Document:

LOAN AND SECURITY AGREEMENT

                                 by and between

         MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC., ACTING THROUGH
                       ITS DIVISION, MERRILL LYNCH CAPITAL
                                    As Lender

                                       and

                            STRATFORD SHIPPING CORP.
                                       and
                            SHEFFIELD MARITIME CORP.
                                   As Debtors

                           Dated as of August 26, 2004

                           LOAN AND SECURITY AGREEMENT

     LOAN AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of August 26,
2004, by and between MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC., ACTING
THROUGH ITS DIVISION, MERRILL LYNCH CAPITAL ("LENDER"), a Delaware corporation,
as lender, and STRATFORD SHIPPING CORP. ("STRATFORD SHIPPING"), and SHEFFIELD
MARITIME CORP. ("SHEFFIELD MARITIME"), as borrowers (each of Stratford Shipping
and Sheffield Maritime, a "DEBTOR" and collectively "Debtors"), each a
corporation organized under the laws of the Republic of the Marshall Islands
with an address at Trust Company Complex, Ajeltake Island, P.O. Box 1405,
Majuro, Marshall Islands, MH 96960. In consideration of the mutual agreements
contained herein, the parties hereto agree as follows:

                                    RECITALS

     A. The Debtors have entered into a series of transactions, pursuant to
which (i) Stratford Shipping has purchased the Panama-registered bulk carrier
M/V IROQUOIS MAIDEN (ex-M/V VIENNA WOOD N), IMO No. 8109008, currently under
bareboat charter registry in the Republic of the Philippines, under Philippine
flag with Official Number MNLA 000620, Gross Tons 24,783, Call Sign DYBM, and
port of registry, Manila; and (ii) Sheffield Maritime has purchased the
Panama-registered bulk carrier M/V MANHATTAN PRINCESS (ex-M/V CHIOS LUCK), IMO
No. 8029715, currently under bareboat charter registry in the Republic of the
Philippines, under Philippine flag with Official Number MNLA 000621, Gross Tons
24,783, Call Sign DYBX, and port of registry, Manila.

     B. By this Agreement, the Debtors desire, among other things, (i) to
provide for the making of a single Loan by Lender on the same date to the
Debtors in an aggregate principal amount not to exceed U.S.$15,000,000.00 to
enable Stratford Shipping to finance its acquisition of the IROQUOIS MAIDEN and
Sheffield Maritime to finance its acquisition of the MANHATTAN PRINCESS, (ii) to
provide for the issuance by the Debtors to Lender of one joint and several Note
evidencing the consolidated Loan to be made by Lender to the Debtors as herein
provided, and (iii) to provide for the assignment and mortgage by each Debtor to
Lender of, among other things, all such Debtor's right, title and interest in
and to its respective Vessel and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof, as security for the
Debtors' obligations to Lender.

     C. Lender is willing to make the Loan to the Debtors on the terms and
conditions of this Agreement in partial consideration for the Debtors' agreement
to be jointly and severally liable for all Obligations and to grant and to cause
certain other parties to grant to Lender security interests in the Collateral as
provided hereunder and to grant to Lender a Mortgage on the whole of each
Vessel.

     D. All things have been done to make the Note, when issued, executed and
delivered to Lender by the Debtors hereunder, the legal, valid and binding joint
and several obligation of the Debtors.

SECTION 1. DEFINITIONS.

     1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following defined meanings, unless the context otherwise requires (such
terms to be equally applicable to both singular and plural forms of the terms
defined):

     "AFFILIATE" of any specified Person shall mean any other Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person shall
mean the power, direct or indirect, to vote forty percent (40%) or more of the
securities having voting power for the election of directors of such Person, or
otherwise to direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.

     "AGREEMENT", "HEREOF", "HERETO", "HEREUNDER" and words of similar import
shall mean this Loan and Security Agreement, as the same may from time to time
be amended, modified or supplemented.

     "APPLICABLE INTEREST RATE" shall mean a fixed rate equal to 3.75% plus the
Index Rate. Interest shall be calculated on the basis of a 360-day year with
30-day months.

