DATED 2002




                                Danepath Limited


                                     - and -


                                 RMS Titanic Inc





                                DEED OF COVENANT
                                m.v. SV EXPLORER
                             Official Number 343403



                             Andrew M. Jackson & Co.
                                   Solicitors
                                      HULL

                                    17/04/02


THIS IS AN IMPORTANT  DOCUMENT.  YOU SHOULD TAKE INDEPENDENT LEGAL ADVICE BEFORE
SIGNING  AND SIGN  ONLY IF YOU  WANT TO BE  LEGALLY  BOUND.  IF YOU SIGN AND THE
MORTGAGEE IS NOT PAID YOU MAY LOSE THE ASSETS(S) CHARGED.

THIS DEED OF COVENANT is made the 2nd day of April 2002

BETWEEN

(1)  Danepath  Limited  (company  number  04007562) whose  registered  office is
     situated at 194 Pontefract Road, Cudworth,  Barnsley,  South Yorkshire, S72
     8AF (the "Mortgagor") and

(2)  RMS Titanic Inc having its principal  office at 3340 Peachtree Road,  Suite
     1225, Atlanta, Georgia, 30326 ("the Mortgagee")

BACKGROUND

(1)  The Mortgagor is the sole  absolute  owner of sixty four (64) shares in the
     motor  vessel "SV  EXPLORER"  registered  under the  British  flag with the
     Registrar  General of  Shipping & Seamen at Cardiff  with  Official  Number
     343403 (the "Ship") which  expression  means the motor vessel "SV EXPLORER"
     and includes  any share or interest  therein,  and the engines,  machinery,
     boats,  tackle,  outfits,  gear,  instruments,  parts,  spare parts,  fuel,
     consumable  and  other  stores,  belongings,  appurtenances,   accessories,
     furnishings,  and all other equipment of whatever kind,  whether onboard or
     ashore  or  elsewhere,  whether  now  belonging  to the  Ship or  hereafter
     acquired and all additions, improvements or replacements thereto

(2)  The  Ship  is at  the  date  hereof  free  of  all  mortgages,  pledges  or
     encumbrances of any kind

(3)  The Mortgagor  with others has entered into the  Agreement and  furthermore
     has  agreed  to  enter  into  this  Deed and the  Mortgage  to  secure  the
     obligations of Argosy  International  Limited to the Mortgagee  pursuant to
     the terms of the Agreement

(4)  This  Deed is  supplemental  to and  bears  the  same  date as a  Statutory
     Mortgage  ("the  Mortgage")  executed  by the  Mortgagor  in  favour of the
     Mortgagee and constituting a first priority  mortgage over sixty four/sixty
     fourth shares in the Ship


<PAGE>

NOW THIS DEED WITNESSETH  as follows:-
------------------------
1.       DEFINITIONS AND CONSTRUCTION
1.1.     Definitions
"Act" means the Merchant  Shipping Act 1995 and the Regulations  made thereunder
or any addition,  modification,  re-enactment or  consolidation of all or any of
them from time to time  "Earnings"  means all  freight,  hire,  passage  monies,
passenger fares, demurrage,  despatch and detention monies, compensation payable
in the event of  requisition of the Ship for hire,  remuneration  for salvage or
towage  services and any other  earnings  whatsoever due or to become due to the
Mortgagor  during the  security  period

"Insurances"  means all  contracts  and policies of insurance  from time to time
effected or  maintained  in respect of the Ship and her  earnings,  or otherwise
howsoever  in  connection  with the Ship  including  all  entries  in any mutual
assurance  association of whatsoever  nature  "Agreement" means the Agreement of
even date  herewith  entered into by the  Mortgagor and the Mortgagee and Graham
Jessop and Argosy International  Limited a true copy of which is attached hereto
at Annex I

"Mortgaged   Property"  means  the  Ship,  the  Earnings,   the  Insurances  any
Requisition  Compensation  and all other rights,  assets,  interests or property
from time to time  mortgaged,  charged or assigned to the Mortgagee  pursuant to
clause 3, including each and every part thereof

"Outstanding  Indebtedness"  means the  aggregate  of all money  owing and other
outstanding  liabilities  and obligations due from time to time by the Mortgagor
to the Mortgagee under the Security Documents

"Security  Documents"  means  the  Agreement,   this  Deed,  the  Mortgage,  the
Assignment of Earnings and Insurances and any other documents as may be executed
to secure the Outstanding Indebtedness

"Security Period" means the period commencing at the date hereof and terminating
upon full and final settlement of the Outstanding Indebtedness

