<Page>

                                                                    EXHIBIT 4.16

                                                         MEMORANDUM OF AGREEMENT

           DUPLICATE ORIGINAL

Dated: 18TH JULY 2001

D'AMICO INTERNATIONAL HOLDING SAH, LUXEMBOURG, ON BEHALF OF POTOMAC SHIPPING
COMPANY, LIBERIA, hereinafter called the Sellers, have agreed to sell, and
BUYING COMPANY TO BE NOMINATED AND GUARANTEED BY STELMAR SHIPPING LTD., LIBERIA

Name: THE VESSEL PRESENTLY KNOWN AS HULL NO. 1071 UNDER CONSTRUCTION AT DAEDONG
SHIPPING CO. LTD., KOREA, PURSUANT TO THE TERMS OF A CONTRACT MADE ON 15TH MAY,
2000 BY AND BETWEEN DAEDONG SHIPBUILDING CO. LTD. AS CONTRACTOR AND POTOMAC
SHIPPING COMPANY AS BUYERS (THE CONTRACT).

Classification Society/Class: RINA/AMERICAN BUREAU OF SHIPPING

Built: EXPECTED DELIVERY CURRENTLY 7TH FEBRUARY, 2002 BY: DAEDONG SHIPBUILDING
                                                          CO. LTD.

Flag:  N/A                  Place or Registration: TBA

Call Sign: N/A              Grt/Nrt: APPROX. 25,300

Register Number: N/A

Hereinafter called the Vessel, on the following terms and conditions:

DEFINITIONS

"Banking Days: are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.

"In writing" or "written" means a letter handed over from the Sellers to the
Buyers or vice versa, a registered letter, telex, telefax or other modern form
of written communication.

"Classification Society" or "Class" means the Society referred to in line 4.

1.    PURCHASE PRICE US$30,750,000.00 (UNITED STATES DOLLARS THIRTY MILLION
      SEVEN HUNDRED AND FIFTY THOUSAND.

2.    DEPOSIT

As security for the correct fulfillment of this Agreement the Buyers shall pay a
deposit of 10% (ten per cent) of the Purchase price within 3 (three) banking
days from the date of exchange of the faxed signed MOA.

This deposit shall be placed with Citibank, New York, Swift Code CITIUS33XX,
Account Number: 109 246 45, Account Name: Credit Agricole Indosuez, Paris, For
further credit:

                                      - 1 -
<Page>

Potomac/Stelmar Joint Deposit Account, Account Number: 00 198 468 402, For the
Attention: Sylvie Godet-Couery (+33 1 41 89 12 49).

And held by them in a joint account for the Sellers and the Buyers, to be
released in accordance with joint written instructions of the Sellers and the
Buyers. Interest, if any, to be credited to the Buyers. Any fee charged for
holding the said deposit shall be borne equally by the Sellers and the Buyers.

3.    PAYMENT

The said Purchase Price shall be paid in full free of bank charges to account to
be advised. 2 (two) banking days before the date on which the Vessel shall be
ready for delivery the Buyers shall deposit in Citibank, New York, 90% (ninety
per cent) of the Purchase Price into a bank account belonging to the Buyers.
Upon the signing of the Protocol of Delivery and Acceptance by the Sellers and
the Buyers and the Buyers' receipt of the documents set forth in Clause 8 of the
Memorandum of Agreement the 90% (ninety per cent) together with the 10% (ten per
cent) deposit shall be released and paid to the Sellers.

4.    INSPECTIONS

The Sellers shall provide for inspection of the partly completed Vessel at/in
Daedong Shipbuilding Co. on 13th - 17th July, 2001.

5.    NOTICES, TIME AND PLACE OF DELIVERY

(a)   The Sellers shall keep the Buyers well informed of the Vessel's expected
      delivery date under the Contract and shall provide the buyers with 30, 20,
      and 10 days notice of the estimated time of delivery. 3 (three) banking
      days prior to the date of the signing of the Protocol of Delivery and
      Acceptance between the Sellers and the Buyers, the Sellers shall give the
      Buyers a definite written notice of such signing date whereupon the 90%
      (ninety per cent) deposit shall be made pursuant to Clause 3 above.

