent and
            its directors, officers, employees and agents acting on the
            instructions from time to time of an Instructing Group, and subject
            to Clauses 11.4 and 11.19, to execute the Security Documents on its
            behalf and to exercise all rights, powers, discretions and remedies
            vested in the Banks under or pursuant to the Security Documents,
            together with all powers reasonably incidental to them.


                                       43
<PAGE>

      11.2  Authority Each of the Banks and the Arrangers irrevocably authorises
            the Agent, acting on the instructions from time to time of an
            Instructing Group:-

          11.2.1  to give or withhold any consents or approvals; and

          11.2.2  to exercise, or refrain from exercising, any discretions; and

          11.2.3  to collect, receive, release or pay any money;

            under or pursuant to any of the Security Documents. In addition the
            Agent may waive compliance by any Security Party with Clauses
            12.1.2, 12.1.3, 12.2.3, 12.2.9, 13.1 and 19.2.3 with the prior
            written consent of an Instructing Group. The Agent shall have no
            duties or responsibilities as agent or as security trustee other
            than those expressly conferred on it by the Security Documents and
            shall not be obliged to act on any instructions if to do so would,
            in the opinion of the Agent, be contrary to any provision of the
            Security Documents or to any law, or would expose the Agent to any
            actual or potential liability to any third party.

      11.3  Trust The Agent agrees and declares, and each of the Banks
            acknowledges, that, subject to the terms and conditions of this
            Clause, the Agent holds the Trust Property on trust for the Banks,
            in accordance with their respective Proportionate Shares,
            absolutely. Each of the Banks agrees that the obligations, rights
            and benefits vested in the Agent in its capacity as security trustee
            shall be performed and exercised in accordance with this Clause. The
            Agent in its capacity as security trustee shall have the benefit of
            all of the provisions of this Agreement benefiting it in its
            capacity as agent for the Banks, and all the powers and discretions
            conferred on trustees by the Trustee Act 1925 (to the extent not
            inconsistent with this Agreement). In addition:-

          11.3.1  the Agent (and any attorney, agent or delegate of the Agent)
                  may indemnify itself or himself out of the Trust Property
                  against all liabilities, costs, fees, damages, charges, losses
                  and expenses sustained or incurred by it or him in relation to
                  the taking or holding of any of the Trust Property or in
                  connection with the exercise or purported exercise


                                       44
<PAGE>

                  of the rights, trusts, powers and discretions vested in the
                  Agent or any other such person by or pursuant to the Security
                  Documents or in respect of anything else done or omitted to be
                  done in any way relating to the Security Documents; and

          11.3.2  the Banks acknowledge that the Agent shall be under no
                  obligation to insure any property nor to require any other
                  person to insure any property and shall not be responsible for
                  any loss which may be suffered by any person as a result of
                  the lack or insufficiency of any insurance; and

          11.3.3  the Agent and the Banks agree that the perpetuity period
                  applicable to the trusts declared by this Agreement shall be
                  the period of eighty years from the Execution Date.

      11.4  Limitations on authority Except with the prior written consent of
            each of the Banks, the Agent shall not be entitled to :-

          11.4.1  release or vary any security given for the Borrower's
                  obligations under this Agreement; nor

          11.4.2  except as otherwise provided in this Agreement, agree to waive
                  the payment of any sum of money payable by any of the Security
                  Parties under the Security Documents or waive, modify, vary or
                  otherwise amend or excuse performance by any of the Security
                  Parties of any material provision of the Security Documents;
                  nor

          11.4.3  change the meaning of the expression "Instructing Group"; nor

          11.4.4  exercise, or refrain from exercising, any discretion, or give
                  or withhold any consent, the exercise or giving of which is,
                  by the terms of this Agreement, expressly reserved to the
                  Banks; nor

          11.4.5  extend the due date for the payment of any sum of money
                  payable by any of the Security Parties under the Security
                  Documents; nor


                                       45
<PAGE>

          11.4.6  take or refrain from taking any step if the effect of such
                  action or inaction may lead to the increase of the obligations
                  of a Bank under any of the Security Documents; nor

          11.4.7  agree to change the currency in which any sum is payable under
                  the Security Documents (other than in accordance with the
                  terms of the Security Documents); nor

          11.4.8  agree to amend this Clause 11.4; nor

          11.4.9  agree to amend Clauses 1.1.58, 13.1 and 19.2.3.

      11.5  Liability Neither the Agent nor any of its directors, officers,
            employees or agents shall be liable to the Banks or the Arrangers
            for anything done or omitted to be done by the Agent under or in
            connection with the Security Documents unless as a result of the
            Agent's wilful misconduct or gross negligence.

      11.6  Acknowledgement Each of the Banks and the Arrangers acknowledges
            that:-

          11.6.1  it has not relied on any representation made by the Agent or
                  any of the Agent's directors, officers, employees or agents or
                  by any other person acting or purporting to act on behalf of
                  the Agent to induce it to enter into any of the Security
                  Documents;

          11.6.2  it has made and will continue to make without reliance on the
                  Agent, and based on such documents and other evidence as it
                  considers appropriate, its own independent investigation of
                  the financial condition and affairs of the Security Parties in
                  connection with the making and continuation of the Facility;

          11.6.3  it has made its own appraisal of the creditworthiness of the
                  Security Parties;


                                       46
<PAGE>

          11.6.4  the Agent shall not have any duty or responsibility at any
                  time to provide it with any credit or other information
                  relating to any of the Security Parties unless that
                  information is received by the Agent pursuant to the express
                  terms of the Security Documents.

            Each of the Banks and the Arrangers agrees that it will not assert
            nor seek to assert against any director, officer, employee or agent
            of the Agent or against any other person acting or purporting to act
            on behalf of the Agent any claim which it might have against them in
            respect of any of the matters referred to in this Clause.

      11.7  Limitations on responsibility The Agent shall have no responsibility
            to any of the Security Parties or to the Banks or to the Arrangers
            on account of:-

          11.7.1  the failure of a Bank or of any of the Security Parties to
                  perform any of their respective obligations under the Security
                  Documents;

          11.7.2  the financial condition of any of the Security Parties;

          11.7.3  the completeness or accuracy of any statements,
                  representations or warranties made in or pursuant to any of
                  the Security Documents, or in or pursuant to any document
                  delivered pursuant to or in connection with any of the
                  Security Documents;

          11.7.4  the negotiation, execution, effectiveness, genuineness,
                  validity, enforceability, admissibility in evidence or
                  sufficiency of any of the Security Documents or of any
                  document executed or delivered pursuant to or in connection
                  with any of the Security Documents.

      11.8  The Agent's rights The Agent may:-

          11.8.1  assume that all representations or warranties made or deemed
                  repeated by any of the Security Parties in or pursuant to any
                  of the Security Documents are true and complete, unless, in
                  its capacity as the Agent, it has acquired actual knowledge to
                  the contrary; and


                                       47
<PAGE>

          11.8.2  assume that no Event of Default or Potential Event of Default
                  has occurred unless, in its capacity as the Agent, it has
                  acquired actual knowledge to the contrary; and

          11.8.3  rely on any document or Communication believed by it to be
                  genuine; and

          11.8.4  rely as to legal or other professional matters on opinions and
                  statements of any legal or other professional advisers
                  selected or approved by it; and

          11.8.5  rely as to any factual matters which might reasonably be
                  expected to be within the knowledge of any of the Security
                  Parties on a certificate signed by or on behalf of that
                  Security Party; and

          11.8.6  refrain from exercising any right, power, discretion or remedy
                  unless and until instructed to exercise that right, power,
                  discretion or remedy and as to the manner of its exercise by
                  the Banks (or, where applicable, by an Instructing Group) and
                  unless and until the Agent has received from the Banks any
                  payment which the Agent may require on account of, or any
                  security which the Agent may require for, any costs, claims,
                  expenses (including legal and other professional fees) and
                  liabilities which it considers it may incur or sustain in
                  complying with those instructions.

      11.9  The Agent's duties The Agent shall:-

          11.9.1  if requested in writing to do so by a Bank, make enquiry and
                  advise the Banks as to the performance or observance of any of
                  the provisions of the Security Documents by any of the
                  Security Parties or as to the existence of an Event of
                  Default; and

          11.9.2  inform the Banks promptly of any Event of Default of which the
                  Agent has actual knowledge; and


                                       48
<PAGE>

          11.9.3  inform the Banks promptly of any disclosures in writing
                  received by the Agent pursuant to Clause 4.7.

      11.10 No deemed knowledge The Agent shall not be deemed to have actual
            knowledge of the falsehood or incompleteness of any representation
            or warranty made or deemed repeated by any of the Security Parties
            or actual knowledge of the occurrence of any Event of Default or
            Potential Event of Default unless a Bank or any of the Security
            Parties shall have given written notice thereof to the Agent.

      11.11 Other business The Agent may, without any liability to account to
            the Banks or the Arrangers, generally engage in any kind of banking
            or trust business with any of the Security Parties or any of their
            respective Subsidiaries or associated companies or with a Bank as if
            it were not the Agent.

      11.12 Indemnity The Banks shall, promptly on the Agent's request,
            reimburse the Agent in their respective Proportionate Shares, for,
            and keep the Agent fully indemnified in respect of:-

          11.12.1 all amounts payable by the Borrower to the Agent pursuant to
                  Clause 19 to the extent that those amounts are not paid by the
                  Borrower;

          11.12.2 all liabilities, damages, costs and claims sustained or
                  incurred by the Agent in connection with the Security
                  Documents, or the performance of its duties and obligations,
                  or the exercise of its rights, powers, discretions or remedies
                  under or pursuant to any of the Security Documents; or in
                  connection with any action taken or omitted by the Agent under
                  or pursuant to any of the Security Documents, unless in any
                  case those liabilities, damages, costs or claims arise solely
                  from the Agent's wilful misconduct or gross negligence.

      11.13 Employment of agents In performing its duties and exercising its
            rights, powers, discretions and remedies under or pursuant to the
            Security Documents, the Agent shall be entitled to employ and pay
            agents to do anything which the Agent is empowered to do under or
            pursuant to the Security Documents (including the receipt of money
            and documents and the payment of money) and to act or refrain


                                       49
<PAGE>

            from taking action in reliance on the opinion of, or advice or
            information obtained from, any lawyer, banker, broker, accountant,
            valuer or any other person believed by the Agent in good faith to be
            competent to give such opinion, advice or information.