     "APPRAISAL VALUE" shall mean the fair market value of each Vessel as
determined by an opinion of value rendered by a recognized, independent
appraisal firm, mutually acceptable to all parties, and at the Debtors' cost.
The appraisal will include a breakdown of the vessel value components for
(charter-free) vessel. Such amount shall be determined not more than fifteen
(15) days prior to the date of the drawdown of the Loan.

     "ASSIGNED CHARTERS" shall mean the Head Charters and the subcharters.

     "ASSIGNMENTS" shall mean, collectively, the Earnings Assignments and the
Assignments of Insurances.

     "ASSIGNMENT OF INSURANCES" shall mean each of the first priority
assignments of insurances granted in favor of Lender in form and substance
satisfactory to Lender.

     "BREAKAGE COSTS" shall mean any costs incurred by Lender as a result of
payment of principal or interest other than on a scheduled Installment Payment
Date in accordance with the scheduled amortization of the Loan.

     "BUSINESS DAY" shall mean a day other than a Saturday, Sunday or legal
holiday under the laws of the State of New York.

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act,
42 U.S.C. Section 9601 et seq. and as further amended from time to time.

     "CHARTERER'S CONSENT" shall mean the consent and subordination of each
charterer of an Assigned Charter to the Earnings Assignments, in form and
substance acceptable to Lender.

                                        2

     "CLASSIFICATION SOCIETY" shall mean a classification society reasonably
acceptable to Lender, including, but not limited to, Lloyd's Register of
Shipping, in the case of the IROQUOIS MAIDEN, and Det Norske Veritas, in the
case of the MANHATTAN PRINCESS.

     "CODE" or "UCC" shall mean the Uniform Commercial Code as from time to time
in effect in any applicable jurisdiction.

     "COLLATERAL" as defined in Section 6.1 hereof.

     "COMMITMENT" shall mean the obligation of Lender to make the Loan in the
aggregate principal amount specified in Section 2.1 hereof.

     "CURRENT ASSETS" shall mean the aggregate (as of the date of calculation)
of each Debtor's cash, marketable securities, trade and other receivables
realizable within one (1) year, inventories and prepaid expenses which are
charged to income within one (1) year as stated in the Debtors' consolidated
financial statements required to be delivered pursuant to Section 5.5 hereof.

     "CURRENT LIABILITIES" shall mean the aggregate (as of the date of
calculation) of all liabilities of each Debtor falling due on demand or within
one (1) year, excluding the portion of Total Long-Term Debt falling due on
demand or within one (1) year as stated in its consolidated financial statements
then most recently required to be delivered pursuant to Section 5.5 hereof.

     "DEBTOR" as defined in the preamble of this Agreement.

     "DEFAULT" shall mean any event which, with notice, lapse of time or both,
would constitute an Event of Default.

     "EARNINGS" as defined in the Earnings Assignments.

     "EARNINGS ASSIGNMENTS" shall mean the first priority assignment of charter
parties, charter hire, freights and earnings granted by each Debtor with respect
to its Vessel and the assignments of charter parties, charter hire and earnings
granted by any other disponent owner or intermediate charterer with respect to
such Vessel, in favor of Lender in form and substance satisfactory to Lender and
its counsel.

     "ENVIRONMENTAL ACTION" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of non-compliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement arising under any Environmental
Law or Environmental Permit relating to Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment in
connection with or arising from exposure to or the actual or potential release
of Hazardous Materials, including (a) by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages,
and (b) by any Governmental Authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.

                                       3

     "ENVIRONMENTAL EVENT" shall mean (i) an environmental event that has
occurred or any environmental condition that is discovered in, on, beneath, from
or involving any Vessel (including the presence, emission or release of
Hazardous Materials or the violation of any applicable Environmental Law) for
which a remediation or reporting could reasonably be required under applicable
Environmental Law, or (ii) notification received by any Debtor that a Debtor or
any Vessel is the subject of an Environmental Action relating to such Vessel
that could reasonably be expected to result in any ordered remediation or
corrective action or other material liability under applicable Environmental
Law.