(b)   The Vessel shall be delivered and taken over safely afloat at a safe and
      accessible berth at/in Daedong Shipbuilding Co. Ltd.

      Expected time of delivery: Back-to-back with delivery to the Sellers
      under the Contract.

(c)   If the Sellers shall have the right to cancel the Contract pursuant to
      Article (III.1(c) or Article VIII.4 thereof they shall notify the Buyers
      in writing starting the date when they anticipate that the Vessel will be
      ready for delivery. Upon receipt of such notification the Buyers shall
      have the option of either canceling this Agreement within 3 running days
      of receipt of the notice of or accepting the new date as the new delivery
      date. If the Buyers have not declared their option within 3 running days
      of receipt of the Sellers' notification or if the Buyers accept the new
      date, the date proposed in the Sellers' notification shall be deemed to be
      the new delivery date.

                                      - 2 -
<Page>

      If this Agreement is maintained with the new delivery date all other terms
      and conditions hereof including those contained in Clauses 5a) and 5c)
      shall remain unaltered and in full force and effect.

(d)   Should the Vessel become an actual, constructive or compromised total loss
      before delivery the deposit together with interest earned shall be
      released immediately to the Buyers whereafter this Agreement shall be null
      and void.

6.    SPARES/BUNKERS, ETC.

The Sellers shall deliver the Vessel to the Buyers with everything belonging to
her on board and on shore according to the specifications of the Contract.

The Buyers shall take over the remaining bunkers and unused lubricating oils in
storage tanks and sealed drums and pay the price agreed between the Sellers and
Daedong Shipbuilding co. Ltd. pursuant to the Contract. Payment under this
Clause shall be made at the same time and place and in the same currency as the
purchase price.

7.    DOCUMENTATION

The place of closing:  LONDON, UNLESS OTHERWISE MUTUALLY AGREED

In exchange for payment of the Purchase Price the Sellers shall furnish the
Buyers with delivery documents, namely:

(a)   Legal Bill of Sale in an appropriate form recordable in ___________ (the
      country in which the Buyers are to register the Vessel), warranting that
      the Vessel is free from all encumbrances, mortgages and maritime liens or
      any other debts or claims whatsoever, duly notarially attested and
      legalized by the consul of such country or other competent authority.

(b)   Verified copy of Certificate of Ownership issued by the competent
      authorities of the flag state of the Vessel, (if the Vessel is registered
      by the Sellers on delivery from Daedong under the Contract - see
      Clause 10).

(c)   Confirmation of Class issued within 72 hours prior to delivery, if
      available, otherwise within 28 (twenty eight) days after delivery. All
      interim certificates required to be furnished upon delivery of the Vessel
      pursuant to this Agreement, the specifications and the relevant
      documentation including:

              i)       Classification Certificate (interim)

              ii)      Safety Construction Certificate

              iii)     Safety Equipment Certificate

              iv)      Safety Radiotelegraphy Certificate

                                      - 3 -
<Page>

              v)       International Loadline Certificate

              vi)      International Tonnage Certificate

              vii)     Builder's Certificate

              viii)    De-rating Exemption Certificate

      However, if is agreed by the Parties that if the classification and/or
      other certificates are not available at the time of delivery of the
      Vessel, provisional certificates shall be accepted by the Buyers, provided
      that the Builder shall furnish the Buyers with formal certificates as
      promptly as possible after such formal certificates have been issued,
      irrespectively no later than 2 (two) weeks after delivery.

(d)   Verified copy of Current Certificate issued by the competent authorities
      stating that the Vessel is free from registered encumbrances (if the
      Vessel is registered by the Sellers on delivery from Daedong under the
      Contract - see Clause 10).

(e)   Certificate of Deletion of the Vessel from the Vessel's registry or other
      official evidence of deletion appropriate to the Vessel's registry at the
      time of delivery, or, in the event that the registry does not as a matter
      of practice issue such documentation immediately, a written undertaking by
      the Sellers to effect deletion from the Vessel's registry forthwith and
      furnish a Certificate or other official evidence of deletion to the Buyers
      promptly and latest within 4 (four) weeks after the Purchase Price has
      been paid and the Vessel has been delivered (if the Vessel is registered
      by the Sellers on delivery from Daedong under the Contract - see Clause
      10).