                                       2
<PAGE>

"Total Loss" means:-

(i)  actual, constructive, compromised or arranged total loss of the Ship

(ii) requisition of title or other compulsory acquisition of the Ship

(iii)hijack,  theft,  capture,   seizure,   arrest,   detention,   condemnation,
     confiscation  or loss of possession of the Ship unless the Ship be released
     and returned within 30 days

1.2.     Construction
         ------------
In this Deed and the Schedules hereto, unless the context otherwise requires:-

(a)  references  to  the  Mortgagor  and  the  Mortgagee   shall  include  their
     respective successors or assigns;

(b)  references to the singular shall include the plural and vice versa;

(c)  references to the masculine  shall include the feminine and neuter and vice
     versa;

(d)  references  to  persons   include  any  individual  or  body  corporate  or
     unincorporate,   partnership,   states,   governmental  and  administrative
     entities, whether or not a separate legal entity;

(e)  references to schedules, clauses, sub-clauses,  paragraphs,  sub-paragraphs
     are to the schedules, clauses, sub-clauses,  paragraphs,  sub-paragraphs of
     this Deed;

(f)  the index and marginal  headings are for ease of reference only and are not
     to be used in the construction of this Deed;

(g)  references to any statute,  law,  decree,  or regulation shall be deemed to
     include references to any re-enactment, extension or amendment thereof from
     time to time;

(h)  references to any document  including  this Deed shall be deemed to include
     references to any replacement, variation or supplement thereof from time to
     time

2.       REPAYMENT AND INTEREST

The Mortgagor hereby covenants with the Mortgagee that the Mortgagor will pay to
the  Mortgagee  on demand  all  moneys and other  liabilities  whether  present,
future,  actual  and/or  contingent  in  whatever  currency  denominated  now or
hereafter due or owing to the Mortgagee as a result of the obligations  referred
to in the Mortgage and/or due from or incurred by the Mortgagor to the Mortgagee
under the Agreement  including  (but without  prejudice to the generality of the
foregoing) all costs,  charges,  expenses and losses which the Mortgagee may pay

                                       3
<PAGE>

or incur in the negotiation,  preparation and execution of the Mortgage and this
Deed or in discharging any stamp duties or registration  fees payable thereon or
in  protecting,  maintaining  or enforcing the security  created by or otherwise
exercising  the  powers  vested in it under the  Mortgage  and this Deed (to the
intent  that the  Mortgagee  shall be  afforded a full  complete  and  unlimited
indemnity in respect  thereof  notwithstanding  any rule of law or equity to the
contrary) and whether arising  directly or indirectly in respect of the security
created  by the  Mortgage  and this  Deed or of any other  security  held by the
Mortgagee for the moneys and  liabilities  described in this Clause

MORTGAGE AND ASSIGNMENT OF MORTGAGED PROPERTY

2.1. As security for payment of the moneys and liabilities described in Clause 2
hereof the Mortgagor with full title guarantee  hereby  mortgages and charges to
and in favour of the Mortgagee by way of further assurance all its rights, title
and interest  present and future in and to the Mortgaged  Property and,  without
prejudice  to the  generality  of the  foregoing,  hereby  assigns and agrees to
assign  to the  Mortgagee  all its  rights,  title  and  interest  in and to the
Earnings, the Insurances and any Requisition Compensation,  and all its benefits
and interests present and future therein PROVIDED however that:-

(a)  the  Earnings  shall be  payable  to the  Mortgagor  until such time as the
     Mortgagee  shall  direct to the  contrary  whereupon  the  Mortgagor  shall
     forthwith,  and the  Mortgagee  may at any time  thereafter,  instruct  the
     persons  from whom the  Earnings  are then  payable  to pay the same to the
     Mortgagee  or as it may  direct and any  Earnings  then in the hands of the
     Mortgagor's  brokers or other agents shall be deemed to have been  received
     by them for the use and on behalf of the Mortgagee;

(b)  unless  and until  any  event  specified  in  Clause 9 hereof  shall  occur
     (whereupon  all insurance  recoveries  shall be receivable by the Mortgagee
     and applied in accordance with Clause 12):

     (i)  any moneys payable under the Insurances shall be payable in accordance
          with the terms of the relevant  Loss Payable  Clause and the Mortgagee
          will not in the meantime give any  notification to the contrary to the
          insurers as contemplated by the Loss Payable Clause;

                                       4
<PAGE>

     (ii) any insurance moneys received by the Mortgagee in respect of any major
          casualty (as specified in the relevant  Loss Payable  Clause) shall be
          paid over to the  Mortgagor  upon the  Mortgagor  furnishing  evidence
          satisfactory to the Mortgagee that all loss and damage  resulting from
          such casualty has been  properly made good and repaired,  and that all
          repair  accounts and other  liabilities  whatsoever in connection with
          the  casualty  have been fully paid and  discharged  by the  Mortgagor
          PROVIDED ALWAYS however that the insurers with whom the fire and usual
          marine  risks  insurances  are  effected  may,  in the case of a major
          casualty,  and with the previous  consent in writing of the Mortgagee,
          make  payment on  account of repairs in the course of being  effected;
          and