     "ENVIRONMENTAL LAW" shall mean any and all applicable international,
foreign, federal, state, regional and local Laws (as well as obligations, duties
and requirements relating thereto under common law) relating to: (a) emissions,
discharges, spills, releases or threatened releases of pollutants, contaminants,
Hazardous Materials, materials containing Hazardous Materials, or hazardous or
toxic materials or wastes into ambient air, surface water (including, without
limitation, all inland and ocean waters), groundwater, watercourses, publicly or
privately-owned treatment works, drains, sewer systems, wetlands, septic systems
or onto land; (b) the use, treatment, storage, disposal, handling,
manufacturing, transportation, or shipment of Hazardous Materials, materials
containing Hazardous Materials or hazardous and/or toxic wastes, materials,
products or by-products (or of equipment or apparatus containing Hazardous
Materials); or (c) pollution or the protection of human health, safety or the
environment from exposure to or injury or damage caused by Hazardous Materials.
Without limitation, "ENVIRONMENTAL LAW" includes CERCLA and OPA 90 and IMO 13(g)
(when and if the latter comes into effect). Debtors hereby agree to comply with,
take or abstain from, any action, as the case may be, as the International
Maritime Organization may require.

     "ENVIRONMENTAL PERMIT" means any Permit, approval, identification number,
license or other authorization required under any Environmental Law.

     "EVENT OF DEFAULT" as defined in Section 7 hereof.

     "EVENT OF LOSS" shall mean, with respect to a Vessel, the actual or
constructive loss or the disappearance of such Vessel or the loss of use
thereof, due to theft, destruction, damage beyond repair or damage from any
reason whatsoever, to an extent, in the sole judgment of Lender, which makes
repair uneconomical, or rendition thereof unfit for normal use, or the
condemnation, confiscation or seizure of, or requisition of title to or use of,
such Vessel by any governmental authority or any other Person, whether or not
acting under color of governmental authority.

     "FINANCIAL STATEMENTS" shall mean, as to any Person or group of Persons,
the balance sheets and statements of income and cash flows, prepared in
accordance with GAAP, of such Person or group of Persons as required from time
to time to be provided by the Debtors under this Agreement.

     "FUNDING DATE" shall mean the date on which Lender shall make the Loan to
the Debtors pursuant hereto.

                                       4

     "GAAP" shall mean generally accepted accounting principles consistently
applied in the United States.

     "GUARANTOR" shall mean each of the entities listed on Schedule 1 hereto, as
the same may be hereafter amended or modified.

     "GUARANTY" shall mean a joint and several guaranty of all Obligations given
by the Guarantors in form and substance satisfactory to Lender.

     "HAZARDOUS MATERIALS" shall mean (a) hazardous materials, hazardous wastes,
and hazardous substances as those or similar terms are defined under any
Environmental Laws, including, but not limited to, the following: the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., as amended from
time to time, the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., as amended from time to time, CERCLA, the Clean Water Act, 33 U.S.C.
Section 1251 et seq., as amended from time to time, the Clean Air Act, 42 U.S.C.
Section 7401 et seq., as amended from time to time, and/or the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., as amended from time to time, OPA
90; (b) petroleum and petroleum products, including crude oil and any fractions
thereof; (c) natural gas, synthetic gas, and any mixtures thereof; (d) asbestos
and/or any material which contains any hydrated mineral silicate, including, but
not limited to, chrysolite, amosite, crocidolite, tremolite, anthophylite and/or
actinolite, whether friable or non-friable; (e) polychlorinated biphenyls
("PCBS"), or PCB-containing materials or fluids; (f) radon; (g) any other
hazardous radioactive, toxic or noxious substance, material, pollutant, or
solid, liquid or gaseous waste; and (h) any hazardous substance that, whether by
its nature or its use, is subject to regulation under any Environmental Law or
with respect to which any international, federal, state or local Environmental
Law or governmental agency requires environmental investigation, monitoring or
remediation.

     "HEAD CHARTER" shall mean each of the bareboat charter parties between a
Debtor and Intermodal Shipping, Inc., registered under the laws of the Republic
of the Philippines, as any such charter is amended, extended or renewed from
time to time.

     "HIRE" shall mean all freights, earnings and charter hire under any and all
charters and contracts of affreightment, or requiring or contemplating the use
of, a Vessel from time to time, together with additional hire, supplemental
hire, requisition hire and any other amounts paid on account of the use or
employment of such Vessel.