(f)   Any such documents as may reasonably be required by the competent
      authorities for the purpose of registering the Vessel, provided the Buyers
      notify the Sellers of any such documents as soon as possible after the
      date of this Agreement and not later than 30th November, 2001.

(g)   Verified copies of minutes from a meeting of the board of directors of the
      Sellers approving the sale of the Vessel to Buyers pursuant to the terms
      of this Memorandum of Agreement.

(h)   Verified copy of power of attorney in favor of the signatory of the bill
      of sale and other documents required for the sale and delivery of the
      Vessel to the Buyers.

(i)   Verified copy of the up to date articles of incorporation of the Sellers.

(j)   Verified copy of the builder's certificate and declaration of warranty
      issued to the Sellers by Daedong Shipbuilding Co. Ltd., including a
      confirmation that Daedong Shipbuilding Co., Ltd. has no claims against the
      Vessel and/or the Sellers and that the Vessel has been delivered free and
      clear of mortgages and encumbrances, or otherwise in terms pursuant and in
      accordance with Article VII III(e) of the Contract.

                                      - 4 -
<Page>

(k)   Original or verified copies of all technical documents, certificates and
      manuals delivered to the Sellers under the shipbuilding contract.

(l)   Daedong Shipbuilding Co. Ltd.'s acknowledgement of notice of the
      assignment of any and all guarantee claims from the Sellers to the Buyers,
      it being understood that Daedong Shipbuilding Co. Ltd. shall not undertake
      any additional obligations as a result of such assignment. (See
      Clause 19.2)

At the time of delivery the Buyers and Sellers shall sign and deliver to each
other a Protocol of Delivery and Acceptance confirming the date and time of
delivery of the Vessel from the Sellers to the Buyers.

At the time of delivery the Sellers shall hand to the Buyers the classification
certificate(s) as well as all plans etc., which are on board the Vessel. Other
certificates which are on board the Vessel shall also be handed over to the
Buyers unless the Sellers are required to retain same, in which case the Buyers
to have the right to take copies. Other technical documentation which may be in
the Sellers' possession shall be promptly forwarded to the Buyers at their
expense, if they so request. The Sellers may keep the Vessel's log books but the
Buyers to have the right to take copies of same.

8.    ENCUMBRANCES

The Sellers warrant that the Vessel, at the time of delivery, will be free from
all charters, encumbrances, mortgages and maritime liens or any other debts
whatsoever. The Sellers hereby undertake to indemnify the Buyers against all
consequences of claims made against the Vessel which have been incurred prior to
the time of delivery.

9.    TAXES, ETC.

Any taxes, fees and expenses in connection with the purchase and registration
under the Buyers' flag shall be for the Buyers' account. The Sellers may or may
not register the Vessel in the ownership on their delivery from Daedong, in
their absolute discretion, unless required by the Buyers to do so, in which
event Buyers shall pay all costs, fees and expenses (including taxes) in
connection therewith. The Sellers to advise if they are going to register the
Vessel not less than 90 (ninety) days prior delivery.

10.   CONDITION ON DELIVERY

The Vessel with everything belonging to her shall be at the Sellers' risk and
expense until she is delivered to the buyers. However, the Vessel shall be
delivered with her class maintained without condition/recommendation*, free of
average damage affecting the Vessel's class, and with her classification
certificates and national certificates, as well as all other certificates the
Vessel had at the time of inspection, valid and unextended without
condition/recommendation* by Class or the relevant authorities at the time of
delivery.

-----------
*     Notes, if any, in the surveyor's report which are accepted by the
      Classification Society without condition/recommendation are not to be
      taken into account.

                                      - 5 -
<Page>

11.   NAME/MARKINGS

Upon delivery the Buyers undertake to change the name of the Vessel and alter
funnel markings.