      11.14 Distribution of payments The Agent shall pay promptly to the order
            of each of the Banks that Bank's Proportionate Share of every sum of
            money received by the Agent pursuant to the Security Documents or
            the Mortgagees' Insurances (with the exception of any amounts
            payable pursuant to Clause 9.1 and/or the Fee Letters and any
            amounts which, by the terms of the Security Documents, are paid to
            the Agent for the account of the Agent or the Syndication Agents
            alone or specifically for the account of one or more Banks or
            Arrangers) and until so paid such amount shall be held by the Agent
            on trust absolutely for that Bank, that Arranger or the Syndication
            Agents (or as the case may be).

      11.15 Reimbursement The Agent shall have no liability to pay any sum to a
            Bank or to an Arranger or the Syndication Agents until it has itself
            received payment of that sum. If, however, the Agent does pay any
            sum to a Bank or to an Arranger or the Syndication Agents on account
            of any amount prospectively due to it pursuant to Clause 11.14
            before it has itself received payment of that amount, and the Agent
            does not in fact receive payment within five Business Days after the
            date on which that payment was required to be made by the terms of
            the Security Documents or the Mortgagees' Insurances, the recipient
            will, on demand by the Agent, refund to the Agent an amount equal to
            the amount received by it, together with an amount sufficient to
            reimburse the Agent for any amount which the Agent may certify that
            it has been required to pay by way of interest on money borrowed to
            fund the amount in question during the period beginning on the date
            on which that amount was required to be paid by the terms of the
            Security Documents or the Mortgagees' Insurances and ending on the
            date on which the Agent receives reimbursement.

      11.16 Redistribution of payments Unless otherwise agreed between the
            Finance Parties, if at any time a Bank receives or recovers by way
            of set-off, the exercise of any lien or otherwise (other than from
            any assignee or transferee of or sub-participant in that Bank's
            Commitment), an amount greater than that Bank's


                                       50
<PAGE>

            Proportionate Share of any sum due from any of the Security Parties
            under the Security Documents (the amount of the excess being
            referred to in this Clause as the "Excess Amount") then:-

          11.16.1 that Bank shall promptly notify the Agent (which shall
                  promptly notify each other Bank);

          11.16.2 that Bank shall pay to the Agent an amount equal to the Excess
                  Amount within ten days of its receipt or recovery of the
                  Excess Amount; and

          11.16.3 the Agent shall treat that payment as if it were a payment by
                  the Security Party in question on account of the sum owed to
                  the Banks as aforesaid and shall account to the Banks in
                  respect of the Excess Amount in accordance with the provisions
                  of this Clause.

            However, if a Bank has commenced any Proceedings to recover sums
            owing to it under the Security Documents and, as a result of, or in
            connection with, those Proceedings has received an Excess Amount,
            the Agent shall not distribute any of that Excess Amount to any
            other Bank which had been notified of the Proceedings and had the
            legal right to, but did not, join those Proceedings or commence and
            diligently prosecute separate Proceedings to enforce its rights in
            the same or another court.

      11.17 Rescission of Excess Amount If all or any part of any Excess Amount
            is rescinded or must otherwise be restored to any of the Security
            Parties or to any other third party, the Banks which have received
            any part of that Excess Amount by way of distribution from the Agent
            pursuant to this Clause shall repay to the Agent for the account of
            the Bank which originally received or recovered the Excess Amount,
            the amount which shall be necessary to ensure that the Banks share
            rateably in accordance with their Proportionate Shares in the amount
            of the receipt or payment retained, together with interest on that
            amount at a rate equivalent to that (if any) paid by the Bank
            receiving or recovering the Excess Amount to the person to whom that
            Bank is liable to make payment in respect of such amount, and Clause
            11.16.3 shall apply only to the retained amount.


                                       51
<PAGE>

      11.18 Proceedings Each of the Finance Parties shall notify one another of
            the proposed commencement of any Proceedings under any of the
            Security Documents prior to their commencement. No such Proceedings
            may be commenced without the prior written consent of an Instructing
            Group.

      11.19 Instructions Where the Agent is authorised or directed to act or
            refrain from acting in accordance with the instructions of the Banks
            or of an Instructing Group each of the Banks shall provide the Agent
            with instructions within five Business Days of the Agent's request
            (which request may be made orally or in writing). If a Bank does not
            provide the Agent with instructions within that period, (i) that
            Bank shall be bound by the decision of the Agent, (ii) that Bank
            shall have no vote for the purposes of this Clause and (iii) the
            combined Proportionate Shares of the other Banks who provided such
            instructions shall be deemed to contribute 100%. Nothing in this
            Clause shall limit the right of the Agent to take, or refrain from
            taking, any action without obtaining the instructions of the Banks
            if the Agent in its discretion considers it necessary or appropriate
            to take, or refrain from taking, such action in order to preserve
            the rights of the Banks under or in connection with the Security
            Documents. In that event, the Agent will notify the Banks of the
            action taken by it as soon as reasonably practicable, and the Banks
            agree to ratify any action taken by the Agent pursuant to this
            Clause.

      11.20 Communications Any Communication under this Clause shall be given,
            delivered, made or served, in the case of the Agent (in its capacity
            as Agent or as one of the Banks), and in the case of the other
            Banks, at the address indicated in Schedule 1 or such other
            addresses as shall be duly notified in writing to the Agent on
            behalf of the Banks.

      11.21 Payments All amounts payable to a Bank under this Clause shall be
            paid to such account at such bank as that Bank may from time to time
            direct in writing to the Agent.

      11.22 Retirement Subject to a successor being appointed in accordance with
            this Clause, the Agent may retire as agent and/or security trustee
            at any time without assigning any reason by giving to the Borrower
            and the other Finance Parties notice of its intention to do so, in
            which event the following shall apply:-


                                       52
<PAGE>

          11.22.1 with the consent of the Borrower, not to be unreasonably
                  withheld, the other Finance Parties may within thirty days
                  after the date of the Agent's notice appoint a successor to
                  act as agent and/or security trustee or, if they fail to do so
                  with the consent of the Borrower, not to be unreasonably
                  withheld, the Agent may appoint any other bank or financial
                  institution as its successor;

          11.22.2 the resignation of the Agent shall take effect simultaneously
                  with the appointment of its successor on written notice of
                  that appointment being given to the Borrower and the other
                  Finance Parties;

          11.22.3 the Agent shall thereupon be discharged from all further
                  obligations as agent and/or security trustee but shall remain
                  entitled to the benefit of the provisions of this Clause;

          11.22.4 the Agent's successor and each of the other parties to this
                  Agreement shall have the same rights and obligations amongst
                  themselves as they would have had if that successor had been a
                  party to this Agreement.

      11.23 No fiduciary relationship Except as provided in Clauses 11.3 and
            11.14, the Agent shall not have any fiduciary relationship with or
            be deemed to be a trustee of or for a Bank or an Arranger and
            nothing contained in any of the Security Documents shall constitute
            a partnership between any two or more Banks or Arrangers or between
            the Agent and any Bank or Arranger.

      11.24 The Agent as a Bank The expression "the Banks" when used in the
            Security Documents includes the Agent in its capacity as one of the
            Banks. The Agent shall be entitled to exercise its rights, powers,
            discretions and remedies under or pursuant to the Security Documents
            in its capacity as one of the Banks in the same manner as any other
            Bank and as if it were not also the Agent.

      11.25 The Agent as security trustee Unless the context otherwise requires,
            the expression "the Agent" when used in the Security Documents
            includes the Agent acting in its capacities both as agent and
            security trustee.


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<PAGE>

      11.26 Syndication Agent Each of the Finance Parties agrees, for the
            avoidance of doubt, that the Syndication Agents have no duties in
            their capacities as Syndication Agents under the Security Documents.

12    Covenants

      Each of the Borrower and the Guarantor covenants with the Finance Parties
      in the following terms.

      12.1  Negative covenants

            Neither the Borrower nor the Guarantor, will:-

          12.1.1  no third party rights without the Banks' prior written consent
                  permit any member of the SO Group to create or permit to arise
                  or continue any Encumbrance on or over all or any part of its
                  assets or undertaking (including, without limitation accounts
                  receivable by that member) except (i) in relation to topside
                  of the "Seaway Polaris" and the hulls "Seaway Polaris" and
                  "DLB 801" (ii) any Encumbrance existing on the date of this
                  Agreement and listed in Appendix B or, (iii) any Encumbrance
                  relating to assets which become the property of the SO Group
                  after the date of this Agreement (including accounts
                  receivable attributable thereto where such accounts
                  receivables security interest is ancillary to the security
                  interest in the associated fixed costs as part of an asset
                  based financing) and (iv) Permitted Liens; nor

          12.1.2  chartering without the prior written consent of an Instructing
                  Group, (a) charter any Vessel or permit any Vessel to be
                  chartered on any bareboat charter, or otherwise for a period
                  exceeding (or inclusive of any extension options, capable of
                  exceeding) twelve (12) months) provided that committing a
                  Vessel for several periods, each of less than twelve months
                  but for an aggregated period exceeding (12) months or
                  chartering a Vessel to a member of the SO Group for a period
                  in excess of twelve (12) months shall not be deemed to be a
                  breach of this Clause


                                       54
<PAGE>

                  (together the "Permitted Charters") or (b) following the
                  occurrence and during the continuation of an Event of Default,
                  let any Vessel on charter (including a Permitted Charter
                  unless the same was entered into prior to the occurrence of
                  any such Event of Default) or renew or extend any charter or
                  other contract of employment of any such Vessel (nor agree to
                  do so); nor

          12.1.3  no change in management without the prior written consent of
                  an Instructing Group, permit the appointment of anyone other
                  than the Managers as commercial or technical managers of the
                  Vessels, nor terminate or amend any Management Agreement
                  and/or the arrangements for the commercial or technical
                  management of the Vessels in a manner which is, in the
                  reasonable opinion of the Agent, detrimental to the interest
                  of the Finance Parties or any of them, nor permit the Managers
                  to sub-contract or delegate the commercial or technical
                  management of any Vessel to any third party outside of the SO
                  Group provided that any termination or amendment of any
                  Management Agreement and/or management arrangements referred
                  to above with a member of the SO Group shall not be deemed to
                  be detrimental to the interests of the Finance Parties or any
                  of them where any new manager (being within the SO Group)
                  enters into an agreement with the Agent subordinating its
                  rights in the Vessel to those of the Banks in terms
                  substantially the same as contained in those
                  agreements/arrangements entered into immediately before such
                  amendment; nor

