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                                                                 EXHIBIT 10.3(a)

                               SECURITY AGREEMENT
                               -------- ---------

     SECURITY AGREEMENT, dated as of December 31, 1996 among SEABOARD BARGE
CORPORATION, a Delaware corporation, PETROLEUM TRANSPORT CORPORATION, a Delaware
corporation, and MORAN TOWING OF DELAWARE, INC., a Delaware corporation (each, a
"Borrower", and collectively, the "Borrowers"), and THE FIRST NATIONAL BANK OF
BOSTON, as agent (hereinafter, in such capacity, the "Agent") for itself and
other banking institutions (hereinafter, collectively, the "Banks") which are or
may become parties to that certain Revolving Credit Agreement, dated as of July
11, 1994, as the same may be amended and in effect from time to time (such
agreement, as amended and in effect from time to time, the "Credit Agreement"),
among Moran Transportation Company, a Delaware corporation, ("Moran"), the
Borrowers, certain other borrowers referred to therein, the Banks and the Agent.

     WHEREAS, the Borrowers, pursuant to a separate Instrument of Adherence,
dated as of the date hereof, have become party to the Credit Agreement; and

     WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit under the Credit Agreement to the Borrowers and the
other borrowers referred to in the Credit Agreement that the Borrowers execute
and deliver to the Agent, for the benefit of the Banks and the Agent, a security
agreement in substantially the form hereof; and

     WHEREAS, each of the Borrowers wishes to grant security interests in favor
of the Agent, for the benefit of the Banks and the Agent, as herein provided;

     NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     (S)1. DEFINITIONS. All capitalized terms used herein without definitions
           -----------
shall have the respective meanings provided therefor in the Credit Agreement.
All terms defined in the Uniform Commercial Code of the Commonwealth of
Massachusetts and used herein shall have the same definitions herein as
specified therein.

     (S)2. GRANT OF SECURITY INTEREST.
           ----- -- -------- --------

           (S)2.1. COLLATERAL GRANTED. Each of the Borrowers hereby grants to
                   ---------- -------
          the Agent, for the benefit of the Banks and the Agent, to secure the


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          payment and performance in full of all of the Obligations, a security
          interest in and so pledges and assigns to the Agent, for the benefit
          of the Banks and the Agent, the following properties, assets and
          rights of such Borrower, wherever located, whether now owned or
          hereafter acquired or arising, and all proceeds and products thereof
          (all of the same being hereinafter called the "Collateral"):

                 All goods consisting of inventory, all accounts, contract
             rights for the payment of monies due, notes, bills, drafts, and all
             other debts, obligations and liabilities for the payment of monies
             due, in whatever form owing to such Borrower and all other rights
             of any such Borrower to the payment of money from any person, firm
             or corporation or any other legal entity, whether now existing or
             hereinafter arising, now or hereafter received by or belonging or
             owing to such Borrower and in each case relating to goods sold or
             leased or services rendered (but not including, for purposes of
             clarification, any amount owed in connection with the sale of or
             other disposition of any vessel), and all guaranties and securities
             therefore, all rights of an unpaid seller to merchandise or
             services and in the proceeds thereof, all chattel paper, documents
             and instruments if any, evidencing any of the foregoing rights to
             payment, and all computer programs, computer software, customer
             lists, and all recorded data of any kind or nature, regardless of
             the medium of recording evidencing or relating to any of the
             foregoing.