     "INDEBTEDNESS" shall mean (i) all indebtedness or other obligation for
borrowed money or for the deferred purchase price of property or services which
in accordance with GAAP would be shown on the liability side of the balance
sheet of the Debtors, (ii) the face amount of all letters of credit issued for
the account of any Debtor and, without duplication, all drafts drawn thereunder,
(iii) obligations as lessee under any lease which shall have been or should be,
in accordance with GAAP, recorded as capital leases, (iv) obligations under
direct or indirect guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of other Persons of the
kinds referred to in clause (i), (ii) or (iii) above.

                                       5

     "INDEX RATE" shall mean the five (5) year swap rate as published on
Bloomberg Professional Services screen "USSW," determined as of the closing swap
rate two (2) Business Days prior to the Funding Date.

     "INSTALLMENT PAYMENT DATE" shall mean, with the respect to the Note, each
of the sixty (60) consecutive monthly dates during the Note Term, the first of
which shall be October 1, 2004, on which a regular installment of principal and
interest is due on the Note. If any such date is not a Business Day, then any
amounts owing on such day shall be payable on the next succeeding Business Day.

     "INTEREST PERIOD" shall mean, during the Note Term, each monthly period
ending on an Installment Payment Date, provided the first Interest Period shall
commence on the Funding Date and end on the first Installment Payment Date, and
the last Interest Period of the Fixed Term shall end on the Maturity Date.

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

     "LATE CHARGE RATE" shall mean a rate per annum equal to five (5) percentage
points higher than the Applicable Interest Rate, however, in no event to exceed
the highest rate allowed by applicable law, if any.

     "LENDER" as defined in the preamble of this Agreement.

     "LETTER OF UNDERTAKING" shall mean a Letter of Undertaking delivered to
Lender by the Manager of each Vessel in the form attached hereto as Exhibit A.

     "LIENS" shall mean any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on common law, maritime law, statute, contract or
conveyance, including, but not limited to, the security interest lien arising
from any pledge, mortgage, chattel mortgage, charge, encumbrance, conditional
sale or trust receipt, or from a charter, consignment or bailment for security
purposes and any maritime lien, right of retention, tax lien, mechanic's lien,
materialman's lien, workman's lien, repairman's lien, any financing statement or
other similar charge or encumbrance.

     "LINER GUARANTORS" as identified on Schedule 1 hereto.

     "LOAN" shall mean the loan made by Lender to the Debtors, as provided in
Section 2.1 and evidenced by the Note, as provided for in Section 2.2(d) of this
Agreement.

     "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note, the
Mortgages, the Assignments, the Pledge Agreements, the Guaranties, the Letter of
Undertaking, the Assigned Charters and any consents or other instruments given
with respect to the foregoing, each as may hereinafter be amended, modified or
supplemented pursuant to the terms hereof or thereof respectively.

                                       6

     "MANAGEMENT AGREEMENT" shall mean an agreement to be entered into between
the Manager and the disponent owner of each Vessel, in form and substance
acceptable to Lender, and providing for the waiver by the Manager of any lien or
security interest in such Vessel.

     "MANAGER" shall mean TBS Shipping Services, Inc., a New York corporation,
with an address at Commerce Building, Suite 306, One Chancery Lane, Hamilton HM
12, Bermuda.

     "MATERIAL ADVERSE EFFECT" shall mean any fact or circumstance which (i)
materially and adversely affects the business, operations, property or condition
of either the Debtors or any charterer of an Assigned Charter, (ii) has a
material adverse effect on the ability of either the Debtors or any charterer of
an Assigned Charterto perform its respective obligations under this Agreement,
the Note or the other Loan Documents to which it is a party, or (iii) has a
material adverse effect on the Collateral or Lender's security interest therein
(including, without limitation, any event, fact or circumstance which results in
the imposition of any Lien (other than a Permitted Lien not discharged within
the periods provided in this Agreement or the Loan Documents).

     "MATURITY DATE" shall mean the last day of the Note Term.

     "MORTGAGE" shall mean each Panamanian first preferred ship mortgage, as the
same may hereafter be amended and/or supplemented from time to time, granted by
a Debtor on the whole of its Vessel, in favor of Lender, to secure the
Obligations contemplated in this Agreement.