          12.1.4  merger or amalgamation without the prior written consent of an
                  Instructing Group, permit any merger or amalgamation unless
                  (i) the Guarantor, the Borrower or a Shipowning Guarantor, as
                  the case may be, remains the surviving entity following any
                  such merger or amalgamation (or if the merger or amalgamation
                  involves more than one of the Shipowning Guarantors, then one
                  of the Shipowning Guarantors remains the surviving entity) and
                  (ii) such surviving entity is not divested of any material
                  part of the assets or operations of such member of the SO
                  Group and (iii) in the case of the Guarantor only,


                                       55
<PAGE>

                  such merger or amalgamation has been approved by a duly passed
                  resolution of the Guarantor's shareholders; nor

          12.1.5  no sale of Vessels/Shipowning Guarantors without the prior
                  written consent of the Banks sell or cause to be sold or,
                  dispose or caused to be disposed of in whole or in part, any
                  Vessel or Shipowning Guarantor nor agree to do so except where
                  (i) the Maximum Facility Amount is reduced pursuant to Clause
                  2.4.3 or (ii) the sale or disposal, in whole or in part, is
                  made to a member of the SO Group who will become a Shipowning
                  Guarantor upon the acquisition of such Vessel and who will
                  execute and deliver to the Agent a Shipowner's Guarantee, a
                  Mortgage and an Assignment in respect of such Vessel in
                  substantially the same terms as those Security Documents
                  already executed in favour of and delivered to the Agent which
                  shall be accompanied by such corporate documents and legal
                  opinions as the Agent may request (and upon any sale or
                  disposal of a Shipowning Guarantor or its Vessel such
                  Shipowning Guarantor's obligations under the Security
                  Documents to which it is a party will terminate provided that
                  no Event of Default has occurred and the provisions of Clause
                  12.1.5(i) or (ii), as the case may, be have been fully
                  complied with) or (iii) any such Vessel is replaced by a
                  similar asset acceptable to the Banks in their sole discretion
                  of equal or greater value.

      12.2  Positive covenants

          12.2.1  Registration of Vessels Each of the Borrower and the Guarantor
                  undertakes to procure the maintenance of the registration of
                  the Vessels under the flags and ownerships indicated in
                  Schedule 4 for the duration of the Facility Period unless
                  otherwise approved by an Instructing Group in writing.

          12.2.2  Additional security If and so often as the aggregate of any
                  Valuations of the Vessels plus the value of any additional
                  security (other than cash) for the time being provided to the
                  Banks (or to the Agent on their behalf) pursuant to this
                  Clause shall be less than one hundred and


                                       56
<PAGE>

                  twenty per centum (120%) of the Original Dollar Amount (less
                  the amount of any cash deposited as additional security
                  pursuant to this Clause) the Borrower will, within thirty days
                  of the request of the Agent to do so, at the Borrower's
                  option:-

                  (a)   pay to the Agent or to its nominee a cash deposit in the
                        amount of the shortfall to be secured in favour of the
                        Banks (or of the Agent on their behalf) as additional
                        security for the payment of the Indebtedness; or

                  (b)   give to the Banks (or to the Agent on their behalf)
                        other additional security in amount and form acceptable
                        to the Banks in their discretion; or

                  (c)   prepay the amount of the Indebtedness which will ensure
                        that the aggregate of the Valuations of the Vessels plus
                        the value of any such additional security (other than
                        cash) is not less than one hundred and twenty per centum
                        (120%) of the Original Dollar Amount (less the amount of
                        any cash deposited as additional security pursuant to
                        this Clause).

                  For the purpose of determining the value of a Vessel under
                  this Clause, where such Vessel constitutes a Total Loss its
                  value shall be deemed to be the lesser of (i) the last
                  Valuation in respect of that Vessel prior to it becoming a
                  Total Loss or (ii) the amount of insurance proceeds expected
                  to be paid in respect of any insurance claim relating to the
                  Total Loss of such Vessel.

                  Clauses 6.3, 6.4 and 6.5 shall apply, mutatis mutandis, to any
                  prepayment made pursuant to this Clause and the value of any
                  additional security provided pursuant to this Clause shall be
                  determined by the Agent in its discretion. Provided that,
                  where the Borrower has provided additional security pursuant
                  to this Clause, the Borrower may request that the Agent obtain
                  new Valuations on a date falling not earlier than six months
                  after the date such additional security was


                                       57
<PAGE>

                  provided. Where requested by the Borrower to obtain new
                  Valuations pursuant to this Clause the Agent shall obtain such
                  new Valuations at the cost and expense of the Borrower. If the
                  aggregate of the new Valuations of the Vessels plus the value
                  of any additional security (other than cash) (the "New
                  Security Amount") is greater than one hundred and twenty per
                  cent (120%) of the Original Dollar Amount (less the amount of
                  any cash deposited as additional security pursuant to this
                  Clause) (the "Security Maintenance Amount") provided that no
                  Event of Default has occurred and is continuing, the Agent
                  (provided that the Agent shall firstly release any cash
                  collateral deposited with it pursuant to this Clause) shall
                  release to the Borrower, upon the Borrower's written request
                  and at the Borrower's expense, any such additional security as
                  the Agent selects, such that after its release the New
                  Security Amount will at least be equal to the Security
                  Maintenance Amount, provided, however, that the value of such
                  security to be released is not less than five hundred thousand
                  Dollars ($500,000). For the purposes of this Clause the
                  Borrower shall at its expense throughout the Facility Period
                  deliver to the Agent a Valuation in respect of each Vessel (i)
                  at least annually after the Execution Date and (ii) at any
                  time reasonably requested by the Agent.

          12.2.3  Financial statements The Borrower will supply to the Agent,
                  without request:-

                  (a)   its annual unaudited financial statements for each
                        financial year of the Borrower ending during the
                        Facility Period, containing (amongst other things) the
                        Borrower's profit and loss account for, and balance
                        sheet at the end of, each such financial year, prepared
                        in accordance with generally accepted accounting
                        principles and practices applicable to companies
                        incorporated in the Netherlands consistently applied, in
                        each case within one hundred and eighty days of the end
                        of the financial year to which they relate and such
                        financial statements shall accurately and fairly
                        represent the financial condition of the Borrower; and


                                       58
<PAGE>

                  (b)   on a consolidated basis:-

                        (i)   the Guarantor's annual audited accounts prepared
                              in accordance with US GAAP within one hundred and
                              eighty days of the end of the financial year to
                              which they relate and such financial statements
                              shall accurately and fairly represent the
                              financial condition of the SO Group; and

                        (ii)  the Guarantor's unaudited quarterly financial
                              statements (including cash flow analysis) not
                              later than 90 days after the end of the relevant
                              fiscal quarter; and

                  (c)   the SO Group's consolidated budget on an annual basis;
                        and

                  (d)   any financial information delivered by the Guarantor to
                        its shareholders; and

                  (e)   a cash flow projection for the following three years to
                        be provided every twelve months during the Facility
                        Period.

          12.2.4  Other information The Borrower will promptly supply to the
                  Agent copies of all financial and other information from time
                  to time given by the Guarantor to its shareholders and such
                  information and explanations as an Instructing Group may from
                  time to time reasonably require in connection with the
                  operation of the Vessels and the Borrower's and the
                  Guarantor's profit and liquidity, and will procure that the
                  Agent be given the like information and explanations relating
                  to all other Security Parties.

          12.2.5  Evidence of current COFR Without limiting the Borrower's
                  obligations under Clause 12.2.4, the Borrower will from time
                  to time on the request of the Agent provide the Agent with
                  such evidence as the Agent may reasonably require that each
                  Vessel operating in the waters of the United States of America
                  has a valid and current Certificate of


                                       59
<PAGE>

                  Financial Responsibility pursuant to the United States Oil
                  Pollution Act 1990.

          12.2.6  ISM Code compliance In respect of each Vessel at any time
                  subject to the ISM Code the Borrower will:-

                  (a)   procure that the Vessel remains for the duration of the
                        Facility Period subject to a SMS;

                  (b)   maintain a valid and current SMC for the Vessel
                        throughout the Facility Period;

                  (c)   if it is not itself the Company, procure that the
                        Company maintains a valid and current DOC throughout the
                        Facility Period;

                  (d)   promptly report to the Agent in writing of any actual or
                        threatened withdrawal, suspension, cancellation or
                        modification of the Vessel's SMC or of the Company's
                        DOC;

                  (e)   promptly report to the Agent in writing (i) any accident
                        involving a Vessel which may result in that Vessel's
                        insurers making payment directly to the Agent in
                        accordance with the relevant Security Documents or (ii)
                        any "major non-conformity", as that term is defined in
                        the Guidelines on the Implementation of the
                        International Safety Management Code by Administrations
                        adopted by the Assembly of the International Maritime
                        Organisation pursuant to Resolution A.788(19), and of
                        the steps being taken to remedy the situation; and

                  (f)   not without the prior written consent of the Agent
                        (which will not be unreasonably withheld) change the
                        identity of the Company.


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<PAGE>

          12.2.7  Guarantor's Public Listing Each of the Borrower and the
                  Guarantor shall ensure that throughout the Facility Period the
                  Guarantor shall remain a public listed company unless with the
                  prior written approval of the Banks it is owned by significant
                  and recognised corporate bodies with a corporate rating of at
                  least BBB as defined by Standard & Poor's or similar rating
                  from a rating agency acceptable to the Banks.

          12.2.8  Insurances The Borrower shall ensure that each of the Vessels
                  is fully insured upon the terms and conditions set forth in
                  the Mortgages or Deed of Covenants (as the case may be). In
                  addition, each of the Borrower and the Guarantor shall ensure
                  that its property and assets are insured against such risks
                  and in such amounts as are customary for companies engaged in
                  similar businesses.

          12.2.9  Classification The Borrower shall ensure that each Vessel is
                  classed and maintained with the highest applicable class
                  necessary to properly operate such Vessel of Lloyds Register
                  of Shipping, Det norske Veritas, the American Bureau of
                  Shipping or such other classification society acceptable to
                  the Agent and that such classification is not changed or
                  impaired in any way during the Facility Period.

          12.2.10 Certificate of Compliance The Borrower and the Guarantor shall
                  deliver to the Agent a duly executed Certificate of Compliance
                  ninety (90) days after the end of each fiscal quarter
                  occurring during the Facility Period certifying (inter alia)
                  compliance with the covenants contained in Clauses 12.2.18 and
                  12.3.1.

          12.2.11 Inspection of records The Borrower and the Guarantor will each
                  permit the inspection of its financial records and accounts
                  from time to time during business hours by the Agent or its
                  nominee.

          12.2.12 Notification of Event of Default Each of the Borrower and the
                  Guarantor will immediately notify the Agent in writing of the
                  occurrence of any Event of Default or Potential Event of
                  Default or


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                  any event which will materially adversely affect the
                  Borrower's or the Guarantor's ability to perform its
                  obligations under this Agreement or the ability of any of the
                  other Security Parties or any Principal Subsidiary to perform
                  any of their obligations under any of the Security Documents
                  to which they are a party or may become a party to.