             (S)2.2. DELIVERY OF INSTRUMENTS, ETC. Pursuant to the terms hereof,
                     -------- -- ------------ ---
          each of the Borrowers has endorsed, assigned and delivered to the
          Agent all negotiable or non-negotiable instruments and chattel paper,
          if any, pledged by it hereunder, together with instruments of transfer
          or assignment duly executed in blank as the Agent may have specified.
          In the event that any of the Borrowers shall, after the date of this
          Agreement, acquire any other negotiable or non-negotiable instruments
          or chattel paper to be pledged by it hereunder, such Borrower shall
          forthwith endorse, assign and deliver the same to the Agent,
          accompanied by such instruments of transfer or assignment duly
          executed in blank as the Agent may from time to time specify. Each of
          the Borrowers hereby acknowledges that the Agent may, in its
          discretion, appoint one or more financial institutions to act as the
          Agent's agent in holding in custodial account instruments or other
          financial assets in which the Agent is granted a security interest
          hereunder, including, without limitation, certificates of deposit and
          other instruments evidencing short term obligations.

          (S)3. TITLE TO COLLATERAL, ETC. The Borrowers are the owners of the
                ----- -- ----------- ---
Collateral free from any adverse lien, security interest or other encumbrance,

                                       2
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except for the security interest created by this Agreement and other liens
permitted by the Credit Agreement. None of the Collateral constitutes, or is the
proceeds of, "farm products" as defined in (S)9-109(3) of the Uniform Commercial
Code of the Commonwealth of Massachusetts.

        (S)4. CONTINUOUS PERFECTION. Each Borrower's place of business or, if
              ---------- ----------
more than one, chief executive office is indicated on the Perfection Certificate
delivered by such Borrower to the Agent herewith (the "Perfection Certificate").
None of the Borrowers will change the same, or its name, identity or corporate
structure in any manner, without providing at least 30 days prior written notice
to the Agent. The Collateral, to the extent not delivered to the Agent pursuant
to (S)2.2 hereof or transferred in accordance with (S)6 hereof, will be kept at
those locations listed on the Perfection Certificate delivered by the applicable
Borrower and none of the Borrowers will remove the Collateral from such
locations without providing at least 30 days prior written notice to the Agent
unless such Collateral is moved to a location for which appropriate Uniform
Commercial Code financing statements showing such Borrower as debtor and the
Agent as secured party have been filed.

        (S)5. NO LIENS. Except for the security interest herein granted and
              -- -----
other liens permitted by the Credit Agreement, a Borrower shall be the owner of
the Collateral free from any lien, security interest or other encumbrance, and
the Borrowers shall defend the same against all claims and demands of all
persons at any time claiming the same or any interests therein adverse to the
Agent or any of the Banks. None of the Borrowers shall pledge, mortgage or
create, or suffer to exist a security interest in the Collateral in favor of any
person other than the Agent, for the benefit of the Banks and the Agent, except
for liens permitted by the Credit Agreement.

        (S)6. NO TRANSFERS. None of the Borrowers will sell or offer to sell
              -- ---------
or otherwise transfer the Collateral or any interest therein except as provided
in the Credit Agreement. It is understood and agreed that as long as an Event of
Default is not continuing, the Borrowers shall have the right, in the ordinary
course of business, to place inventory on board various vessels of the
Borrowers, the other borrowers referred to in the Credit Agreement and/or any of
their Subsidiaries, and upon such placement, such inventory so placed shall no
longer be Collateral hereunder (unless and to the extent that such inventory is
subsequently removed from such vessel and returned to "shoreside" inventory).

        (S)7. INSURANCE.
              ---------

           (S)7.1. MAINTENANCE OF INSURANCE. Each of the Borrowers will maintain
                   ----------- -- ---------
          with financially sound and reputable insurers insurance with respect
          to its properties and business against such casualties and
          contingencies as shall be in accordance with general practices of

                                       3
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          businesses engaged in similar activities in similar geographic areas.
          Such insurance shall be in such minimum amounts that none of the
          Borrowers will be deemed a co-insurer under applicable insurance laws,
          regulations and policies and otherwise shall be in such amounts,
          contain such terms, be in such forms and be for such periods as may be
          reasonably satisfactory to the Agent. In addition, all such insurance
          on the Collateral shall be payable to the Agent as loss payee for the
          benefit of the Banks and the Agent. Without limiting the foregoing,
          each of the Borrowers will maintain, in amounts and with deductibles
          equal to those generally maintained by businesses engaged in similar
          activities in similar geographic areas, general public liability
          insurance against claims of bodily injury, death or property damage
          occurring, on, in or about the properties of such Borrower.