     "NOTE" shall mean the joint and several secured promissory note of the
Debtors, substantially in the form of Exhibit B attached hereto (including
Schedule A thereto), evidencing the Loan made by Lender to the Debtors
hereunder, as described in Section 2.2 hereof.

     "NOTE TERM" shall mean the period commencing with the Funding Date and
ending on September 1, 2009.

     "OBLIGATIONS" shall mean (i) the aggregate unpaid principal amount of, and
accrued interest on, the Note; (ii) all other obligations and liabilities of the
Debtors and any of them, now existing or hereafter incurred, under, arising out
of or in connection with this Agreement, the Loan, the Note or any of the other
Loan Documents; and (iii) any and all other present and future indebtedness,
obligations and liabilities of any kind under the Loan Documents whatsoever of
any Debtor to Lender, whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, secured or unsecured, matured or
unmatured and whether originally contracted with Lender or otherwise acquired by
Lender or from time to time reduced and thereafter increased.

     "OPA 90" means the United States Oil Pollution Act, 1990, as amended from
time to time, and the Environmental Law of any jurisdiction, whether or not in
effect on the Funding Date, the violation of which includes either strict
liability of any Debtor or unlimited liability of any Debtor.

     "OTHER SHIPOWNERS" shall mean the entities identified on Schedule 2 hereto
and the term shall be deemed to include any current or future Affiliate
hereafter acquiring one or more vessels.

                                       7

     "PERMITTED LIENS", with respect to a Vessel, shall have the meaning
assigned to it in the Mortgage of such Vessel only in respect of such Vessel and
generally it shall also mean the following: (a) Liens securing payment of the
Obligations, granted pursuant to any Loan Document; (b) Liens by operation of
law for taxes, assessments or other governmental charges or levies not at the
time delinquent or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books; and where, by posting of bonds or other substitute
security, there is no material risk of attachment or other levy on any
Collateral; (c) Liens incurred by operation of law in the ordinary course of
business in connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance benefits, or to secure performance of
statutory obligations; (d) deposits to secure the performance of statutory
obligations incurred in the ordinary course of business; and (e) any interest or
title of a lessor or licensor under any lease or license entered into by a
Debtor in the ordinary course of business and covering only the assets leased or
licensed.

     "PERSON" shall mean any individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority (whether domestic or foreign) or other entity of whatever
nature.

     "PLEDGE" shall mean a pledge and assignment by Pledgor of its legal and
beneficial shareholding interest in each Debtor in form and substance
satisfactory to Lender.

     "PLEDGOR" shall mean Westbrook Holdings, Ltd., a Marshall Islands
corporation.

     "POOL" as defined in the Pooling Agreement.

     "POOLING AGREEMENT" shall mean that certain agreement among the Debtors,
the Other Shipowners, the Liner Guarantors and TBS Worldwide Services, Inc., as
amended from time to time and as the same may from time to time add or delete
one or more parties. The form of the Pooling Agreement is attached as part of
each of the Time Charter Party dated June 9, 2004 between Pacific Rim Shipping
Corp. and TBS Worldwide Services Inc. with respect to the IROQUOIS MAIDEN and
the Time Charter Party dated June 16, 2004 between the same parties in respect
of the MANHATTAN PRINCESS.

     "PREPAYMENT DATE" shall mean, as to the Note, the date on which prepayment
of the Note is to be made pursuant to notice given in compliance with Section
2.4(b) of this Agreement.

     "PROCEEDS" shall have the meaning assigned to it in the Code and, in any
event, shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any Debtor from time to
time with respect to its Vessel or other Collateral; (ii) any and all payments
(in any form whatsoever) made or due and payable to a Debtor from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all and any part of a Vessel by any governmental body, authority,
bureau or agency of any other Person (whether or not acting under color of
governmental authority); and (iii) accounts arising out of, any charter,
contract of affreightment or chattel paper evidencing, any lease or charter of,
any and all other rents, hire or profits or other amounts from time to time paid
or

                                       8

payable in connection with, the Vessel. In no event shall the term be construed
more narrowly than the meaning set forth in the Assignments and the Mortgage.