(c)  upon payment and discharge in full to the  satisfaction of the Mortgagee of
     the Outstanding  Indebtedness  the Mortgagee shall, at the request and cost
     of  the  Mortgagor,   re-assign  the  Earnings,   the  Insurances  and  any
     Requisition Compensation to the Mortgagor or as it may direct

3.       CONTINUING SECURITY etc

IT IS HEREBY AGREED AND DECLARED  that:-

3.1. the security created by the Mortgage and by this Deed shall be a continuing
security  in the  hands  of the  Mortgagee  and  shall  not be  satisfied  by an
intermediate  payment  or  satisfaction  of any part of the  amount  secured  or
discharge of the Mortgage and that the security so created  shall be in addition
to and shall not in any way be prejudiced or affected by any collateral or other
security now or hereafter held by the Mortgagee,  by whomsoever granted, for all
or part of the  amount  secured  and that every  power and  remedy  given to the
Mortgagee  hereunder  shall be in addition to and not in  limitation  of any and
every other power or remedy  vested in the Mortgagee and that all the powers and
remedies so vested in the  Mortgagee  may be exercised  from time to time and as
often and in such manner as the Mortgagee shall in its absolute  discretion deem
expedient

                                       5
<PAGE>

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

4.  CONSOLIDATION

The  provisions  of Sections 93 and 103 of the Law of Property  Act 1925 and any
re-enactment  thereof shall not apply and the Mortgagee  shall have the right to
consolidate

5. RULE IN CLAYTON'S CASE

Upon  discovering that the Mortgagor has encumbered or disposed of the Mortgaged
Property or any part  thereof or any  interest  therein the  Mortgagee  shall be
entitled to rule off the  Mortgagor's  liabilities  and to open a new account or
accounts for the Mortgagor  and no amount  credited to the Mortgagor in any such
new account shall be appropriated  towards or have the effect of discharging any
part of the liabilities due to the Mortgagee incurred prior to such ruling off

6. MORTGAGOR'S  COVENANTS

THE MORTGAGOR FURTHER COVENANTS with the MORTGAGEE and UNDERTAKES as follows:-

(a) Ship's Name and  Registration

To keep the Ship  registered  as a British ship in the United  Kingdom under the
Act in the name of the  Mortgagor and not do or suffer to be done  anything,  or
omit to do anything  the doing or omission of which could or might result in the
Ship being  required to be  registered  otherwise  than as a British ship in the
United  Kingdom  and  not to do or  suffer  to be done  anything,  or omit to do
anything,  the  doing or  omission  of  which  could  or  might  result  in such
registration under the Act being forfeited,  terminated or imperilled and not to

                                       6
<PAGE>

register the Ship or permit its registration under any other name flag or at any
other port without the prior written consent of the Mortgagee and to procure the
renewal  of  such  registration  of  the  Ship  as  a  British  ship  with  full
registration at least one month before the same shall expire and to procure that
at all  times  the  Ship  is  managed,  and  its  operations  are  directed  and
controlled, from within the United Kingdom;

(b) Condition

  To keep the Ship at all times in a good and  seaworthy
state  of  repair  and in all  respects  in  good  operating  condition,  and to
maintain,  service,  repair  and  overhaul  the Ship and make such  alterations,
modifications  and improvements as may be required so as to maintain her present
class and so as to comply  with the  provisions  of the Act and the  Regulations
made  thereunder  and all  other  regulations  and  requirements  (statutory  or
otherwise)  from time to time applicable to the Ship under English law or of any
other  jurisdiction  into  which  the Ship may come and not  without  the  prior
written consent of the Mortgagee to install on the Ship any equipment owned by a
third party  which  cannot be removed  without  causing  material  damage in the
structure  or fabric of the Ship and so as not to diminish the value of the Ship
other than in the  normal  course of  operation  and not to alter or allow to be
altered  the  structure,  type or  performance  characteristics  of the Ship

(c)  Insurance

(i)  To insure  and keep the Ship and her  earnings  insured at all times to the
     extent of no less than her full market value  against fire and usual marine
     risks (including excess risks) war risks and protection and indemnity risks
     in  such   amounts   upon  such  terms  with  such   Insurance   Companies,
     Underwriters,  War Risks  and/or other Mutual  Insurance  Associations  and
     through  such Brokers as the  Mortgagee  shall from time to time approve in
     writing, such approval not to be unreasonably withheld or delayed