           (S)7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
                   --------- --------
          respect of any casualty loss of any of the Collateral shall, subject
          to the rights, if any, of other parties with a prior interest in the
          property covered thereby, (a) so long as no Default or Event of
          Default has occurred and is continuing, be disbursed to the applicable
          Borrower for direct application by such Borrower solely to the repair
          or replacement of such Borrower's property so damaged or destroyed
          and/or to the payment of the Obligations and (b) in all other
          circumstances, be held by the Agent as cash collateral for the
          Obligations. The Agent may, at its sole option, disburse from time to
          time all or any part of such proceeds so held as cash collateral, upon
          such terms and conditions as the Agent may reasonably prescribe, for
          direct application by the applicable Borrower solely to the repair or
          replacement of such Borrower's property so damaged or destroyed, or
          the Agent may apply all or any part of such proceeds to the
          Obligations with the Total Commitment (if not then terminated) being
          reduced by the amount so applied to the Obligations.

           (S)7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
                   ------ -- ------------  ---
          provide for at least 30 days prior written cancellation notice to the
          Agent. In the event of failure by the Borrowers to provide and
          maintain insurance as herein provided, the Agent may, at its option,
          provide such insurance and charge the amount thereof to the Borrowers.
          The Borrowers shall furnish the Agent with certificates of insurance
          and policies evidencing compliance with the foregoing insurance
          provision.

        (S)8. GOVERNMENT CONTRACTS. Each of the Borrowers agrees that it shall
              ---------- ---------
execute all such documents, and take all such actions, as the Agent shall
determine to be necessary or appropriate from time to time under the Federal
Assignment of Claims Act of 1940, as amended, in order to confirm and assure to
the Agent its rights under this Agreement with respect to any and all Collateral
consisting of such Borrower's rights to moneys due or to become due under any

                                       4
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contracts or agreements with or orders from the United States government or any
agency or department thereof, the assignment of which is not prohibited by such
contract or agreement (collectively, "Government Receivables"). Without limiting
the generality of the foregoing, each of the Borrowers agrees that
simultaneously with the execution and delivery of this Agreement it shall
execute and deliver to the Agent a confirmatory assignment substantially in the
form of Exhibit A attached hereto (a "Confirmatory Assignment") with respect to
        ---------
each Government Receivable existing on the date hereof where the aggregate
proceeds payable to such Borrower thereunder exceeds $10,000, and within ten
(10) Business Days after the creation of any such new Government Receivable, the
applicable Borrower shall execute and deliver to the Agent a Confirmatory
Assignment with respect thereto. Notwithstanding the preceding sentence, if at
any time the aggregate proceeds payable to any Borrower under all Government
Receivables exceeds $200,000, such Borrower shall execute and deliver to the
Agent a Confirmatory Assignment with respect to each such Government Receivable.
Each of the Borrowers hereby irrevocably authorizes the Agent, or its designee,
at such Borrower's expense, after the occurrence and during the continuance of
any Event of Default, to file with the United States government (or the
appropriate agency or instrumentality thereof) a notice of each assignment of a
Government Receivable substantially in the form of Exhibit B attached hereto (a
                                                   ---------
"Notice of Assignment"), to which a copy of the relevant Confirmatory Assignment
may be attached, and appoints the Agent as such Borrower's attorney-in-fact to
execute and file any such Confirmatory Assignments, Notices of Assignment and
any ancillary documents relating thereto.