     "PROHIBITED JURISDICTION" means any country or jurisdiction, from time to
time, (a) that, at any relevant time, is subject of a prohibition order (or any
similar order or directive), sanctions or restrictions promulgated or
administered by the Office of Foreign Assets Control of the United States
Treasury Department, or (b) in which, or for which, Lender or any assignee
thereof is otherwise prohibited or restricted, under laws, regulations,
sanctions or restrictions applicable to it or its business, from extending
credit, transferring property or assets, engaging in or facilitating trade or
other economic activity, or otherwise doing business.

     "PROHIBITED PERSON" means any Person appearing on the Specially Designated
Nationals List compiled and disseminated by the Office of Foreign Assets Control
of the United States Treasury Department, as the same may be amended from time
to time.

     "SUBCHARTERS" shall mean each time charter of a Vessel, including, without
limitation, the charter parties identified on Schedule 5 hereto and any other
contracts for use or employment of any Vessel, other than the Head Charters.

     "VESSEL" shall mean each of the vessels IROQUOIS MAIDEN and MANHATTAN
PRINCESS, together with all of its machinery, anchors, cables, chains, rigging,
tackle, fittings, tools, pumps, pumping equipment, gear, apparel, furniture,
appliances, equipment, spare and replacement parts and all other appurtenances
thereunto appertaining or belonging, whether now owned or hereafter acquired and
whether on board or not, and also any and all additions, improvements and
replacements made in or to such Vessel or any part thereof or in or to any
equipment and appurtenances thereto appertaining or belonging.

     "WORKING CAPITAL" shall mean Current Assets minus Current Liabilities.

     1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP.

SECTION 2. AMOUNT AND TERMS OF LOAN.

     2.1 COMMITMENT. Subject to the terms and conditions of this Agreement,
Lender agrees to make a single Loan to the Debtors in the principal amount of
U.S.$15,000,000.00. Lender shall have no obligation to make the Loan to the
Debtors after September 1, 2004.

     2.2 THE NOTE.

          (a) Note Term. The Loan shall be evidenced by the Note, which Note (i)
shall be dated the Funding Date; (ii) shall be for a term equal to the Note
Term, commencing on the Funding Date and ending on the Maturity Date, and (iii)
shall be payable on each Installment Payment Date in sixty (60) consecutive
monthly installments of principal and interest, commencing October 1, 2004, with
the first installment to be in the amount of U.S.$434,013.37, each of the next
twenty-three (23) such installments to be in the amount of U.S.$414,878.37, and
the next thirty-six (36) such installments to be in the amount of
U.S.$210,444.71, provided, further, that the Note shall bear interest from the
date thereof on the unpaid principal amount

                                       9

thereof at the Applicable Interest Rate at all times while any amounts are
outstanding under the Note during the Note Term.

          (b) Interest. Interest on the Note shall be fixed two (2) Business
Days prior to the Funding Date.

          (c) Cross-Collateralization. The Note and all Obligations shall be
equally secured by all Collateral. No lien securing the Obligations or any of
them shall be released or deemed released unless and until all Obligations are
fully and finally repaid and discharged except as otherwise provided in an Event
of Loss.

     2.3 LATE CHARGES. Any amount of principal or interest not paid on or before
the third Business Day following the due date thereof under the Note shall, to
the extent permitted by applicable law, bear late charges thereon, calculated at
the Late Charge Rate, from the due date thereof until such amount shall be paid
in full. Debtors shall continue to pay in full regular installments under the
Note as and when due, notwithstanding any Event of Loss, until all Obligations
are entirely paid and performed.

     2.4 PREPAYMENT.

          (a) An Event of Loss. In the event that either Vessel shall suffer an
Event of Loss and unless the Lender agrees in writing to a lesser prepayment
amount, the Debtors shall make a prepayment of the Note, in an amount equal to
the lesser of (i) all Obligations remaining due under the Loan Documents, or
(ii) 130% of the then outstanding principal amount of the Loan multiplied by a
fraction, the numerator of which is the Appraisal Value of the Vessel suffering
an Event of Loss and the denominator of which is the aggregate Appraisal Value
of the lost Vessel and the other Vessel then remaining (with Appraised Value
determined as at the time immediately preceding such Event of Loss), together
with any other amounts then due under this Agreement, the Note or any other Loan
Document, on the next Installment Payment Date after (1) the earlier of 180 days
after the date of such Event of Loss, or (2) the date the Borrower or Lender
receives all insurance proceeds in respect of such Event of Loss.