          12.2.13 Additional Filings/Notification Each of the Borrower and the
                  Guarantor shall ensure that (i) any and all additional filings
                  referred to in the proviso to Clause 4.5 will be made and/or
                  effected promptly and within any applicable time limits
                  imposed by law and (ii) the Agent is immediately notified if
                  any of the Security Parties (a) has an established place of
                  business in the United Kingdom or the United States of America
                  at any time during the Facility Period or (b) changes the
                  place of its Chief Executive office or principal place of
                  business in the United States of America.

          12.2.14 Pari Passu Each of the Borrower and the Guarantor shall ensure
                  that their respective obligations under this Agreement shall
                  at all times rank at least pari passu with all of their other
                  present and future unsecured and unsubordinated indebtedness
                  with the exception of any obligations which are mandatorily
                  preferred by any applicable laws to companies generally and
                  not by contract.

          12.2.15 Corporate Existence Save as permitted by Clause 12.1.4, each
                  of the Borrower and the Guarantor shall ensure that throughout
                  the Facility Period each of the Security Parties shall (i)
                  remain duly formed and validly existing under the laws of its
                  respective jurisdiction of incorporation (ii) remain
                  authorised to do business in the jurisdiction in which it
                  transacts its business (iii) continue to have the power to
                  carry on its business as it is now being conducted and to
                  enter into and perform its obligations under the Security
                  Documents to which it is a party and (iv) continue to comply
                  with all statutory, regulatory and other requirements relative
                  to its business which could reasonably be


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                  expected to have a material adverse effect on its business,
                  assets or operations, financial or otherwise.

          12.2.16 Admissibility In Evidence Each of the Borrowers and the
                  Guarantor shall on the request of the Agent obtain all
                  necessary authorisations, consents, approvals, licences,
                  exemptions, filings, registrations, recordings and
                  notarisations required or advisable in connection with the
                  admissibility in evidence of the Security Documents or any of
                  them in Proceedings in England or any other jurisdiction in
                  which Proceedings have been commenced.

          12.2.17 Finance Company Status The Borrower will ensure that
                  throughout the Facility Period the Borrower will comply with
                  the regulations of the Netherlands Ministry of Finance dated 4
                  February 1993 with respect to finance companies to the extent
                  applicable and that the application of the Facility will be in
                  accordance with such regulations. The Borrower will also
                  ensure that throughout the Facility Period all notice
                  requirements to the Dutch Central Bank pursuant to the Foreign
                  Financial Relations Act ("Wet Financiele Betrekkingen
                  Buitenland") 1994, are complied with.

          12.2.18 Permitted Indebtedness The Borrower and the Guarantor shall
                  procure that throughout the Facility Period the SO Group will
                  have no indebtedness other than Permitted Indebtedness.

          12.2.19 Short Term Permitted Indebtedness The Borrower and the
                  Guarantor shall procure that throughout the Facility Period
                  the Short Term Permitted Indebtedness shall not exceed seventy
                  five million Dollars ($75,000,000) in aggregate or the
                  equivalent in any other currency.

          12.2.20 Subordinated Debt The Borrower and the Guarantor shall ensure
                  that throughout the Facility Period any Subordinated Debt (i)
                  shall not exceed one hundred million Dollars ($100,000,000) in
                  aggregate or the equivalent in any other currency, (ii) shall
                  be fully subordinated to the


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                  Indebtedness on terms contained in a Subordinated Loan
                  Agreement and acceptable to the Banks and (iii) shall not
                  permit any payment of cash interest or cash dividends
                  ("Subordinated Interest") unless the ratio of D/EBITDA at such
                  time is less than 2:1. For the purposes of this Clause 12.2.20
                  the amount of Consolidated Debt utilised in the calculation of
                  the D/EBITDA ratio shall include the application of the
                  proceeds of Subordinated Debt where such Subordinated Debt was
                  incurred during the period between the previous Margin Review
                  Date and the date for payment of Subordinated Interest.

          12.2.21 Sale of Assets The sale of assets of the SO Group shall not at
                  any time during each fiscal year falling within the Facility
                  Period exceed fifty million Dollars ($50,000,000) or the
                  equivalent in any other currency in aggregate. Notwithstanding
                  the foregoing, the maximum cumulative aggregate amount for the
                  sale of assets of the SO Group during the Facility Period
                  shall not exceed one hundred and fifty million Dollars
                  ($150,000,000) or the equivalent in any other currency. In
                  this Clause the sale of assets includes (i) contributing
                  assets to joint ventures and (ii) Vessels which are subject to
                  a Mortgage provided that where any such Vessel is sold the
                  Maximum Facility Amount is reduced by the proportionate value
                  specified in Clause 2.4.3 unless any such Vessel is replaced
                  by a similar asset (acceptable to the Banks in their sole
                  discretion) of equal or greater value. For the purposes of
                  this Clause the value of any asset sold or disposed of shall
                  be deemed to be its market value whether or not such asset was
                  sold on "an arms length basis" and sales of assets within the
                  SO Group shall not be counted.

      12.3  Guarantor's Financial Covenants

           12.3.1 Throughout the Facility Period the Guarantor shall:-

                  (a)   maintain a Consolidated Tangible Net Worth of not less
                        than $500,000,000 or the equivalent in any other
                        currency which shall be increased on an annual basis
                        calculated as of the end of each fiscal year by an
                        amount equal to 50% of annual


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                        consolidated net income (to the extent positive) from
                        the Execution Date;

                  (b)   maintain a Consolidated Debt to Consolidated Tangible
                        Net Worth ratio of a maximum of 1.00:1.00 as calculated
                        at the end of each fiscal quarter;

                  (c)   on a rolling four fiscal quarter basis, maintain a
                        D/EBITDA ratio of a maximum of:-

                        4.25:1 during the period commencing on the Execution
                        Date and ending 31 May 2001;

                        4.00:1 during the period commencing on 1 June 2001 and
                        ending on 30 November 2001;

                        3.50:1 during the period commencing on 1 December 2001
                        and ending on 30 November 2002;

                        3:00:1 during the period commencing on 1 December 2002
                        and ending on the last day of the Facility Period; and

                  (d)   ensure that any inter-company debt due from SNSA or any
                        of its Subsidiaries (not including the SO Group) to the
                        SO Group does not at any one time exceed fifty million
                        Dollars ($50,000,000) in aggregate or its equivalent
                        amount in any other currency.

                  For the purposes of this Clause 12.3.1 Subordinated Debt in an
                  amount of up to one hundred million Dollars ($100,000,000) or
                  the equivalent in any other currency shall not be included in
                  the calculation of (i) Consolidated Debt to Consolidated
                  Tangible Net Worth and (ii) D/EBITDA.

                  (e)   Notwithstanding Clause 12.2.19, the Guarantor shall be
                        permitted to incur additional indebtedness ("Additional
                        Permitted


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                        Indebtedness") (i) in an amount of up to the difference
                        between four hundred and forty million Dollars
                        ($440,000,000) and the Maximum Facility Amount permitted
                        at such time and (ii) for acquisitions and/or capital
                        expenditure if on a pro forma basis D/EBITDA does not
                        exceed the ratios specified in Clause 12.3.1. (c) and no
                        Event of Default has occurred and is continuing.

13    Earnings

      13.1  Remittance of earnings Immediately upon the occurrence of an Event
            of Default, the Borrower shall procure that all Earnings are paid to
            such account(s) as the Agent shall from time to time specify by
            notice in writing to the Borrower.

14    Events Of Default

      14.1  The Agent's rights If any of the events set out in Clause 14.2
            occurs, and such event remains unremedied for fourteen (14) days
            after notice thereof has been given by the Agent to the Borrower
            (except in relation to any of the events described in Clauses
            14.2.1, 14.2.2, 14.2.4, 14.2.5, 14.2.6 and 14.2.18 where such remedy
            period shall not apply) the Agent may at its discretion by notice to
            the Borrower declare the Banks to be under no further obligation to
            the Borrower under or pursuant to this Agreement and may declare all
            or any part of the Indebtedness (including such unpaid interest as
            shall have accrued) to be immediately payable, whereupon the
            Indebtedness (or the part of the Indebtedness referred to in the
            Agent's notice) shall immediately become due and payable without any
            further demand or notice of any kind.

      14.2  Events of Default The events referred to in Clause 14.1 are:-

          14.2.1  payment default if the Borrower defaults in the payment of any
                  part of the Indebtedness when due; or

          14.2.2  other default if any of the Security Parties fails to observe
                  or perform any of the covenants, conditions, undertakings,
                  agreements or obligations on its part contained in any of the
                  Security Documents or shall in any other way be in breach of
                  or do or cause to be done any act


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                  repudiating or evidencing an intention to repudiate any of the
                  Security Documents and such default (if in the reasonable
                  opinion of the Instructing Group capable of remedy) is not
                  remedied within fourteen (14) days after notice of the default
                  has been given to the Borrower; or

          14.2.3  misrepresentation or breach of warranty if any representation,
                  warranty or statement made, deemed to be made, or repeated
                  under any of the Security Documents or in any accounts,
                  certificate, notice instrument, written statement or opinion
                  delivered by a Security Party under or in connection with any
                  Security Document is incorrect in any material respect when
                  made, deemed to be made or repeated; or

          14.2.4  execution if a distress or execution or other process of a
                  court or authority is levied on any of the property of any of
                  the Security Parties or any of the Principal Subsidiaries
                  before or after final judgment or by order of any competent
                  court or authority for an amount in excess of ten million
                  Dollars ($10,000,000) or, its equivalent in any other currency
                  and is not satisfied or stayed (with a view to being contested
                  in good faith) within fourteen days of levy; or

          14.2.5  insolvency events if any of the Security Parties or any of the
                  Principal Subsidiaries:-

                  (a)   resolves to appoint, or applies for, or consents to the
                        appointment of, a receiver, administrative receiver,
                        trustee, administrator or liquidator of itself or of all
                        or part of its assets other than for the purposes of a
                        merger or amalgamation pursuant to Clause 12.1.4; or

                  (b)   is unable or admits its inability to pay its debts as
                        they fall due; or

                  (c)   makes a general assignment for the benefit of creditors;
                        or

                  (d)   ceases trading or threatens to cease trading; or


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                  (e)   has appointed an Inspector under the Companies Act 1985
                        or any statutory provision which the Agent in its
                        discretion considers analogous thereto; or