12.   BUYERS' DEFAULT

Should the deposit not be paid in accordance with Clause 2, the Sellers have the
right to cancel this Agreement, and they shall be entitled to claim compensation
for their losses and for all expenses incurred together with interest. Should
the Purchase Price not be paid in accordance with Clause 3, the Sellers have the
right to cancel the Agreement, in which case the deposit together with interest
earned shall be released to the Sellers. If the deposit does not cover their
loss, the Sellers shall be entitled to claim further compensation for their
losses and for all expenses incurred together with interest.

13.   SELLERS' DEFAULT

Should the Sellers fail to give Notice of Readiness in accordance with Clause
5a) or fail to be ready to validly complete a legal transfer in accordance with
the Contract the Buyers shall have the option of canceling this agreement
provided always that the Sellers shall be granted a maximum of 3 banking days
after Notice of Readiness has been given to make arrangements for the
documentation set out in Clause 8. If after Notice of Readiness has been given
but before the Buyers have taken delivery, the Vessel ceases to be physically
ready for delivery and is not made physically ready again in every respect by
the date stipulated in line 61 and new Notice of Readiness given, the Buyers
shall retain their option to cancel. In the event that the Buyers elect to
cancel this Agreement the deposit together with interest earned shall be
released to them immediately. Should the Sellers fail to give Notice of
Readiness by the date stipulated in line 61 or fail to be ready to validly
complete a legal transfer as aforesaid they shall make due compensation to the
Buyers for their loss and for all expenses together with interest if their
failure is due to proven negligence and whether or not the Buyers cancel this
Agreement. The Sellers shall not be in default and shall have no liability under
this Memorandum of Agreement if the uncontractual or delayed delivery of the
Vessel is caused by the uncontractual or delayed delivery from Daedong
Shipbuilding Co. Ltd. See Clause 18.6

14.   ARBITRATION

(a)   This Agreement shall be governed by and construed in accordance with
      English law and any dispute arising out of this Agreement shall be
      referred to arbitration in London in accordance with the Arbitration Acts
      1996 or any statutory modification or re-enactment thereof for the time
      being in force, one arbitrator being appointed by each party. On the
      receipt by one party of the nomination in writing of the other party's
      arbitrator, that party shall appoint their arbitrator within fourteen
      days, failing which the decision of the single arbitrator appointed shall
      apply. If two arbitrators properly appointed shall not agree they shall
      appoint an umpire whose decision shall be final.

Clauses 17-26 shall form an integral part of this Memorandum of Agreement and
shall prevail over other Clauses herein.

                                      - 6 -
<Page>

RIDER CLAUSES
to MOA executed on July, [     ] 2001
by and between

Potomac Shipping Company., (the "Sellers") and Stelmar Shipping Ltd., (the
"Buyers")

RE:   Daedong Hull No. 1071 (the "Vessel")

17.   OVERALL AGREEMENT

17.1  On 15th May, 2000, the Sellers entered into a shipbuilding contract (the
      "Contract") with Daedong Shipbuilding Co. Ltd ("Daedong"). A true and
      complete copy of the Contract (with the purchase price deleted) with GA
      plan, specifications and makers list have been delivered to the Buyers.

17.2  It is acknowledged and agreed:
      - That the Buyers are not party to the Contract, and have no rights,
      obligations or liabilities under it or connected with it other than those
      agreed herein, and

      - that the Sellers shall have no risk, obligations or liabilities
      regarding the design and construction of the Vessel and Daedong's
      performance of its obligations under the Contract.

17.3  The Vessel shall be sold and delivered from the Sellers to the Buyers on
      the terms and conditions of this MOA.

18.   CONSTRUCTION SUPERVISION

18.1  Until the delivery of the Vessel under the terms of the Contract the
      Sellers shall supervise the construction and perform their duties, rights
      and obligations regarding the construction of the Vessel according to the
      Contract, including those provisions dealing with submission of disputes
      to arbitrations and rights to rescind and amend the Contract.