          (b) Voluntary Prepayment: At any time after the twelfth (12th)
Installment Payment Date, with not less than 30 days' prior written notice to
Lender, Debtors may prepay all, but not less than all, of the Loan on an
Installment Payment Date. If any prepayment is made on or before the
twenty-fourth (24th) Installment Payment Date, Debtors shall pay a prepayment
fee equal to three percent (3%) of the principal amount of such prepayment. If
Debtors make prepayment after the twenty-fourth (24th) but on or before the
thirty-sixth (36th) Installment Payment Date, Debtors shall pay a prepayment fee
equal to two percent (2%) of the amount of principal being prepaid. If Debtors
prepay the Loan at any time after the thirty-sixth (36th) Installment Payment
Date, Debtors shall pay a prepayment fee equal to one percent (1%) of the amount
of principal then being prepaid.

          (c) Except as expressly provided in the foregoing subsections (a) and
(b), the Debtors shall not be permitted to make any prepayments on the Note.

                                       10

     2.5 USE OF PROCEEDS. The proceeds of the Loan shall be advanced to Debtors
and used by them to finance, maintain and operate the Vessels in the Pool under
the Pooling Agreement and for other lawful purposes of Debtors only.

     2.6 APPLICATION OF PAYMENTS.

          (a) Note Payments Received During the Note Term. So long as no (x)
Default with respect to any payments due hereunder or under any of the
Obligations or (y) Event of Default shall have occurred and be continuing, each
payment of an installment under the Note received by Lender during the Note Term
shall be applied, first, to any costs, expenses, fees or other amounts due under
this Agreement or under the other Loan Documents not constituting principal and
interest due under the Note, second, to late charges due under the Note, third,
to interest due under the Note, and fourth, to the payment of principal and all
other Obligations which are then due and payable.

          (b) Casualty Payments. So long as no (x) Default with respect to any
payments due hereunder or under any of the Obligations or (y) Event of Default
shall have occurred and be continuing, any amounts received by Lender as a
result of an Event of Loss with respect to any Vessel (including, without
limitation, any payment of prepayment amounts under Section 2.4(a) or insurance
or condemnation proceeds) shall be applied, first, to the prepayment amounts
required to be paid by Section 2.4 hereof; second, to the payment in full of all
of the Obligations set forth in the Note and the other Loan Documents then due
and owing; and, third, the balance, if any, after payment of the foregoing
amounts shall be released by Lender to the Debtors.

          (c) Other Amounts. So long as no (x) Default with respect to any
payments due hereunder or under any other Obligation or (y) Event of Default
shall have occurred and be continuing, all Proceeds (other than Proceeds
received in respect of damage to a Vessel, which shall be distributed in
accordance with Section 1.22 of the applicable Mortgage) from time to time
received by Lender shall be applied, first, to any costs, expenses, fees or
other amounts due under this Agreement and the other Loan Documents not
constituting principal and interest due under the Note, second, to late charges
due under the Note, third, to interest due under the Note, fourth, to principal
installments due under the Note in the inverse order of maturities, fifth, to
the payment in full of all other Obligations which are then due and payable, and
sixth, if provision as to the application of such amounts is made in this
Agreement or any other Loan Document, Lender shall, in its sole discretion,
either apply such payment to the purpose for which it was made or pay it to the
Debtors, which shall so apply it, and seventh, if due to the Debtors, Lender
shall pay such amounts to the Debtors.

          (d) Application After Declaration. After an Event of Default shall
have occurred and be continuing and after Lender has either, (i) as assignee
from the Debtors of any charter, declared such charter to be in default, or (ii)
declared the Note to be due and payable pursuant to Section 8 hereof, or done
both (i) and (ii), all payments received and amounts realized by Lender, as well
as all payments or amounts then held by Lender as part of the Collateral, shall
be applied as set forth in said Section 8 hereof and as otherwise provided in
the other Loan Documents and the documents evidencing the other Obligations, and
the balance, if any, shall be paid by Lender to the Debtors.