          14.2.6  insolvency proceedings if any proceedings are commenced or
                  threatened, or any order or judgment is given by any court,
                  for the bankruptcy, liquidation, winding up, administration or
                  re-organisation of any of the Security Parties or any of the
                  Principal Subsidiaries or for the appointment of a receiver,
                  administrative receiver, administrator, liquidator or trustee
                  of any of the Security Parties or any of the Principal
                  Subsidiaries or of all or part of the assets of any of the
                  Security Parties or any of the Principal Subsidiaries, or if
                  any person appoints or purports to appoint such receiver,
                  administrative receiver, administrator, liquidator or trustee
                  which proceeding is not discharged within thirty (30) days of
                  its commencement; or

          14.2.7  impossibility or illegality unless covered by Clause 17.7, if
                  any event occurs which would, or would with the passage of
                  time, render performance of any of the Security Documents
                  impossible, unlawful or unenforceable by the Banks or the
                  Agent; or

          14.2.8  conditions subsequent if any of the conditions set out in
                  Clause 3.2 is not satisfied within the time reasonably
                  required by the Agent with respect to the conditions referred
                  to at Clauses 3.2.1-3.2.5 inclusive and within twelve (12)
                  months with respect to the condition referred to at Clause
                  3.2.6 except where such condition has not been satisfied due
                  to an act or omission on the part of a Finance Party; or

          14.2.9  revocation or modification of consents etc. if any material
                  consent, licence, approval or authorisation which is now or
                  which at any time during the Facility Period becomes necessary
                  to enable any of the Security Parties to comply with any of
                  their obligations in or pursuant to any of the Security
                  Documents is revoked, withdrawn or withheld, or modified in a
                  manner which the Agent reasonably considers is, or may be,
                  prejudicial to the interests of the Banks in a material
                  manner, or any


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                  material consent, licence, approval or authorisation ceases to
                  remain in full force and effect; or

          14.2.10 curtailment of business if the business of any of the Security
                  Parties is wholly or partially curtailed by any intervention
                  by or under authority of any government, or if all or a
                  substantial part of the undertaking, property or assets of any
                  of the Security Parties (other than a Vessel if it is that
                  Security Party's only asset) is seized, nationalised,
                  expropriated or compulsorily acquired by or under authority of
                  any government or any Security Party disposes or threatens to
                  dispose of a substantial part of its business or assets; or

          14.2.11 loss of Vessel if any Vessel, or any such other vessel which
                  may from time to time be mortgaged to the Banks (or to the
                  Agent on their behalf) as security for the repayment of all or
                  any part of the Indebtedness is destroyed, abandoned,
                  confiscated, forfeited, condemned as prize or otherwise
                  becomes a Total Loss, except that a Total Loss shall not be an
                  Event of Default if:-

                  (a)   such Vessel or such other vessel (as the case may be) is
                        insured in accordance with the Security Documents; and

                  (b)   no insurer has refused to meet or has disputed the claim
                        for Total Loss and it is not apparent to the Agent in
                        its discretion that any such refusal or dispute is
                        likely to occur; and

                  (c)   payment of all insurance proceeds in respect of the
                        Total Loss (as required by Clause 6.6.) is made in full
                        to the Agent on behalf of the Banks in accordance with
                        Clause 6.6; or

          14.2.12 acceleration of other indebtedness if any other indebtedness
                  or obligation for borrowed money of any of the Security
                  Parties or any Principal Subsidiary becomes due or capable of
                  being declared due prior to its stated maturity by reason of
                  default on the part of that Security Party or Principal
                  Subsidiary (as the case may be), or is not repaid or satisfied
                  on the due date for its repayment or any such other loan,


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<PAGE>

                  guarantee or indebtedness becomes enforceable save, in either
                  case, for amounts of less than five million Dollars
                  ($5,000,000) in aggregate, or its equivalent in any other
                  currency, and claims contested in good faith; or

          14.2.13 reduction of capital if any of the Security Parties except the
                  Guarantor reduces its authorised or issued or subscribed
                  capital except reductions effected in compliance with Clause
                  12.1.4; or

          14.2.14 challenge to registration if the registration of any Vessel or
                  any Mortgage becomes void or voidable or liable to
                  cancellation or termination; or

          14.2.15 war if the country of registration of any Vessel becomes
                  involved in war (whether or not declared) or civil war or is
                  occupied by any other power and the Agent reasonably considers
                  that, as a result, the security conferred by the Security
                  Documents is materially prejudiced; or

          14.2.16 notice of termination if the Guarantor or any Shipowning
                  Guarantor gives notice to the Agent to determine its
                  obligations under the Guarantee or the Shipowner's Guarantee,
                  as appropriate; or

          14.2.17 claim against the Guarantor's assets except for Permitted
                  Liens, if a maritime or other lien, arrest distress or similar
                  charge is levied upon or against any Vessel or any substantial
                  part of the assets of the Guarantor (on a consolidated basis)
                  and such is not discharged within fourteen (14) Business Days
                  after any Security Party or Principal Subsidiary (as the case
                  may be) has become aware of the same; or

          14.2.18 Guarantor's business if all or a substantial part of the
                  Guarantor's business is destroyed, abandoned, seized,
                  appropriated or forfeited for any reason; or

          14.2.19 ownership if (i) the Borrower ceases to be 100% directly owned
                  by Stolt Offshore A/S or 100% indirectly owned by the
                  Guarantor and (ii)


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                  any Shipowning Guarantor ceases to be 100% directly or
                  indirectly owned by the Guarantor; or

          14.2.20 final judgements if any of the Security Parties fails to
                  comply with any non appealable court order or fails to pay a
                  final unappealable judgement against it, in either case, in
                  excess of ten million Dollars ($10,000,000) which remains
                  unsettled for fourteen (14) days; or

          14.2.21 third party charters if any Vessel which is on charter to a
                  member of the SO Group is chartered for a period of twelve
                  (12) months or more to a person who is not a member of the SO
                  Group.

15    Set-Off and Lien

      15.1  Set-off Each of the Borrower and the Guarantor irrevocably
            authorises the Finance Parties at any time after all or any part of
            the Indebtedness shall have become due and payable to set off
            without notice any liability of the Borrower or the Guarantor (as
            the case may be) to any of the Finance Parties (whether present or
            future, actual or contingent, and irrespective of the branch or
            office, currency or place of payment) against any credit balance
            from time to time standing on any account of the Borrower or the
            Guarantor (as the case may be) (whether current or otherwise and
            whether or not subject to notice) with any branch of any of the
            Finance Parties in or towards satisfaction of the Indebtedness and,
            in the name of that Finance Party, the Borrower or the Guarantor (as
            the case may be), to do all acts (including, without limitation,
            converting or exchanging any currency) and execute all documents
            which may be required to effect such application.

      15.2  Lien If an Event of Default has occurred and is continuing, each
            Finance Party shall have a lien on and be entitled to retain and
            realise as additional security for the repayment of the Indebtedness
            any cheques, drafts, bills, notes or negotiable or non-negotiable
            instruments and any stocks, shares or marketable or other securities
            and property of any kind of the Borrower or the Guarantor (or of
            that Finance Party as agent or nominee of the Borrower or the
            Guarantor) from time to time held by that Finance Party, whether for
            safe custody or otherwise.


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      15.3  Restrictions on withdrawal Despite any term to the contrary in
            relation to any deposit or credit balance at any time on any account
            of the Borrower or the Guarantor (as the case may be) with any of
            the Finance Parties, no such deposit or balance shall be repayable
            or capable of being assigned, mortgaged, charged or otherwise
            disposed of or dealt with by the Borrower or the Guarantor (as the
            case may be) after an Event of Default has occurred and while such
            Event of Default is continuing, but any Finance Party may from time
            to time permit the withdrawal of all or any part of any such deposit
            or balance without affecting the continued application of this
            Clause.

      15.4  Application Whilst an Event of Default is continuing, each of the
            Borrower and the Guarantor irrevocably authorises the Agent to apply
            all sums which the Agent may receive:-

          15.4.1  pursuant to a sale or other disposition of a Vessel or any
                  right, title or interest in a Vessel; or

          15.4.2  by way of payment to the Agent of any sum in respect of the
                  Insurances, Earnings or Requisition Compensation of a Vessel;
                  or

          15.4.3  otherwise arising under or in connection with any of the
                  Security Documents

            in or towards satisfaction, or by way of retention on account, of
            the Indebtedness, in such manner as the Agent may in its discretion
            determine.

16    Assignment and Sub-Participation

      16.1  Right to assign Each of the Banks may assign or transfer all or any
            of its rights under or pursuant to the Security Documents to any
            other branch of that Bank or to any other bank or financial
            institution, and may grant sub-participations in all or any part of
            its Commitment provided that the Borrower and the Agent consent to
            such assignment or transfer (such consent not to be unreasonably
            withheld or delayed) and such assignment or transfer does not result
            in the Borrower being subject to any additional Tax or other
            financial or legal obligations other than those contemplated by the
            terms of this Agreement at the time of such assignment or transfer.


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<PAGE>

      16.2  Borrower's co-operation Each of the Borrower and the Guarantor will
            co-operate fully with the Banks in connection with any assignment,
            transfer or sub-participation pursuant to Clause 16.1; will execute
            and procure the execution of such documents as the Banks may require
            in connection therewith; and irrevocably authorises each of the
            Finance Parties to disclose to any proposed assignee, transferee or
            sub-participant (whether before or after any assignment, transfer or
            sub-participation and whether or not any assignment, transfer or
            sub-participation shall take place) all information relating to the
            Security Parties, the Facility or the Security Documents which each
            such Finance Party may in its discretion consider necessary or
            desirable (subject to any duties of confidentiality applicable to
            the Banks generally).

      16.3  Rights of assignee Any assignee, transferee or sub-participant of a
            Bank shall (unless limited by the express terms of the assignment,
            transfer or sub-participation) take the full benefit of every
            provision of the Security Documents benefiting that Bank.