(ii) To enter  and keep the Ship at all times  entered  in  respect  of her full
     value and tonnage in a Protection  and Indemnity  Association in the United
     Kingdom or  elsewhere  as the  Mortgagee  shall  approve  for all risks and
     liabilities  for the time being usually  covered therein and to arrange for
     guarantees (if required) to be given to the  satisfaction  of the Mortgagee
     by such Association

                                       7
<PAGE>

(iii)To take  steps to renew  all  such  insurances  on the due date at least 14
     days  before  the  expiry of cover and to procure  that the  brokers  shall
     promptly  confirm in writing to the  Mortgagee  as and when such renewal is
     effected

(iv) Punctually to pay all premiums, calls,  contributions or other sums payable
     in respect of such  insurances  and if so  required  by the  Mortgagee,  to
     produce all receipts in respect thereof

(v)  To arrange for the execution of such  guarantees or other  documents as may
     from time to time be required by any  underwriters  or insurers  for or for
     the continuance of cover

(vi) To procure that the  interest of the  Mortgagee  shall be duly  endorsed or
     noted upon all slips, cover notes, policies, certificates of entry or other
     instruments of insurance issued in connection with such insurances or entry
     and that each and every policy covered by these provisions shall contain or
     have attached  thereto a Loss Payable  Clause and/or a Notice of Assignment
     in such form as shall from time to time be approved by the Mortgagee

(vii)To procure  that the  protection  and  indemnity  and/or war risk  insurers
     shall (if so required by the  Mortgagee)  provide to the Mortgagee a letter
     or letters of undertaking in such form as may be required by the Mortgagee

(viii) If so requested by the Mortgagee,  but at the cost of the  Mortgagor,  to
     furnish the Mortgagee from time to time with a detailed report signed by an
     independent  firm of marine  insurance  brokers  appointed by the Mortgagee
     dealing with the insurances  maintained on the Ship and stating the opinion
     of such firm as to the adequacy thereof

(ix) Not to employ the Ship or suffer the Ship to the employed otherwise than in
     conformity  with the terms of the  instruments of insurance  (including any
     express or implied  warranties  therein)  nor do or fail to do  anything in
     connection  with  the  Ship  whereby  cover  may be  withdrawn,  cancelled,
     imperilled or prejudiced  in any way  whatsoever  unless the consent of the
     insurer has first been obtained and any requirements as to extra premium or
     otherwise as the insurers may require have been complied with

                                       8
<PAGE>

(x)  To apply all such sums as are paid to the Mortgagor in accordance  with the
     provisions  of the Mortgage and of this Deed for the purpose of making good
     the loss and fully  repairing all damage in respect of which such sums have
     been received

(d)  Surveys

To submit the Ship to continuous surveys and such periodical or other surveys as
may be  required  for  classification  or other  purposes  to enable the Ship to
operate as a British  ship and to supply to the  Mortgagee  copies of all survey
reports issued in respect thereof

(e) Inspection

To permit the  Mortgagee  or by surveyors  or other  persons  appointed by it to
board  the Ship at all  reasonable  times  for the  purpose  of  inspecting  the
condition  thereof or for satisfying  themselves as regards proposed or executed
repairs and to afford all necessary and proper  facilities for such  inspections
provided that such persons go aboard the Ship at their own risk

(f)  Debts etc

Punctually to pay and discharge all debts,  damages, and liabilities  whatsoever
which the  Mortgagor  shall have been  called upon to pay,  discharge  or secure
which have given or may give rise to liens on or claims enforceable  against the
Mortgaged  Property  or any  part  thereof  and in the  event of the  arrest  or
detention of the Mortgaged Property or any part thereof whether by legal process
or in  exercise or  purported  exercise of any such lien or claim to procure the
release of the same forthwith upon receiving notice of such arrest or detention

(g)  Information

Promptly to furnish the  Mortgagee as and when  requested  with any  information
whatsoever regarding the Mortgaged Property or any part thereof as the Mortgagee
shall  request and to keep proper  books of account in respect of the Ship which
shall be available for inspection by the Mortgagee at all  reasonable  times and
in any event to submit  annually  to the  Mortgagee  not later than four  months
after the end of the fiscal  year of the  Mortgagor  the  balance  sheet and the
profit and loss account of the Mortgagor

(h)  Notification

To notify the Mortgagee forthwith of the following:-

(i)  any  damage  to the Ship  involving  repairs  the cost of which  will or is
     likely to exceed 10% of the insured value of the Ship or the  equivalent in
     any other currency;