        (S)9. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. Each of the
              ----------- -- ----------- ---------- ---- ---
Borrowers shall keep or cause to be kept records of accounts which are complete
and accurate in all material respects, and from time to time upon the reasonable
request of the Agent, shall deliver to the Agent a list of the names, addresses,
face value and dates of invoices for each debtor obligated on such account
receivable. Each of the Borrowers will keep the tangible Collateral in good
order and repair, subject to normal wear and tear, and will not use the same in
violation of law or any policy of insurance thereon. The Agent, or its designee,
may inspect the Collateral, wherever located, at any reasonable time, and, if no
Default or Event of Default has occurred and is continuing, upon reasonable
prior written notice to Moran. The Borrowers will pay promptly when due all
taxes, assessments, governmental charges and levies upon the Collateral or
incurred in connection with the use or operation of such Collateral or incurred
in connection with this Agreement, provided that any such tax, assessment,
                                   --------
charge, levy or claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings and if the
applicable Borrower shall have set aside on its books adequate reserves with
respect thereto; and provided further that such Borrower will pay all such
                     -------- -------
taxes, assessments, charges, levies or claims forthwith upon the commencement of

                                       5
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proceedings to foreclose any lien that may have attached as security therefor.
Each of the Borrowers has at all times operated, and each of the Borrowers will
continue to operate, in all material respects, its business in compliance with
all applicable provisions of the federal Fair Labor Standards Act, as amended,
and with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances.

          (S)10. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
                 ---------- ---------- --------  ------------ -- ----------

           (S)10.1. EXPENSES INCURRED BY AGENT. In its discretion, the Agent
                    -------- -------- -- -----
          may discharge taxes and other encumbrances at any time levied or
          placed on any of the Collateral, make repairs thereto and pay any
          necessary filing fees. Each of the Borrowers jointly and severally
          agrees to reimburse the Agent on demand for any and all reasonable
          expenditures so made. The Agent shall have no obligation to the
          Borrowers to make any such expenditures, nor shall the making thereof
          relieve any of the Borrowers of any default.

           (S)10.2. AGENT'S OBLIGATIONS AND DUTIES. Anything herein to the
                    ------- ----------- --- ------

          contrary notwithstanding, the Borrower that is the party thereto shall
          remain liable under each contract or agreement related to the
          Collateral to be observed or performed by such Borrower thereunder.
          Neither the Agent nor any Bank shall have any obligation or liability
          under any such contract or agreement by reason of or arising out of
          this Agreement or the receipt by the Agent or any Bank of any payment
          relating to any such contract or agreement, nor shall the Agent or any
          Bank be obligated in any manner to perform any of the obligations of
          any of the Borrowers under or pursuant to any such contract or
          agreement, to make inquiry as to the nature or sufficiency of any
          payment received by the Agent or any Bank in respect of the Collateral
          or as to the sufficiency of any performance by any party under any
          such contract or agreement, to present or file any claim, to take any
          action to enforce any performance or to collect the payment of any
          amounts which may have been assigned to the Agent or to which the
          Agent or any Bank may be entitled at any time or times. The Agent's
          sole duty with respect to the custody, safe keeping and physical
          preservation of the Collateral in its possession, under *9-207 of
          the Uniform Commercial Code of the Commonwealth of Massachusetts or
          otherwise, shall be to deal with such Collateral in the same manner as
          the Agent deals with similar property for its own account.

          (S)11. SECURITIES AND DEPOSITS. The Agent may at any time after the
                 ---------- --- --------
occurrence and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities (if any) constituting
Collateral, receive any income thereon and hold such income as additional
Collateral or

                                       6
<PAGE>

apply it to the Obligations. During the continuance of an Event of Default and
whether or not any Obligations are due, the Agent may demand, sue for, collect,
or make any settlement or compromise which it reasonably deems desirable with
respect to the Collateral. Regardless of the adequacy of Collateral or any other
security for the Obligations, during the continuance of any Event of Default,
any deposits or other sums at any time credited by or due from the Agent or any
Bank to any of the Borrowers may at any time be applied to or set off against
any of the Obligations.