      16.4  Transfer Certificates If any Bank wishes to transfer all or any of
            its Commitment as contemplated in Clause 16.1 then such transfer may
            be effected by the delivery to the Agent of a duly completed and
            duly executed Transfer Certificate in which event, on the later of
            the Transfer Date specified in such Transfer Certificate and the
            fifth Business Day after the date of delivery of such Transfer
            Certificate to the Agent:

          16.4.1  to the extent that in such Transfer Certificate the Bank which
                  is a party thereto seeks to transfer its Commitment in whole,
                  the Borrower and such Bank shall be released from further
                  obligations towards each other under this Agreement and their
                  respective rights against each other shall be cancelled other
                  than existing claims against such Bank for breach of this
                  Agreement (such rights, benefits and obligations being
                  referred to in this Clause 16.4 as "discharged rights and
                  obligations");

          16.4.2  the Borrower and the Transferee which is a party thereto shall
                  assume obligations towards one another and/or acquire rights
                  against one another which differ from such discharged rights
                  and obligations only insofar as


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                  the Borrower and such Transferee have assumed and/or acquired
                  the same in place of the Borrower and such Bank; and

          16.4.3  the Agent, the Arrangers, the Syndication Agents, the
                  Transferee and the other Banks shall acquire the same rights
                  and benefits and assume the same obligations between
                  themselves as they would have acquired and assumed had such
                  Transferee been an original party to this Agreement as a Bank
                  with the rights, benefits and/or obligations acquired or
                  assumed by it as a result of such transfer.

      16.5  Power of Attorney In order to give effect to each Transfer
            Certificate the Finance Parties and the Borrower each hereby
            irrevocably and unconditionally appoint the Agent as its true and
            lawful attorney with full power to execute on their respective
            behalves each Transfer Certificate delivered to the Agent pursuant
            to Clause 16.4 without the Agent being under any obligation to take
            any further instructions from or give any prior notice to, any of
            the Finance Parties or, subject to the Borrower's rights under
            Clause 16.1, the Borrower before doing so and the Agent shall so
            execute each such Transfer Certificate on behalf of the other
            Finance Parties and the Borrower immediately on its receipt of the
            same pursuant to Clause 16.4.

      16.6  Notification The Agent shall promptly notify the other Finance
            Parties, the Transferee and the Borrower on the execution by it of
            any Transfer Certificate together with details of the amount
            transferred, the Transfer Date and the parties to such transfer.

17    Payments, Mandatory Prepayment, Reserve Requirements and Illegality

      17.1  Payments All amounts payable by the Borrower and the Guarantor under
            or pursuant to any of the Security Documents shall be paid to such
            accounts at such banks as the Agent may from time to time direct to
            the Borrower or the Guarantor (as the case may be), and (unless
            payable in any other Currency of Account) shall be paid in Dollars
            in same day funds (or such funds as are required by the authorities
            in the United States of America for settlement of international
            payments for immediate value). Payments shall be deemed to have been
            received


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            by the Agent on the date on which the Agent receives authenticated
            advice of receipt, unless that advice is received by the Agent on a
            day other than a Business Day or at a time of day (whether on a
            Business Day or not) when the Agent in its reasonable discretion
            considers that it is impossible or impracticable for the Agent to
            utilise the amount received for value that same day, in which event
            the payment in question shall be deemed to have been received by the
            Agent on the Business Day next following the date of receipt of
            advice by the Agent.

      17.2  No deductions or withholdings All payments (whether of principal or
            interest or otherwise) to be made by the Borrower and/or the
            Guarantor pursuant to the Security Documents shall, subject only to
            Clause 17.3, be made free and clear of and without deduction for or
            on account of any Taxes or other deductions, withholdings,
            restrictions, conditions or counterclaims of any nature, and neither
            the Borrower nor the Guarantor will claim any equity in respect of
            any payment due from it to the Banks or to the Agent under or in
            relation to any of the Security Documents.

      17.3  Grossing-up If at any time any law requires (or is interpreted to
            require) the Borrower or the Guarantor to make any deduction or
            withholding from any payment, or to change the rate or manner in
            which any required deduction or withholding is made, the Borrower or
            the Guarantor (as the case may be) will promptly notify the Agent
            and, simultaneously with making that payment, will pay to the Agent
            whatever additional amount (after taking into account any additional
            Taxes on, or deductions or withholdings from, or restrictions or
            conditions on, that additional amount) is necessary to ensure that,
            after making the deduction or withholding, the Agent and the Banks
            receive a net sum equal to the sum which they would have received
            had no deduction or withholding been made.

      17.4  Evidence of deductions If at any time either the Borrower or the
            Guarantor is required by law to make any deduction or withholding
            from any payment to be made by it pursuant to any of the Security
            Documents, the Borrower or the Guarantor (as the case may be) will
            pay the amount required to be deducted or withheld to the relevant
            authority within the time allowed under the applicable law and will,
            no later than thirty days after making that payment, deliver to the


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            Agent an original receipt issued by the relevant authority, or other
            evidence reasonably acceptable to the Agent, evidencing the payment
            to that authority of all amounts required to be deducted or
            withheld. If the Borrower makes any deduction or withholding from
            any payment under or pursuant to any of the Security Documents, and
            a Bank subsequently receives a refund or allowance from any tax
            authority which that Bank identifies as being referable to that
            deduction or withholding, that Bank shall, as soon as reasonably
            practicable, pay to the Borrower an amount equal to the amount of
            the refund or allowance received, if and to the extent that it may
            do so without prejudicing its right to retain that refund or
            allowance and without putting itself in any worse financial position
            than that in which it would have been had the deduction or
            withholding not been required to have been made. Nothing in this
            Clause shall be interpreted as imposing any obligation on any Bank
            unless requested by the Borrower to apply for any refund or
            allowance nor as restricting in any way the manner in which any Bank
            organises its tax affairs, nor as imposing on any Bank any
            obligation to disclose to the Borrower any information regarding its
            tax affairs or tax computations. All costs and expenses incurred by
            any Bank in obtaining or seeking to obtain a refund or allowance
            from any tax authority pursuant to this Clause shall be for the
            Borrower's account.

      17.5  Adjustment of due dates If any payment to be made under any of the
            Security Documents, other than a payment of interest on the
            Facility, shall be due on a day which is not a Business Day, that
            payment shall be made on the next succeeding Business Day (unless
            the next succeeding Business Day falls in the next calendar month in
            which event the payment shall be made on the next preceding Business
            Day). Any such variation of time shall be taken into account in
            computing any interest in respect of that payment.

      17.6  Change in law If, by reason of the introduction of any law, or any
            change in any law, or the interpretation or administration of any
            law, or in compliance with any request or requirement from any
            central bank or any fiscal, monetary or other authority:-


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<PAGE>

          17.6.1  any Finance Party (or the holding company of any Finance
                  Party) shall be subject to any Tax with respect to payments of
                  all or any part of the Indebtedness; or

          17.6.2  the basis of Taxation of payments to any Finance Party in
                  respect of all or any part of the Indebtedness shall be
                  changed; or

          17.6.3  any reserve requirements shall be imposed, modified or deemed
                  applicable against assets held by or deposits in or for the
                  account of or loans by any branch of any Finance Party or its
                  direct or indirect holding company; or

          17.6.4  any ratio (whether cash, capital adequacy, liquidity or
                  otherwise) which any Finance Party or its direct or indirect
                  holding company is required or requested to maintain shall be
                  affected; or

          17.6.5  there is imposed on any Finance Party (or on the direct or
                  indirect holding company of any Finance Party) any other
                  condition in relation to the Indebtedness or the Security
                  Documents;

            and the result of any of the above shall be to increase the cost to
            any Bank (or to the direct or indirect holding company of any Bank)
            of that Bank making or maintaining its Commitment or its Drawing, or
            to cause any Finance Party to suffer (in its reasonable opinion) a
            material reduction in the rate of return on its overall capital
            below the level which it reasonably anticipated at the date of this
            Agreement and which it would have been able to achieve but for its
            entering into this Agreement and/or performing its obligations under
            this Agreement, the Finance Party affected shall notify the Agent
            and, on demand to the Borrower by the Agent, the Borrower shall from
            time to time pay to the Agent for the account of the Finance Party
            affected the amount which shall compensate that Finance Party or the
            Agent (or the relevant holding company) for such additional cost or
            reduced return. A certificate signed by an authorised signatory of
            the Agent or of the Finance Party affected setting out the amount of
            that payment and the basis of its calculation shall be submitted to
            the Borrower and shall be conclusive evidence of such amount save
            for manifest error or on any question of law.


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<PAGE>

      17.7  Illegality and impracticality Notwithstanding anything contained in
            the Security Documents, the obligations of a Bank to advance or
            maintain the Facility shall terminate in the event that a change in
            any law or in the interpretation of any law by any authority charged
            with its administration shall make it unlawful for that Bank to
            advance or maintain its Commitment. In such event the Bank affected
            shall notify the Agent and the Agent shall, by written notice to the
            Borrower, declare the Banks' obligations to be immediately
            terminated. If all or any part of the Facility shall have been
            advanced by the Banks to the Borrower, the Indebtedness (including
            all accrued interest) shall be prepaid within thirty days from the
            date of such notice. Clause 6.3 shall apply to that prepayment if it
            is made on a day other than the last day of an Interest Period.
            During that period, the affected Bank shall negotiate in good faith
            with the Borrower to find an alternative method or lending base in
            order to maintain the Facility.

      17.8  Changes in market circumstances If at any time a Bank determines
            (which determination shall be final and conclusive and binding on
            the Borrower) that, by reason of changes affecting the London
            Interbank market, adequate and fair means do not exist for
            ascertaining the rate of interest on the Facility or any part
            thereof pursuant to this Agreement:-

          17.8.1  that Bank shall give notice to the Agent and the Agent shall
                  give notice to the Borrower of the occurrence of such event;
                  and

          17.8.2  the Agent shall as soon as reasonably practicable certify to
                  the Borrower in writing the effective cost to that Bank of
                  maintaining its Commitment for such further period as shall be
                  selected by that Bank and the rate of interest payable by the
                  Borrower for that period; or, if that is not acceptable to the
                  Borrower,

          17.8.3  the Agent in accordance with instructions from that Bank and
                  subject to that Bank's approval of any agreement between the
                  Agent and the Borrower, will negotiate with the Borrower in
                  good faith with a view to modifying this Agreement to provide
                  a substitute basis for that Bank's


                                       78
<PAGE>

                  Commitment which is financially a substantial equivalent to
                  the basis provided for in this Agreement.

            If, within thirty days of the giving of the notice referred to in
            Clause 17.8.1, the Borrower and the Agent fail to agree in writing
            on a substitute basis for such Bank's Commitment the Borrower will
            immediately prepay in the relevant Permitted Currency or Currencies
            the amount of such Bank's Commitment and the Maximum Facility Amount
            will automatically decrease by the amount of such Commitment and
            such decrease shall not be reversed. Clause 6.3 shall apply to that
            prepayment if it is made on a day other than the last day of an
            Interest Period.