                                       9
<PAGE>


(ii) any occurrence in  consequence  whereof the Ship has become or is likely to
     become a total loss;

(iii)any  requirement  or  recommendation  made by any  insurer,  classification
     society  or  authority  which is not  complied  with  within any time limit
     specified therefor;

(iv) any arrest or  detention of the  Mortgaged  Property or any part thereof or
     the exercise or purported exercise of any lien thereon;

(v)  the happening of any of the events of default set out in clause 9 hereof

(i)  Outgoings

Promptly to pay all tolls dues and other outgoings  whatsoever in respect of the
Ship and to keep proper books of account in respect of the Ship and the earnings
thereof and when  requested by the  Mortgagee to furnish  satisfactory  evidence
that the earnings, allotments, insurance and pension contributions in respect of
the master and crew have been paid and, are being paid  regularly  and that they
have no claims for earnings beyond the ordinary  arrears and that the master has
no claim for  disbursements  other than those  incurred  by him in the  ordinary
course of  trading  on the  voyage  then in  progress

(j) Bank's expenses in protecting security

To pay to the  Mortgagee  on demand all monies  whatsoever  which the  Mortgagee
shall  expend,  be put to or  become  liable  for in or  about  the  protection,
maintenance  or  enforcement  of the security  hereby created or in or about the
exercise by the  Mortgagee of any of the powers vested in it and to pay interest
thereon from the date such expense or liability  was incurred  until the date of
payment at the default rate before and after judgment

(k) Bank's legal expenses

To pay on demand all the Mortgagee's legal costs,  expenses and disbursements of
whatsoever  nature and any other charges incurred by the Mortgagee in connection
with the preparation, completion and registration of the Security Documents

(l) Employment

Not to employ the Ship or suffer her  employment in any trade or business or for
any purpose which is not covered by the  insurances or which is forbidden by any

                                       10
<PAGE>

applicable  law or is  otherwise  illicit or in carrying  illicit or  prohibited
goods  or in  any  manner  whatsoever  as  may  render  her or  them  liable  to
condemnation  in a Prize Court or to  destruction,  seizure or  confiscation  or
which is contrary to any insurance  which is taken out in respect of her or them
and not to employ the Ship or suffer her employment in any purpose for which she
was not  designed  or is not  reasonably  suited  nor to  permit  the Ship to be
overloaded or used in contravention of any regulation or requirement  (statutory
or otherwise) from time to time applicable

(m) Not to encumber

Not without the prior written  consent of the  Mortgagee to mortgage,  charge or
otherwise  assign the  Mortgaged  Property or to suffer the creation of any such
mortgage,  charge or  assignment  to or in favour of any  person  other than the
Mortgagee

(n) Not to sell

Not without the prior  written  consent of the  Mortgagee  to sell,  transfer or
otherwise  dispose of the  Mortgaged  Property  or any part  thereof or agree to
purport to do any such thing

(o) Chartering

Not  without  the prior  written  consent  of the  Mortgagee  to let the Ship on
charter for any period

(p) Sharing of Earnings

Not  without  the prior  written  consent  of the  Mortgagee  to enter  into any
agreement or arrangement whereby the earnings of the Ship may be shared with any
other person

(q) Repairer's Liens

Not without the prior written  consent of the Mortgagee to put the Ship into the
possession  of any person for the purpose of work being carried out in an amount
which  exceeds or which is likely to exceed 10% of the insured value of the Ship
unless  such  person  shall  have  first  provided  to the  Mortgagee  a written
undertaking,  in a form satisfactory to the Mortgagee,  not to exercise any lien
in respect of such work

(r) Managers

Not without the prior  written  consent of the Mortgagee to appoint a manager of
the Ship

                                       11
<PAGE>

(s) No Representations

Not to represent  that the Mortgagee is in any way concerned in the operation of
the Ship the carriage of passengers or goods therein,  or any other use to which
the  Ship may be put and not to  pledge  the  credit  of the  Mortgagee  for any
purpose  whatsoever

(t) Corporate Authorities

It has and will at all times have the necessary  power to enter into and perform
its  obligations  under this Deed,  and that all  necessary  authorizations  and
consents to enable it to enter into this Deed have been obtained and will remain
in full force and effect during the subsistence of the security  created by this
Deed  that  the  Charge  hereby  constituted  does  not  contravene  any  of the
provisions of its Memorandum and Articles of Association

(u) Memorandum and Articles of Association

Not  without  the  written  consent  of the  Mortgagee  to alter  or  amend  the
Memorandum and Articles of Association of the Mortgagor

(v) Transfer of Shares

Not  without  the  written  consent of the  Mortgagee  to consent to or register
transfer of any shareholdings in the Mortgagor