        (S)12. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If an Event
               ------------ -- ------- ------- --- ----- --------
of Default shall have occurred and be continuing, each of the Borrowers shall,
at the request of the Agent, notify its account debtors and other obligors on
accounts and other Collateral for which such Borrower is an obligee of the
security interest of the Agent in any account and other Collateral and that
payment thereof is to be made directly to the Agent or to any financial
institution designated by the Agent as the Agent's agent therefor, and the Agent
may itself, if an Event of Default shall have occurred and be continuing,
without notice to or demand upon any of the Borrowers, so notify account debtors
and obligors. After the making of such a request or the giving of any such
notification, each of the Borrowers shall hold any proceeds of collection of
accounts and other Collateral received by such Borrower as trustee for the
Agent, for the benefit of the Banks and the Agent, without commingling the same
with other funds of such Borrower and shall turn the same over to the Agent in
the identical form received, together with any necessary endorsements or
assignments. The Agent shall apply the proceeds of collection of accounts and
other Collateral received by the Agent to the Obligations, such proceeds to be
immediately entered after final payment in cash or solvent credits of the items
giving rise to them.

        (S)13. FURTHER ASSURANCES. Each of the Borrowers, at its own expense,
               ------- ----------
shall do, make, execute and deliver all such additional and further acts,
things, deeds, assurances and instruments as the Agent may reasonably require
more completely to vest in and assure to the Agent and the Banks their
respective rights hereunder or in any of the Collateral, including, without
limitation, (a) executing, delivering and, where appropriate, filing financing
statements and continuation statements under the Uniform Commercial Code, (b)
obtaining governmental and other third party consents and approvals, and (c)
obtaining waivers from landlords.

        (S)14. POWER OF ATTORNEY.
               ----- -- --------

           (S)14.1. APPOINTMENT AND POWERS OF AGENT. Each of the Borrowers
                    ----------- --- ------ -- -----
        hereby irrevocably constitutes and appoints the Agent and any officer
        or agent thereof, with full power of substitution, as its true and
        lawful attorneys-in-fact with full irrevocable power and authority in
        the

                                       7
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          place and stead of such Borrower or in the Agent's own name, for
          the purpose of carrying out the terms of this Agreement, to take any
          and all appropriate action and to execute any and all documents and
          instruments that may be reasonably necessary or desirable to
          accomplish the purposes of this Agreement and, without limiting the
          generality of the foregoing, hereby gives said attorneys the power and
          right, on behalf of such Borrower, without notice to or assent by such
          Borrower, to do the following:

                 (a) upon the occurrence and during the continuance of an Event
             of Default, generally to sell, transfer, pledge, make any agreement
             with respect to or otherwise deal with any of the Collateral in
             such manner as is consistent with the Uniform Commercial Code of
             the Commonwealth of Massachusetts and as fully and completely as
             though the Agent were the absolute owner thereof for all purposes,
             and to do at such Borrower's expense, at any time, or from time to
             time, all acts and things which the Agent reasonably deems
             necessary to protect, preserve or realize upon the Collateral and
             the Agent's security interest therein, in order to effect the
             intent of this Agreement, all as fully and effectively as such
             Borrower might do, including, without limitation, the execution,
             delivery and recording, in connection with any sale or other
             disposition of any Collateral, of the endorsements, assignments or
             other instruments of conveyance or transfer with respect to such
             Collateral; and

                 (b) to file such financing statements with respect hereto, with
             or without such Borrower's signature, or a photocopy of this
             Agreement in substitution for a financing statement, as the Agent
             may deem appropriate and to execute in such Borrower's name such
             financing statements and amendments thereto and continuation
             statements which may require such Borrower's signature.

             (S)14.2. RATIFICATION BY THE BORROWERS. To the extent permitted by
                      ------------ -- --- ---------
          law, each of the Borrowers hereby ratifies all that said attorneys
          shall lawfully do or cause to be done by virtue hereof (except for
          acts of gross negligence or willful misconduct). This power of
          attorney is a power coupled with an interest and shall be irrevocable.