      17.9  Non-availability of currency Subject to the procedure set forth in
            Clause 5.3, if a Bank is for any reason unable to obtain Dollars or
            any other Permitted Currency in the London Interbank market and is,
            as a result, or as a result of any other contingency affecting the
            London Interbank market, unable to advance or maintain its
            Commitment in Dollars or in any other Permitted Currency, that Bank
            shall give notice to the Agent and the Agent shall give notice to
            the Borrower and that Bank's obligations to make the Facility
            available shall immediately cease. In that event, if all or any part
            of the Facility shall have been advanced by that Bank to the
            Borrower, the Agent in accordance with instructions from that Bank
            and subject to that Bank's approval of any agreement between the
            Agent and the Borrower, will negotiate with the Borrower in good
            faith with a view to establishing a mutually acceptable basis for
            funding the Facility or relevant part thereof from an alternative
            source and/or in an alternative Permitted Currency. If the Agent and
            the Borrower have failed to agree in writing on a basis for funding
            the Facility or relevant part thereof from an alternative source
            and/or in an alternative Permitted Currency by 11.00 a.m. on the
            second Business Day prior to the end of the then current relevant
            Interest Period, the Borrower will (without prejudice to its other
            obligations under or pursuant to this Agreement, including, without
            limitation, its obligation to pay interest on the Facility, arising
            on the expiry of the then relevant Interest Period) prepay the
            Indebtedness to the Agent on behalf of that Bank on the expiry of
            the then current relevant Interest Period.


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<PAGE>

18    Communications

      18.1  Method Except for Communications pursuant to Clause 11, which shall
            be made or given in accordance with Clause 11.20, any Communication
            may be given, delivered, made or served (as the case may be) under
            or in relation to this Agreement by letter or fax and shall be in
            the English language and sent addressed:-

          18.1.1  in the case of any of the Finance Parties to the Agent at its
                  address at the head of this Agreement (fax no: + (212)
                  681-3900) marked for the attention of: Shipping Department;
                  and

          18.1.2  in the case of the Borrower and/or the Guarantor to the
                  Communications Address with a copy to McLaughlin & Stern, LLP,
                  260 Madison Avenue, New York, NY 10016, (fax no: + (212)
                  448-6260) Attention: John E. Greenwood, provided that the
                  failure to deliver such copy shall not affect the rights of
                  any party under this Agreement;

            or to such other address or fax number as the Finance Parties, the
            Borrower or the Guarantor may designate for themselves by written
            notice to the others.

      18.2  Timing A Communication shall be deemed to have been duly given,
            delivered, made or served to or on, and received by a party to this
            Agreement:-

          18.2.1  in the case of a fax when the sender receives one or more
                  transmission reports showing the whole of the Communication to
                  have been transmitted to the correct fax number;

          18.2.2  if delivered to an officer of the relevant party or (in the
                  case of the Borrower and/or the Guarantor) left at the
                  Communications Address at the time of delivery or leaving; or

          18.2.3  if posted, at 9.00 a.m. on the third Business Day after
                  posting by prepaid first class post.


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<PAGE>

            Any Communication by fax shall be promptly confirmed in writing by
            post or hand delivery.

19    General Indemnities

      19.1  Currency In the event of any Finance Party receiving or recovering
            any amount payable under any of the Security Documents in a currency
            other than the Currency of Account, and if the amount received or
            recovered is insufficient when converted into the Currency of
            Account at the date of receipt to satisfy in full the amount due,
            the Borrower and/or the Guarantor (as the case may be) shall, on the
            Agent's written demand, pay to the Agent such further amount in the
            Currency of Account as is sufficient to satisfy in full the amount
            due and that further amount shall be due to the Agent on behalf of
            the Finance Parties as a separate debt under this Agreement.

      19.2  Costs and expenses Each of the Borrower and the Guarantor will,
            within fourteen days of the Agent's written demand, reimburse the
            Agent (on behalf of each of the Finance Parties) for all reasonable
            out of pocket expenses including internal and external legal costs
            (including Value Added Tax or any similar or replacement tax if
            applicable) of and incidental to:-

          19.2.1  the negotiation, syndication, preparation, execution and
                  registration of the Security Documents (whether or not any of
                  the Security Documents are actually executed or registered and
                  whether or not all or any part of the Facility is advanced);

          19.2.2  any amendments, addenda or supplements to any of the Security
                  Documents (whether or not completed);

          19.2.3  any other documents which may at any time be required by any
                  Finance Party to give effect to any of the Security Documents
                  or which any Finance Party is entitled to call for or obtain
                  pursuant to any of the Security Documents (including, without
                  limitation, all premiums and other sums from time to time
                  payable by the Agent in relation to the Mortgagees'
                  Insurances); and


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<PAGE>

          19.2.4  the exercise of the rights, powers, discretions and remedies
                  of the Finance Parties under or pursuant to the Security
                  Documents.

      19.3  Events of Default Each of the Borrower and the Guarantor shall
            indemnify the Finance Parties from time to time on demand against
            all losses and costs incurred or sustained by any Finance Party as a
            consequence of any Event of Default, including (without limitation)
            any Break Costs.

      19.4  Funding costs Each of the Borrower and the Guarantor shall indemnify
            the Finance Parties from time to time on demand against all losses
            and costs incurred or sustained by any Finance Party if, for any
            reason due to a default or other action by the Borrower, any Drawing
            is not advanced to the Borrower after the relevant Drawdown Notice
            has been given to the Agent, or is advanced on a date other than
            that requested in the Drawdown Notice, including (without
            limitation) any Break Costs.

      19.5  Protection and enforcement Each of the Borrower and the Guarantor
            shall indemnify the Finance Parties from time to time on demand
            against all losses, costs and liabilities which any Finance Party
            may from time to time sustain, incur or become liable for in or
            about the protection, maintenance or enforcement of the rights
            conferred on the Finance Parties by the Security Documents or in or
            about the exercise or purported exercise by the Finance Parties of
            any of the rights, powers, discretions or remedies vested in them
            under or arising out of the Security Documents, including (without
            limitation) any losses, costs and liabilities which any Finance
            Party may from time to time sustain, incur or become liable for by
            reason of any Finance Party being mortgagees of any Vessel and/or a
            lender to the Borrower, or by reason of any Finance Party being
            deemed by any court or authority to be an operator or controller, or
            in any way concerned in the operation or control, of any Vessel. No
            such indemnity will be given to a Finance Party where any such loss,
            cost or liability has occurred due to gross negligence or wilful
            misconduct on the part of that Finance Party however this shall not
            affect the right of any other Finance Party to receive any such
            indemnity.


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<PAGE>

      19.6  Liabilities of Finance Parties Each of the Borrower and the
            Guarantor will from time to time reimburse the Finance Parties on
            demand for all sums which any Finance Party may pay on account of
            any of the Security Parties or in connection with any Vessel
            (whether alone or jointly or jointly and severally with any other
            person) including (without limitation) all sums which any Finance
            Party may pay or guarantees which any Finance Party may give in
            respect of the Insurances, any expenses incurred by any Finance
            Party in connection with the maintenance or repair of any Vessel or
            in discharging any lien, bond or other claim relating in any way to
            any Vessel, and any sums which any Finance Party may pay or
            guarantees which they may give to procure the release of any Vessel
            from arrest or detention.

      19.7  Taxes Each of the Borrower and the Guarantor shall pay all Taxes to
            which all or any part of the Indebtedness or any of the Security
            Documents may be at any time subject and shall indemnify the Finance
            Parties on demand against all liabilities, costs, claims and
            expenses resulting from any omission to pay or delay in paying any
            such Taxes. The indemnity contained in this Clause shall survive the
            repayment of the Indebtedness.

20    Miscellaneous

      20.1  Waivers No failure or delay on the part of the any Finance Party in
            exercising any right, power, discretion or remedy under or pursuant
            to any of the Security Documents, nor any actual or alleged course
            of dealing between any Finance Party and any of the Security
            Parties, shall operate as a waiver of, or acquiescence in, any
            default on the part of any Security Party, unless expressly agreed
            to do so in writing by the Agent, nor shall any single or partial
            exercise by any Finance Party of any right, power, discretion or
            remedy preclude any other or further exercise of that right, power,
            discretion or remedy, or the exercise by a Finance Party of any
            other right, power, discretion or remedy.

      20.2  No oral variations No variation or amendment of any of the Security
            Documents shall be valid unless in writing and signed on behalf of
            the Finance Parties and the relevant Security Party.


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<PAGE>

      20.3  Severability If at any time any provision of any of the Security
            Documents is invalid, illegal or unenforceable in any respect that
            provision shall be severed from the remainder and the validity,
            legality and enforceability of the remaining provisions shall not be
            affected or impaired in any way.

      20.4  Successors etc. The Security Documents shall be binding on the
            Security Parties and on their successors and permitted transferees
            and assignees, and shall inure to the benefit of the Finance Parties
            and their respective successors, transferees and assignees. Neither
            the Borrower nor the Guarantor may assign or transfer any of its
            rights or duties under or pursuant to any of the Security Documents
            without the prior written consent of the Banks.

      20.5  Further assurance If any provision of the Security Documents shall
            be invalid or unenforceable in whole or in part by reason of any
            present or future law or any decision of any court, or if the
            documents at any time held by the Finance Parties on their behalf
            are considered by the Banks for any reason insufficient to carry out
            the terms of this Agreement, then from time to time the Borrower
            and/or the Guarantor (as the case may be) will promptly, on demand
            by the Agent, execute or procure the execution of such further
            documents as in the reasonable opinion of the Banks are necessary to
            provide adequate security for the repayment of the Indebtedness.

      20.6  Other arrangements The Finance Parties may, without prejudice to
            their rights under or pursuant to the Security Documents, at any
            time and from time to time, on such terms and conditions as they may
            in their discretion determine, and without notice to either the
            Borrower or the Guarantor, grant time or other indulgence to, or
            compound with, any other person liable (actually or contingently) to
            the Finance Parties or any of them in respect of all or any part of
            the Indebtedness, and may release or renew negotiable instruments
            and take and release securities and hold funds on realisation or
            suspense account without affecting the liabilities of the Borrower
            and/or the Guarantor (as the case may be) or the rights of the
            Finance Parties under or pursuant to the Security Documents.

      20.7  Advisers The Borrower and the Guarantor irrevocably authorise the
            Agent, at any time and from time to time during the Facility Period,
            to consult insurance


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<PAGE>

            advisers on any matters relating to the Insurances, including,
            without limitation, the collection of insurance claims, and from
            time to time to consult or retain advisers or consultants to monitor
            or advise on any other claims relating to the Vessels. The Borrower
            and the Guarantor will provide such advisers and consultants with
            all information and documents which they may from time to time
            reasonably require and will reimburse the Agent on demand for all
            reasonable costs and expenses incurred by the Agent in connection
            with the consultation or retention of such advisers or consultants.