(w) Documentation

To keep a certified  copy of this Deed and of the Mortgage on board the Ship and
to bring the contents  thereof to the notice of the Master for the time being of
the Ship and to all parties  who may have an  interest  with regard to the Ship,
her crew or cargo

(x) Conveyance on Default

Where the Ship is (or is to be) sold  pursuant  to any power  conferred  by this
Deed to  execute  such form of Bill of Sale,  or  document  of  transfer  as the
Mortgagee may require

7. MORTGAGEES POWER TO PROTECT SECURITY

7.1. Without prejudice to any other rights or powers vested in it, the Mortgagee
shall be entitled  (but not bound) at any time  (whether  before or after it has
demanded payment of any of the Outstanding  Indebtedness) and as often as it may
deem necessary, to take such action as it shall in its absolute discretion think
fit for the purpose of protecting the security created by the Security Documents

                                       12
<PAGE>

and each and  every  expense,  cost,  payment,  disbursement,  loss,  damage  or
liability  incurred by the  Mortgagee in or about taking or  attempting  to take
such action shall be repayable by the Mortgagor on demand together with interest
at the  default  or  judicial  rate  from the date the same was  incurred  until
payment  before and after judgment

7.2. Without prejudice to the generality of the foregoing:-

     8.2.1In the event of  non-compliance  with the  provisions  of clause  7(c)
          hereof,  or any part  thereof,  the  Mortgagee  shall be at liberty to
          effect  and  thereafter  to  maintain  all such  insurances  as in its
          absolute discretion it shall think fit

     8.2.2In the event of non-compliance  with any other provision the Mortgagee
          shall be at  liberty  to make  such  payments  or to  arrange  for the
          carrying out of such work or to take any such  measures as it shall in
          its  absolute   discretion  deem  expedient  or  necessary   including
          direction  to the Ship (at the  Mortgagor's  risk) to remain in, or to
          proceed to and remain in a port designated by the Mortgagee

8. EVENTS OF DEFAULT

Upon the happening of any of the following  events the Outstanding  Indebtedness
shall become  immediately  repayable to the Mortgagee without further demand and
the Mortgagee shall be entitled  without notice to the Mortgagor to exercise all
or any of the powers vested in it:-

(a) Failure to pay sum

The Mortgagor fails to pay any sum of money payable under the Security Documents
on the date specified for payment thereof,  or, only in the case of sums payable
on demand when first demanded

(b) Failure to perform or observe covenant

The Mortgagor  does not perform or observe any of the  covenants or  obligations
contained in the Security Documents

(c) Insolvency

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<PAGE>

(i)  A  Petition  is filed or an Order  is made or an  effective  resolution  is
     passed for the winding up of the Mortgagor in any  jurisdiction  whatsoever
     (otherwise  than for the purpose of any  reconstruction  or amalgamation as
     shall have  previously  been  approved in writing by the  Mortgagee)  or an
     Administrator,  Administrative Receiver or a Receiver is appointed over the
     undertaking or property of the Mortgagor or the Mortgagor  suspends payment
     or  ceases  to  carry on its  business  or makes  special  arrangements  or
     composition with its creditors or an effective resolution is passed (except
     with the Mortgagee's prior written consent) for the reduction in the issued
     share capital of the Mortgagor or

(ii) A  Petition  is  filed or an  Order  is made  for the  sequestering  of the
     Mortgagor  or a  Judicial  Factor is  appointed  to  administer  any of its
     undertakings or property or becomes  apparently  insolvent or signs a Trust
     Deed for the benefit of its  creditors or if it suspends  payment or ceases
     to carry on business or makes any special  arrangement or composition  with
     its creditors

(d)  Total loss

The Ship becomes a Total Loss

(e)  Failure to pay earnings

Any earnings are paid  otherwise  than in accordance  with the directions of the
Mortgagee

(f)  Impossibility or illegality

If it becomes impossible or unlawful for the Mortgagor to perform or observe any
of the covenants or obligations  contained in the Security  Documents or for the
Mortgagee to exercise any of the rights or powers vested in it

(g)  Imperilling of security

Anything is done or suffered to be done by the Mortgagor,  whether in connection
with the Mortgaged Property or otherwise,  which in the opinion of the Mortgagee
may imperil the security created by the Security Documents

9.  MORTGAGEE'S  POWERS UPON DEFAULT

Upon the happening of any of the events of default specified in clause 9 hereof,
the  Mortgagee  shall  become  entitled  forthwith to exercise all or any of the
powers vested in it and in particular:-