             (S)14.3. NO DUTY ON AGENT. The powers conferred on the Agent
                      -- ---- -- -----
          hereunder are solely to protect the interests of the Agent and the
          Banks in the Collateral and shall not impose any duty upon the Agent
          to exercise any such powers. The Agent shall be accountable only for
          the amounts that it actually receives as a result of the exercise of
          such powers and neither it nor any of its officers, directors,
          employees or agents shall be

                                       8
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        responsible to any of the Borrowers for any act or failure to act,
        except for the Agent's own gross negligence or willful misconduct.

        (S)15. REMEDIES. If an Event of Default shall have occurred and be
               --------
continuing, the Agent may, without notice to or demand upon any of the
Borrowers, declare this Agreement to be in default, and the Agent shall
thereafter have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code, including, without limitation, the
right to take possession of the Collateral, and for that purpose the Agent may,
so far as the Borrowers can give authority therefor, enter upon any premises on
which the Collateral may be situated and remove the same therefrom. The Agent
may in its discretion require any of the Borrowers to assemble all or any part
of the Collateral at such location or locations within the state(s) of such
Borrower's principal office(s) or at such other locations as the Agent may
designate and which are reasonably convenient to such Borrower and the Agent.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, the Agent shall give Moran
(and Moran shall give the Borrowers) at least ten Business Days prior written
notice of the time and place of any public sale of Collateral or of the time
after which any private sale or any other intended disposition is to be made.
Each of the Borrowers hereby acknowledges that ten Business Days prior written
notice of such sale or sales to Moran shall be reasonable notice. In addition,
each of the Borrowers waives any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of the Agent's rights hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights with respect
thereto.

        (S)16. NO WAIVER, ETC. Each of the Borrowers waives demand, notice,
               -- ------- ---
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description (except as provided
herein or in the other Loan Documents). With respect to both the Obligations and
the Collateral, each of the Borrowers assents to any extension or postponement
of the time of payment or any other indulgence, to any substitution, exchange or
release of or failure to perfect any security interest in any Collateral, to the
addition or release of any party or person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Agent may deem advisable. The Agent shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof as set forth in (S)10.2
hereof. The Agent shall not be deemed to have waived any of its rights upon or
under the Obligations or the Collateral unless such waiver

                                       9
<PAGE>

shall be in writing and signed by the Agent with the consent of the Majority
Banks. No delay or omission on the part of the Agent in exercising any right
shall operate as a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right on any future
occasion. All rights and remedies of the Agent with respect to the Obligations
or the Collateral, whether evidenced hereby or by any other instrument or
papers, shall be cumulative and may be exercised singularly, alternatively,
successively or concurrently at such time or at such times as the Agent deems
expedient.

        (S)17. MARSHALLING. Neither the Agent nor any Bank shall be required
               -----------
to marshal any present or future collateral security (including but not limited
to this Agreement and the Collateral) for, or other assurances of payment of,
the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights of the
Agent hereunder and of the Agent or any Bank in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, each of the Borrowers hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Agent's rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
each of the Borrowers hereby irrevocably waives the benefits of all such laws.

        (S)18. PROCEEDS OF DISPOSITIONS; EXPENSES. The Borrowers shall pay to
               -------- -- ------------- --------
the Agent on demand any and all reasonable expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by the Agent in protecting,
preserving or enforcing the Agent's rights under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses, the
residue of any proceeds of collection or sale of the Obligations or Collateral
shall, to the extent actually received in or reduced to cash, be applied to the
payment of the Obligations in such order or preference as is provided in the
Credit Agreement, proper allowance and provision being made for any Obligations
not then due. Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Section 9-504(1)(c) of the
Uniform Commercial Code of the Commonwealth of Massachusetts, any excess shall
be returned to the Borrowers, and the Borrowers shall remain jointly and
severally liable for any deficiency in the payment of the Obligations.