      20.8  Delegation The Finance Parties may at any time and from time to time
            delegate to any person any of their rights, powers, discretions and
            remedies pursuant to the Security Documents, other than rights
            relating to actions to be taken by an Instructing Group or the Banks
            as a group on such terms as they may consider appropriate (including
            the power to sub-delegate).

      20.9  Rights etc. cumulative Every right, power, discretion and remedy
            conferred on the Finance Parties under or pursuant to the Security
            Documents shall be cumulative and in addition to every other right,
            power, discretion or remedy to which they may at any time be
            entitled by law or in equity. The Finance Parties may exercise each
            of their rights, powers, discretions and remedies as often and in
            such order as they deem appropriate subject to obtaining the prior
            written consent of an Instructing Group. The exercise or the
            beginning of the exercise of any right, power, discretion or remedy
            shall not be interpreted as a waiver of the right to exercise any
            other right, power, discretion or remedy either simultaneously or
            subsequently.

      20.10 No enquiry The Finance Parties shall not be concerned to enquire
            into the powers of the Security Parties or of any person purporting
            to act on behalf of any of the Security Parties, even if any of the
            Security Parties or any such person shall have acted in excess of
            their powers or if their actions shall have been irregular,
            defective or informal, whether or not any Finance Parties had notice
            thereof.

      20.11 Continuing security The security constituted by the Security
            Documents shall be continuing and shall not be satisfied by any
            intermediate payment or satisfaction until the Indebtedness shall
            have been repaid in full and none of the


                                       85
<PAGE>

            Finance Parties shall be under any further actual or contingent
            liability to any third party in relation to the Vessels, the
            Insurances, Earnings or Requisition Compensation or any other matter
            referred to in the Security Documents.

      20.12 Security cumulative The security constituted by the Security
            Documents shall be in addition to any other security now or in the
            future held by the Finance Parties or any of them for or in respect
            of all or any part of the Indebtedness, and shall not merge with or
            prejudice or be prejudiced by any such security or any other
            contractual or legal rights of any of the Finance Parties, nor
            affected by any irregularity, defect or informality, or by any
            release, exchange or variation of any such security. Section 93 of
            the Law of Property Act 1925 and all provisions which the Agent
            considers analogous thereto under the law of any other relevant
            jurisdiction shall not apply to the security constituted by the
            Security Documents.

      20.13 Re-instatement If any Finance Party takes any steps to exercise any
            of its rights, powers, remedies or discretions pursuant to the
            Security Documents and the result shall be adverse to the Finance
            Parties, the Borrower, the Guarantor and the Finance Parties shall
            be restored to their former positions as if no such steps had been
            taken.

      20.14 No liability None of the Finance Parties, nor any agent or employee
            of any Finance Party, nor any receiver and/or manager appointed by
            the Agent, shall be liable for any losses which may be incurred in
            or about the exercise of any of the rights, powers, discretions or
            remedies of the Finance Parties under or pursuant to the Security
            Documents nor liable as mortgagee in possession for any loss on
            realisation or for any neglect or default of any nature for which a
            mortgagee in possession might otherwise be liable unless such
            Finance Party's action constitutes gross negligence or wilful
            misconduct.

      20.15 Rescission of payments etc. Any discharge, release or reassignment
            by any of the Finance Parties of any of the security constituted by,
            or any of the obligations of any Security Party contained in, any of
            the Security Documents shall be (and be deemed always to have been)
            void if any act (including, without limitation, any payment) as a
            result of which such discharge, release or reassignment was given or
            made is subsequently wholly or partially rescinded or avoided by
            operation of


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<PAGE>

            any law, unless such Finance Party's action constitutes gross
            negligence or wilful misconduct.

      20.16 Subsequent Encumbrances If the Agent receives notice of any
            subsequent Encumbrance (other than any Encumbrance permitted by the
            terms of this Agreement) affecting any Vessel, or all or any part of
            the Insurances, Earnings or Requisition Compensation, the Agent may
            open a new account in its books for the Borrower. If the Agent does
            not open a new account, then (unless the Encumbrance is permitted by
            the terms of this Agreement or the Agent gives written notice to the
            contrary to the Borrower) as from the time of receipt by the Agent
            of notice of such subsequent Encumbrance, all payments made to the
            Agent shall be treated as having been credited to a new account of
            the Borrower and not as having been applied in reduction of the
            Indebtedness.

      20.17 Releases If any Finance Party shall at any time in its discretion
            release any party from all or any part of any of the Security
            Documents or from any term, covenant, clause, condition or
            obligation contained in any of the Security Documents, the liability
            of any other party to the Security Documents shall not be varied or
            diminished.

      20.18 Certificates Any certificate or statement signed by an authorised
            signatory of the Agent purporting to show the amount of the
            Indebtedness (or any part of the Indebtedness) or any other amount
            referred to in any of the Security Documents shall, save for
            manifest error or on any question of law, be conclusive evidence as
            against the Borrower or the Guarantor (as the case may be) of that
            amount.

      20.19 Survival of representations and warranties The representations and
            warranties on the part of each of the Borrower and the Guarantor
            contained in this Agreement shall survive the execution of this
            Agreement and the advance of the facility or any part thereof.

      20.20 Counterparts This Agreement may be executed in any number of
            counterparts each of which shall be original but which shall
            together constitute the same


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<PAGE>

      20.21 Third Party Rights Notwithstanding the provisions of the Contracts
            (Rights of Third Parties) Act 1999, no term of this Agreement is
            enforceable by a person who is not a party to it.

21    Law and Jurisdiction

      21.1  Governing law This Agreement shall in all respects be governed by
            and interpreted in accordance with English law.

      21.2  Jurisdiction For the exclusive benefit of the Finance Parties, the
            parties to this Agreement irrevocably agree that the courts of
            England are to have jurisdiction to settle any disputes which may
            arise out of or in connection with this Agreement and that any
            Proceedings may be brought in those courts. Each of the Borrower and
            the Guarantor irrevocably waives any objection which it may now or
            in the future have to the laying of the venue of any Proceedings in
            any court referred to in this Clause, and any claim that those
            Proceedings have been brought in an inconvenient or inappropriate
            forum.

      21.3  Alternative jurisdictions Nothing contained in this Clause shall
            limit the right of the Finance Parties to commence any Proceedings
            against either the Borrower or the Guarantor in any other court of
            competent jurisdiction nor shall the commencement of any Proceedings
            against either the Borrower or the Guarantor in one or more
            jurisdictions preclude the commencement of any Proceedings in any
            other jurisdiction, whether concurrently or not.

      21.4  Service of process Without prejudice to the right of the Finance
            Parties to use any other method of service permitted by law, each of
            the Borrower and the Guarantor irrevocably agrees that any writ,
            notice, judgment or other legal process shall be sufficiently served
            on it if addressed to it and left at or sent by post to the Address
            for Service, and in that event shall be conclusively deemed to have
            been served at the time of leaving or, if posted, at 9.00 a.m. on
            the third Business Day after posting by prepaid first class
            registered post.

IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.


                                       88
<PAGE>

[SIGNED BY EACH PARTY'S AUTHORIZED REPRESENTATIVE ON 22 SEPTEMBER 2000]

SIGNED by                              )
duly authorised for and on behalf      )
of BANK OF AMERICA N.A.                )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of THE BANK OF TOKYO-                  )
MITSUBISHI, LTD.                       )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of CHRISTIANIA BANK OG                 )
KREDITKASSE ASA                        )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of CITIBANK N.A.                       )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of CREDIT INDUSTRIEL ET                )
COMMERCIAL                             )
(as a Bank)                            )
in the presence of:-                   )
<PAGE>

SIGNED by                              )
duly authorised for and on behalf      )
of CREDIT LYONNAIS                     )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of DEN NORSKE BANK ASA                 )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of DEUTSCHE SCHIFFSBANK                )
AKTIENGESELLSCHAFT                     )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of FORTIS CAPITAL CORP`                )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of HSBC BANK PLC                       )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of THE ING (U.S.) CAPITAL LLC          )
(as a Bank)                            )
in the presence of:-                   )
<PAGE>

SIGNED by                              )
duly authorised for and on behalf      )
of KBC FINANCE IRELAND                 )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of LANDESBANK SCHLESWIG-               )
HOLSTEIN GIRONZENTRALE                 )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of NATEXIS BANQUES POPULAIRES          )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of THE ROYAL BANK OF SCOTLAND          )
PLC                                    )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of SCOTIABANK EUROPE PLC               )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of SPAREBANKEN ROGALAND                )
(as a Bank)                            )
in the presence of:-                   )
<PAGE>

SIGNED by                              )
duly authorised for and on behalf      )
of VEREINS-UND WESTBANK AG             )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of WHITNEY NATIONAL BANK               )
(as a Bank)                            )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of DEN NORSKE BANK ASA                 )
(as the Agent and Security Trustee)    )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of DEN NORSKE BANK ASA                 )
(as an Arranger)                       )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of BANC OF AMERICA                     )
SECURITIES LLC                         )
(as an Arranger)                       )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of SALOMON BROTHERS                    )
INTERNATIONAL LIMITED                  )
(as an Arranger)                       )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of HSBC BANK Plc                       )
(as an Arranger)                       )
in the presence of:-                   )
<PAGE>

SIGNED by                              )
duly authorised for and on behalf      )
of ING BARINGS LLC                     )
(as an Arranger)                       )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of BANK OF AMERICA N.A.                )
(as Syndication Agent)                 )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of CITIBANK N.A.                       )
(as Syndication Agent)                 )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of SALOMON BROTHERS                    )
INTERNATIONAL LIMITED                  )
(as Joint Book Manager)                )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of BANC OF AMERICA                     )
SECURITIES LLC                         )
(as Joint Book Manager)                )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of ING BARINGS LLC                     )
(as Documentation Agent)               )
in the presence of:-                   )
<PAGE>

SIGNED by                              )
duly authorised for and on behalf      )
of STOLT COMEX                         )
SEAWAY FINANCE B.V.                    )
in the presence of:-                   )

SIGNED by                              )
duly authorised for and on behalf      )
of STOLT OFFSHORE S.A.                 )
in the presence of:-                   )

For the purposes of Article 1 of the Protocol annexed to the Convention on
jurisdictions and enforcement of judgements on civil and commercial matters
signed at Brussels on 27 September 1968, the following party expressly and
specifically agrees to the provisions of Clause 21.2 of the Agreement:-


SIGNED by _________________________

duly authorised for and on behalf of
STOLT OFFSHORE S.A.