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<PAGE>

(a)  Possession

To take possession of the Mortgaged Property

(b)  Insurances

To require  that all  policies,  contracts  and all other  documents  whatsoever
relating  to the  insurances  or  outstanding  claims  thereunder  be  forthwith
delivered  to the  Mortgagee  or as it shall  direct  and to  collect,  recover,
compromise  and give a good  discharge in respect of all claims  outstanding  or
arising under the  insurances  and to take over or to institute (if necessary in
the name of the  Mortgagee)  all  proceedings  in  connection  therewith  as the
Mortgagee shall in its absolute discretion think fit

(c) Discharge claims etc

To discharge,  compound,  release or compromise  claims against the Mortgagor in
respect of the Mortgaged  Property or any part thereof which have given or which
may give rise to any charge or lien on the  Mortgaged  Property  or which are or
may be  enforceable by  proceedings  against the Mortgaged  Property or any part
thereof

(d) To Manage

To manage,  insure,  maintain,  repair, employ or lay up the Ship in such manner
and for such period as the Mortgagee shall in its absolute  discretion think fit
and  to do all  acts  and  things  incidental  or  conducive  thereto  as if the
Mortgagee  were the owner of the Ship  without  being  responsible  for any loss
incurred  thereby and to recover losses thereby incurred from the Mortgagor upon
demand  together  with  interest  thereon at the default rate from the date when
such losses were incurred to the date of payment before and after judgment

(e) Sale

To sell,  scrap,  decommission  or otherwise  dispose of the Ship without  prior
notice to the Mortgagor and with or without the benefit of any contract  entered
into in connection with the Ship in such manner and for such  consideration  and
upon such terms as the Mortgagee in its absolute discretion shall think fit with
power to  postpone  any such  sale and  without  being  answerable  for any loss
occasioned by such sale or resulting from the postponement thereof

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<PAGE>

(f)  Expenses incurred in exercise of powers

To recover from the Mortgagor  upon demand all expenses  payments  disbursements
whatsoever  incurred by the  Mortgagee in or about or incidental to the exercise
of any of the powers vested in it together with interest  thereon at the default
or  judicial  rate from the date when the same were  incurred  until the date of
payment  before and after  judgment  PROVIDED  ALWAYS  that upon any sale of the
Mortgaged  Property or any part thereof the purchaser  shall not be bound to see
or enquire  whether the power of sale has arisen and the sale shall be deemed to
be  within  the  power of the  Mortgagee  and the  Mortgagee's  receipt  for the
purchase  money  shall  effectively  discharge  the  purchaser  who shall not be
concerned  with the manner of  application  of the proceeds of sale or be in any
way answerable therefor

(g)  Appointment of Receiver

At any time after the Outstanding Indebtedness shall have become due and payable
as aforesaid the Mortgagee  shall have power in writing to appoint any person or
persons to be a receiver or receivers ("the Receiver") of the Mortgaged Property
charged  by this  Deed  and to fix his  remuneration  and may  remove  any  such
Receiver  and appoint  another in his place.  A Receiver so  appointed  shall be
deemed  to be the  agent of the  Mortgagor  and the  Mortgagor  shall be  solely
responsible for his acts defaults and remuneration and a Receiver shall have the
same powers as are conferred  upon the Mortgagee by this clause 10 and the power
to take any  indemnity  from the Mortgagor  from and against all actions  claims
expenses demands and liabilities  (whether arising out of contract or of tort or
in any other way  whatever)  incurred for anything done or omitted to be done in
the exercise or purported exercise of his powers under this Deed

10.  PROTECTION OF PURCHASERS

No person  dealing  with the  Mortgagee  or with any  Receiver  appointed by the
Mortgagee  hereunder  shall be concerned to see or to enquire  whether the power
which the  Mortgagee  or Receiver is  purporting  to exercise  has arisen or has
become  exercisable  or whether any money  remains due on the  security  created
hereby or  otherwise  as to the  propriety  or  regularity  of any sale or other
dealing by the  Mortgagee or Receiver  with the  Mortgaged  Property or any part
thereof and all the protection afforded to purchasers by Sections 104 and 107 of
the Law of Property  Act 1925 shall apply to any such  person  dealing  with the
Mortgagee or such Receiver

                                       16
<PAGE>

11.  APPLICATION OF PROCEEDS OF SALE ETC

All monies arising from the sale or  realisation  of the Mortgaged  Property and
all monies  received by the  Mortgagee  or by any Receiver  appointed  hereunder
shall be applied as follows:

FIRST  in or  towards  payment  of all  costs  and  expenses  and  disbursements
(including  legal fees) of whatsoever  nature  incurred in connection  with such
sale or realisation

SECONDLY in or towards  payment of the balance of the moneys and liabilities set
out in Clause 2 hereof