        (S)19. OVERDUE AMOUNTS. Until paid, all amounts due and payable by
               ------- -------
the Borrowers hereunder shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the rate of interest for
overdue principal set forth in the Credit Agreement.

                                       10
<PAGE>

        (S)20. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS
               --------- ---- ------- -- ------------
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
Each of the Borrowers agrees that any suit for the enforcement of this Agreement
may be brought in the courts of the Commonwealth of Massachusetts or any federal
court sitting therein and consents to the non-exclusive jurisdiction of such
court and to service of process in any such suit being made upon such Borrower
by mail at the address specified in (S)20 of the Credit Agreement. Each of the
Borrowers hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such court or that such suit is brought in an
inconvenient court.

        (S)21. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS WAIVES ITS RIGHT TO A
               ------ -- ---- -----
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, each
of the Borrowers waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual or incidental damages. Each of the Borrowers (a) certifies that neither
the Agent or any Bank nor any representative, agent or attorney of the Agent or
any Bank has represented, expressly or otherwise, that the Agent or any Bank
would not, in the event of litigation, seek to enforce the foregoing waivers and
(b) acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks are
relying upon, among other things, the waivers and certifications contained in
this (S)21.

        (S)22. MISCELLANEOUS. The headings of each section of this Agreement
               -------------
are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon
each of the Borrowers and its respective successors and assigns, and shall inure
to the benefit of the Agent, the Banks and their respective successors and
assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought. Notices hereunder shall be given in the manner and to

                                       11
<PAGE>

the addresses set forth in (S)20 of the Credit Agreement. Each of the Borrowers
acknowledges receipt of a copy of this Agreement.

                                       12
<PAGE>

          IN WITNESS WHEREOF, intending to be legally bound, each of the
Borrowers has caused this Agreement to be duly executed as of the date first
above written.
                         SEABOARD BARGE CORPORATION


                         By:  /s/ Alan Marchisotto
                              ---------------------
                         Name: Alan Marchisotto
                         Title: Secretary

                         PETROLEUM TRANSPORT CORPORATION


                         By: /s/ Alan Marchisotto
                             ---------------------
                         Name: Alan Marchisotto
                         Title: Secretary

                         MORAN TOWING OF DELAWARE, INC.


                         By: /s/ Jeffrey J. McAulay
                             -----------------------
                         Name: Jeffrey J. McAulay
                         Title: Secretary


Accepted:
---------

THE FIRST NATIONAL BANK OF BOSTON
 as Agent

By: /s/ Victor Garcia
    -------------------
   Name: Victor Garcia
   Title: Vice President

                                       13
<PAGE>

                         CERTIFICATE OF ACKNOWLEDGMENT

STATE OF  CONNECTICUT  )
          -------------)
                       )  ss.
COUNTY OF FAIRFIELD    )
          -------------)

     Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 23rd day of December, 1996, personally appeared Jeffrey J.
McAulay to me known personally, and who, being by me duly sworn, deposes and
says that he is the Vice President of Moran Towing of Delaware, Inc., and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors, and said acknowledged said instrument to be the free
act and deed of said corporation.

                              /s/ Daniel Klaben
                              ---------------------
                              Notary Public
                              My commission expires: October 31, 1998

                                       16
<PAGE>

                         CERTIFICATE OF ACKNOWLEDGMENT

STATE OF  CONNECTICUT  )
          -------------)
                       )  ss.
COUNTY OF FAIRFIELD    )
          -------------)

     Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 23rd day of December, 1996, personally appeared Alan
Marchisotto to me known personally, and who, being by me duly sworn, deposes and
says that he is the Secretary of Seaboard Barge Corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and said acknowledged said instrument to be the free act
and deed of said corporation.