18.2  The Seller's tasks shall include, but not be limited to:

      a)    Supervise and inspect the construction of the Vessel in accordance
            with the Contract and approve of plans and drawings.

      b)    Agree and arrange with Daedong changes to the specifications,
            modifications, extra work and deliveries as provided for in the
            Contract or any changes to any other terms of the Contract.

      c)    Attend and approve all trials in consultation with Buyer's
            supervisor.

      d)    Give and receive all necessary formal notices under the Contract.
            Any notices sent to or by the Sellers shall be copied to the Buyers
            and vice versa and

                                      - 7 -
<Page>

      e)    Assist and advise in all technical matters in connection with the
            delivery of the Vessel from Daedong to the Sellers and from the
            Sellers to the Buyers.

18.3  The Sellers may not without having obtained the prior written approval of
      the Buyers, which approval shall not be unreasonably withheld or delayed,
      waive any of their rights under the Contract (and/or the GA plan, the
      specifications and the makers list) or make any material amendments
      thereto.

18.4  The Sellers undertake to supervise the construction for the duration of
      the building period with due diligence (i.e. as if the Sellers were to
      remain the owners of the Vessel) and to consult with the Buyers if any
      material problem or question arises during the construction period, during
      trial tests or in connection with the delivery of the Vessel.

18.5  The Sellers shall regularly send summary reports to the Buyers and answer
      all relevant questions in respect of the progress of the construction and
      keep the Buyers informed of any material deviation from the building
      program.

18.6  Once the deposit has been lodged, the Buyers have the right to place two
      supervisors on board the vessel and/or at the shipyard premises at their
      sole risk and expense. These supervisors are on board and/or at the
      shipyard premises in the capacity of observers only, and they shall not
      interfere in any respect with the construction of the vessel. The Buyer's
      supervisors will be the site representatives of the Buyers and have the
      right to communicate directly with the Buyers. The supervisors may not
      communicate directly with or interfere with the works of Daedong, unless
      otherwise agreed with Sellers' supervisors. In order to avoid any conflict
      with the yard, the Buyers' supervisors shall follow the general directions
      of the Sellers' supervisors. The Buyers' supervisors shall have access to
      all relevant correspondence at the site office between the Sellers,
      Daedong Shipbuilding Co. Ltd and the Classification Society. In the event
      of disputes regarding the activities of the Buyers' supervisors, the
      Sellers have the right to ask the Buyers to change one or both of the
      supervisors.

19.   DELIVERY (AND EXCEPTION OF LIABILITY)

19.1  The Vessel shall be delivered by the Sellers to the Buyers immediately
      after the delivery to the Sellers from Daedong. It is hereby agreed that:

      a.  Before accepting delivery under the Contract, the Sellers shall
          consult the buyers, whose comments, if any, shall not be unreasonably
          forwarded or delayed, it being understood that acceptance delivery
          under the Contract shall be decided solely by the Sellers as the
          Sellers have the right and obligation to take delivery of the Vessel
          pursuant to the terms and conditions of the Contract.

      b.  After delivery to the Sellers pursuant to the Contract, the Buyers
          shall not have the right to reject the Vessel and/or to refuse to take
          delivery of the Vessel under this MOA, provided however that the terms
          of this MOA are met and satisfied and that the Vessel is being
          delivered to the Buyers in full accordance with this MOA.

                                      - 8 -
<Page>

      c.  During the brief period after delivery under the Contract and before
          delivery under this MOA, the Sellers shall not have the right to trade
          or operate the Vessel. The Vessel shall - without extra costs to the
          Sellers - be crewed by the Buyers' crew, who shall only accept orders
          from the Sellers, it being understood that the Sellers will give no
          such orders to the crew, except in case of any emergency.

      d.  The Vessel shall be delivered to, accepted by and taken over by the
          Buyers under this MOA in substantially the same condition as when
          delivered to the Sellers under the contract in accordance with the
          terms thereof, unless damages occur after delivery to the Sellers as a
          result of the Sellers' negligence. Thereafter the Sellers shall have
          no liability in respect of the Vessel's condition, design,
          construction or otherwise.

      e.  All manuals, certificates etc. received from Daedong shall be
          delivered to the Buyers.