THIRDLY the balance (if any) to the Mortgagor or other person entitled thereto

12.  CURRENCY CONVERSION

If at any time the Mortgagee and/or its Receiver  receives any moneys (including
any moneys  received as a result of the  enforcement of the security  created by
the Mortgage and this Deed or in the exercise of any of the  Mortgagee's  and/or
its Receiver'  rights under this Deed) in a currency  other than the currency in
which the  Outstanding  Indebtedness is from time to time  denominated  then the
Mortgagee  and/or its Receiver may (in  accordance  with the  Mortgagee's  usual
procedures  and  practice  and after  deduction  of the  costs,  commission  and
expenses  incurred in undertaking  such a  transaction)  convert those moneys so
received  into the  currency in which the moneys and  liabilities  described  in
Clause 2 hereof are so denominated.

13.  DELAY AND INDULGENCE

No delay or omission of the  Mortgagee  to exercise any right or power vested in
it  shall  impair  such  right  or  power  to be  construed  as a  waiver  of or
acquiescence  in any default of the  Mortgagor and in the event of the Mortgagee
at any time  agreeing  to waive any such  right or power  such  waiver  shall be
revocable by the Mortgagee at any time and the right or power shall  thenceforth
be exercisable again as if there had never been such waiver

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<PAGE>

14.  DELEGATION

The  Mortgagee  shall  be  entitled  at any  time  and as often as it may in its
absolute  discretion  deem  expedient  to delegate  all or any of the powers and
discretions  vested in it in such manner and upon such terms and to such persons
as it may in its absolute discretion think fit

15.  INDEMNITY

The Mortgagor  hereby agrees and  undertakes to indemnify the Mortgagee  against
all obligations and liabilities whatsoever arising which the Mortgagee may incur
in connection with the Mortgaged Property or otherwise  howsoever in relation to
or in connection with the Mortgage and this Deed

16.  POWER OF ATTORNEY

The Mortgagor hereby irrevocably  appoints the Mortgagee as its attorney for the
duration of the  security  period for the purposes of doing in its name all acts
which the Mortgagor could do in relation to the Mortgaged Property including the
execution of any documents relating to the sale of the Ship or any share therein
which the Mortgagee may consider  expedient in the exercise of any of its powers
under  the  terms of this  Agreement  PROVIDED  that  such  power  shall  not be
exercisable until the Outstanding Indebtedness becomes repayable. As regards any
person dealing with the Mortgagee,  the exercise of the power by or on behalf of
the Mortgagee shall be conclusive evidence of its right to exercise the same and
such  person  shall  not  be  put  on  enquiry  as to  whether  the  Outstanding
Indebtedness  has become  repayable  nor shall any such  person be  affected  by
notice that the Outstanding Indebtedness has not become repayable

17.  FURTHER ASSURANCES

 The Mortgagor  hereby  undertakes at its own expense to
execute,  sign,  perfect,  do and (if  required)  register  every  such  further
assurance,  document,  act, or thing as in the opinion of the  Mortgagee  may be
necessary or desirable for the purpose of more effectually  mortgaging  charging
and registering the Mortgaged Property or perfecting the security created hereby

                                       18
<PAGE>

18.  NOTICES

18.1.Every notice,  demand or other  communication shall be in writing and shall
     be given:-

     19.1.1 in the case of the Mortgagor to:

                  194 Pontefract Road
                  Cudworth
                  Barnsley
                  S72 8AE
                  Facsimile:        01226 379581
                  Reference:        Mr G Goodyear

     19.1.2 in the case of the Mortgagee to:

                  3340 Peachtree Road
                  Suite 1225
                  Atlanta
                  Georgia
                  30326
                  Facsimile:
                  Reference:        Mr G Couture

or to such other  address in England or telex or facsimile  number as either the
Mortgagee or the Mortgagor may from time to time notify to the other 18.2. Every
notice,  demand or other  communication  shall be deemed to have been  received:

     19.2.1 in the case of a letter when delivered  personally or two days after
          its posting by first class post

     19.2.2 in the case of a telex of facsimile when despatched

19.  LAW

The  provisions  of  this  agreement  shall  be  governed  by and  construed  in
accordance  with English law, and all  disputes  arising in  connection  with it
shall  be  determined  by  the  High  Court  of  Justice  in  England  to  whose
jurisdiction the Mortgagor hereby irrevocably submits.

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<PAGE>


IN WITNESS  whereof  the  Mortgagor  has  caused  this Deed to be  executed  and
delivered as a Deed the day and year first before written

Executed as a Deed by
Danepath Limited
in the presence of



..........................................
Director



..........................................
Director/Secretary



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