                             /s/ Daniel Klaben
                             --------------------
                             Notary Public
                             My commission expires: October 31, 1998

                                       15
<PAGE>

                         CERTIFICATE OF ACKNOWLEDGMENT

STATE OF  CONNECTICUT   )
          --------------)
                        )  ss.
COUNTY OF FAIRFIELD     )
          --------------)

     Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 23rd day of December, 1996, personally appeared Alan
Marchisotto to me known personally, and who, being by me duly sworn, deposes and
says that he is the Secretary of Petroleum Transport Corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and said acknowledged said instrument to be the free act
and deed of said corporation.

                             /s/ Daniel Klaben
                             -----------------
                             Notary Public
                             My commission expires: October 31, 1998

                                       14
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------


                  FORM OF CONFIRMATORY ASSIGNMENT OF CONTRACT
                  ---- -- ------------ ---------- -- --------

          This ASSIGNMENT, dated as of ____________________, is by [INSERT NAME
OF APPLICABLE BORROWER], a [_________________] corporation (the "Debtor") in
favor of The First National Bank of Boston (the "Agent") as agent for itself and
certain other lenders (the "Lenders").

          WHEREAS, the Debtor is party to Contract No. ________________ dated
____________________________ between the Debtor and ___________________ (the
"Contract"); and

          WHEREAS, the Debtor and the Agent have entered into a certain Security
Agreement, dated as of December __, 1996 (the "Security Agreement"), pursuant to
which the Debtor has granted to the Agent, for the benefit of the Lenders, a
security interest in certain assets of the Debtor, including all of the Debtor's
rights in and to any interest in and to all money due or to become due under the
Contract, to secure the Obligations referred to in the Security Agreement;

          NOW, THEREFORE, the Debtor hereby confirms, acknowledges and agrees
that, pursuant to and subject to the terms of the Security Agreement, the Debtor
hereby assigns, transfers, pledges and grants to the Agent, for the benefit of
itself and the Lenders, a security interest in all of the Debtor's right, title
and interest in and to all moneys due or to become due under the Contract.

          EXECUTED as of the date first above written.

                              [____________________________]


                              By:____________________________
                              Title:

                                       17
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------


                        FORM OF NOTICE OF ASSIGNMENT OF
                        ACCOUNTS RECEIVABLE AS SECURITY
                        -------------------------------

                       The First National Bank of Boston


                                     Date:

To:  [Contracting Official or Head of Agency, and Disbursing Official]


Re:  Contractor: [_______________________]
     Address:
     Contract Number:
     Made by the United States of America
     Department:
     Division:
     Address:

For:

Dated:

Ladies and Gentlemen:

          PLEASE TAKE NOTICE that moneys due or to become due to [INSERT NAME OF
APPLICABLE BORROWER] (the "Contractor") under the contract described above have
been assigned to The First National Bank of Boston (the "Agent"), as agent for
itself and certain other lenders (the "Lenders") under the provisions of the
Assignment of Claims Act of 1940, as amended (31 U.S.C. (S)3727, 41 U.S.C.
(S)315).

          A true copy of the instrument of assignment executed by the Contractor
on December __, 1996 is attached to the original notice.

          Payments due or to become due to the Debtor under the contract
described above should be made to the undersigned assignee.

          Please return to the undersigned (in the enclosed, self-addressed
stamped envelope) the three enclosed copies of this notice with appropriate
notations showing the date and hour of receipt, and signed by the person
acknowledging receipt on behalf of the addressee.

                                       18
<PAGE>

                              Very truly yours,

                              THE FIRST NATIONAL BANK OF BOSTON, as agent for
                              the secured parties under that certain Security
                              Agreement dated as of December __, 1996


                              By:____________________________________
                                   Authorized Official
                                   100 Federal Street
                                   Boston, MA 02110


                           ACKNOWLEDGMENT OF RECEIPT
                           -------------------------


          Receipt is acknowledged of the above notice and a copy of the
instrument of assignment.  They were received at ____________________ a.m./p.m.
on _____________________, 199_.

                              ________________________________
                              Signature

                              ________________________________
                              Title:

On behalf of


[Name of addressee of this notice.]

                                       19