19.2  Simultaneously, with the delivery under this MOA the Sellers shall assign
      to the Buyers all of their rights against Daedong regarding any guarantee
      claims and any other Post-delivery claims, rights and indemnities. The
      Sellers shall (if so requested by Daedong or the Buyers and at the Buyers'
      risk, cost and expense) assist in connection with the settlement of such
      guarantee claims, always provided that only Daedong shall be liable for
      the settlement of any such claims. The Sellers will endeavor to procure
      the execution by Daedong of a tripartite addendum to the Contract
      substantially in the form attached to MOA. If Daedong does not agree to
      execute the tripartite addendum, the Sellers shall give notice of such
      assignment to Daedong and will use reasonable endeavors to obtain
      Daedong's formal acknowledgement of and consent to such assignment. If
      such acknowledgement or consent is withheld and cannot be obtained, the
      Sellers shall hold the rights and benefits under Article IX of the
      Contract on trust for the Buyer and will exercise their rights under
      Article IX according to the directions of the Buyer, who shall reimburse
      and indemnify the Seller in respect of all and any costs and expenses with
      it may incur in exercising such rights for the benefit of the Buyer as
      aforesaid.

20.   RECISSION OF CONTRACT

      If the Sellers become entitled for any reason to rescind the Contract or
      reject the Vessel (whether pursuant to the terms of the Contract or
      otherwise) the Sellers shall notify the Buyers in writing giving them the
      reasons for such rescission or rejection. Within 2 (two) business days
      (being days when banks are open for business in both London and Monaco) of
      receipt of such notice the Buyers shall notify the Sellers whether or not
      they wish to take delivery of the Vessel as it is, when ready for
      delivery, with the benefit of any maximum price adjustment in accordance
      with the Contract. If the Buyers wish to take delivery of the Vessel, the
      Sellers will maintain the Contract and this MOA shall remain in force. If
      consequent upon the Sellers notice pursuant to this clause, the Buyers do
      not wish to take delivery, this MOA shall be cancelled and the deposit and
      interest thereon shall be released to the Buyers.

                                      - 9 -
<Page>

21.   ADJUSTMENT OF CONTRACT PRICE/ADDITIONAL PAYMENT

21.1  Any adjustment of the Contract price due to Daedong's payment of
      liquidated damages in respect of delayed delivery, speed, fuel consumption
      and/or deadweight deficiencies shall be applied towards a similar
      reduction (dollar for dollar) of the price payable by the Buyers to the
      Sellers pursuant to the MOA. The Buyers cannot refuse to take delivery
      because of any such deficiencies, otherwise than as provided by Clause 20
      above.

21.2  Any payments to be made by the Sellers according to article VI.6. of the
      Contract shall be for the account of the Buyers and shall be added to the
      purchase price payable under the MOA.

21.3  In addition to the purchase price payable under the MOA, the Buyers shall
      pay the costs incurred by the Sellers in connection with the initial
      filling up of systems with lubeoil less the lubeoil consumed during trial
      runs. Alternatively, the Buyers have the option to provide and pay for the
      lubeoil (to be in accordance with specifications) necessary for filling up
      the systems and conducting the trial runs. In the latter case it is agreed
      that:

      a.  The buyers shall not pay for the lubeoil used for the initial filling
          up, of the, system which lubeoil shall become their property upon
          delivery of the Vessel to them under this MOA.

      b.  The Buyers shall be entitled to deduct from the purchase price payable
          under the MOA an amount equal to the amount, which the Sellers may
          have received from Daedong under article VI 6 of the Contract for the
          lubeoil consumed during trial runs, and

      c.  In the event that the Vessel is not delivered to the Buyers under this
          MOA, the Sellers undertake to pay to the Buyers the original invoice
          price (not to exceed the market price) paid by the Buyers in relation
          to the lubeoil supplied to the Sellers for the purpose of filling up
          of system and conducting the trial runs.

22.   ASSIGNMENT TO NOMINEE

22.1  Prior to 30th November, 2001 the Buyers have the right to assign their
      rights and obligations hereunder to a third party, nominated by the
      Buyers, provided that the assignment has been accepted in writing by the
      Sellers, such acceptance not being necessary in connection with an
      assignment to a company controlled by the shareholders of the Buyers, and
      such acceptance otherwise not to be reasonably withheld. The Buyers shall
      remain liable for the full and timely performance of the obligations of
      such nominee buyer.

22.2  Prior to 30th November, 2001 the Sellers have the right to assign their
      rights and obligations hereunder to a third party nominated by them,
      provided that the assignment has been accepted in writing by the Buyers,
      such acceptance not being necessary in connection with an assignment to a
      company controlled by the shareholders of the Sellers, and such acceptance
      otherwise not to be unreasonably withheld. The Sellers

                                     - 10 -
<Page>

      shall remain liable for the full and timely performance of the obligations
      of such nominee sellers.

23.   CONFIDENTIALITY

23.1  The existence and contents of this MOA (and of the Contract) are strictly
      confidential and may not be disclosed to any third parties other than
      Sellers and Buyers financiers, also the Yard is to be advised, the timing
      of this to be mutually agreed.

24.   COMMISSION

24.1  1 (one) per cent commission on the Contract price payable under this MOA
      (as adjusted pursuant to Clause 21 above) is payable by the Sellers to
      Argent Shipping Ltd. upon delivery of the Vessel to the Buyers under this
      MOA, and the payment of the agreed Purchase price to the Sellers.

25.   SUBJECTS

25.1  This MOA is subject to:

      a.  The buyers re-viewing and accepting the Contract (excluding terms
          relating to price and payment terms), the Vessel's specifications,
          makers' list, major plans and a list of spares and tools to be
          delivered with the Vessel. They Buyers' acceptance is to be given in
          writing to the Sellers latest 12:00 hours, London time, Wednesday,
          18th July, 2001.

      b.  The Buyers' physical inspection and acceptance of the Vessel under
          construction, such inspection shall be undertaken immediately by the
          Buyers (without interfering with the works of Daedong or communication
          directly with Daedong, except as coordinated with the Sellers, see
          also Clause 18 above). The Buyers' acceptance to be given in writing
          to the Sellers latest 12:00 hours, London time, Wednesday, 18th July,
          2001.

      c.  The Buyers' board of directors' approval of this MOA, the Buyers
          acceptance to be given in writing to the Sellers latest 12:00 hours,
          London time, Wednesday, 18th July, 2001.

      d.  The Sellers' board of directors' approval of this MOA, the Sellers
          acceptance to be given in writing to the Buyers latest 12:00 hours,
          London time, Monday, 16th July, 2001.

25.2  Should the aforesaid subjects not have been lifted, then this MOA shall be
      null and void, and the parties shall have no claims against each other.

26.   GUARANTEE

26.1  D'Amico International Holding SAH, Luxembourg hereby guarantees to the
      Buyers the observance and performance of the Sellers' obligations in
      accordance with the terms and

                                     - 11 -
<Page>

      conditions of the Memorandum of Agreement and undertakes to indemnify the
      Buyers against any breach, non observance or non-performance of the same
      and its liability under this clause shall not be affected by any variation
      of the terms of this Memorandum of Agreement or by any extension of time,
      waiver or other indulgence with respect to the terms and conditions
      thereof.

26.2  Stelmar Shipping Ltd of Liberia hereby guarantees to-the Sellers the
      observance and performance of the Buyers' obligations in accordance with
      the terms and conditions of the Memorandum of Agreement and undertakes to
      indemnify the Sellers against any breach, non observance or
      non-performance of the same and its liability under this clause shall not
      be affected by any variation of the terms of this Memorandum of Agreement
      or by any extension of time, waiver or other indulgence with respect to
      the terms and conditions thereof.

                                    * * * * *

Monte Carlo, 18th July, 2001

For Potomac Shipping Company                      For Guarantor


---------------------------------                 ------------------------------
           President

London, 19th July, 2001

For Stelmar Shipping Ltd.                         For Guarantor


---------------------------------                 ------------------------------
          Attorney-In-Fact                        President
                                                  Stelmar Shipping Ltd.

                                      - 12 -