                                       11

          (e) Application After Default or Event of Default. Subject to the
first sentence of Section 2.6(a) hereof, all payments received and amounts
realized by Lender after a Default or an Event of Default shall have occurred
and be continuing, but prior to any declaration thereof by Lender or any
acceleration of the Note shall be held by Lender as part of the Collateral until
such time as no Defaults or Events of Default shall be continuing hereunder (at
which time such funds shall be paid to the Debtors) or until such funds are
applied pursuant to Section 8 hereof.

     2.7 NATURE OF THE OBLIGATIONS. Each Debtor is jointly and severally liable
for each and every Obligation. Each Debtor consents that, without the necessity
of any reservation of rights against it and without notice to or further assent
by it, the obligations and liabilities of each Debtor and any other party or
parties for or upon any of the obligations of any Affiliate of each Debtor, or
any collateral security or guaranty therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
modified, accelerated, compromised or released by Lender; all as Lender may deem
advisable from time to time without impairing, abridging, releasing or affecting
the obligations set forth in this Section 2.7.

     2.8 ADDRESS FOR PAYMENTS. Debtors shall make any and all payments due
hereunder, including, without limitation, principal, interest, fees, costs,
indemnities and any other amounts from time to time due under this Agreement to
the Lender at LaSalle Bank, 135 South LaSalle Street, Chicago, IL 60603, MLBFS
Equipment Finance, Account No. 5800393166, ABA No. 071-000-505, Ref TBS
International, or such other account address as Lender shall from time to time
designate.

SECTION 3. CONDITIONS OF BORROWING.

     3.1 CONDITIONS TO BE FULFILLED PRIOR TO THE FUNDING DATE. Lender shall not
be required to make the Loan hereunder unless on the Funding Date:

          (a) Inspection. Lender shall have inspected and found satisfactory the
Vessels.

          (b) Appraisal. Lender shall have received an independent third party
appraisal of each Vessel to determine the fair market value of each Vessel, as
completed by an independent appraiser mutually acceptable to Lender and the
Debtors, all at the sole cost and expense of the Debtors.

          (c) Certificate of Incumbency of Each Debtor. Lender shall have
received a current certificate of incumbency of each Debtor signed by its
Secretary or Assistant Secretary (or other authorized officer), which
certificate shall certify the names of the officers of it authorized to execute
and deliver any Loan Documents hereunder or under any other related document on
its behalf, together with specimen signatures of such officers, and Lender may
conclusively rely on such certificate until receipt of a further certificate of
the Secretary or Assistant Secretary (or other authorized officer) of such
Debtor canceling or amending its prior certificate and submitting the signatures
of the officers named in such further certificate.

          (d) Certificate of Incumbency of Each Charterer of an Assigned
Charter. Lender shall have received a current certificate of incumbency of each
charterer of an Assigned

                                       12

Charter (except the Head Charters) signed by its Secretary or Assistant
Secretary (or other authorized officer), which certificate shall certify the
names of the officers of it authorized to execute and deliver any Loan Documents
to which it is a party hereunder or under any other related document on its
behalf, together with specimen signatures of such officers, and Lender may
conclusively rely on such certificate until receipt of a further certificate of
the Secretary or Assistant Secretary (or other authorized officer) of such
charterer canceling or amending its prior certificate and submitting the
signatures of the officers named in such further certificate.

          (e) Certificate of Incumbency of the Manager. Lender shall have
received a current certificate of incumbency of the Manager signed by its
Secretary or Assistant Secretary (or other authorized officer), which
certificate shall certify the names of the officers of it authorized to execute
and deliver any Loan Documents to which it is a party hereunder or under any
other related document on its behalf, together with specimen signatures of such
officers, and Lender may conclusively rely on such certificate until receipt of
a further certificate of the Secretary or Assistant Secretary (or other
authorized officer) of the Manager canceling or amending its prior certificate
and submitting the signatures of the officers named in such further certificate.

          (f) Certificate of Incumbency of Pledgor. Lender shall have received a
current certificate of incumbency of Pledgor signed by its Secretary or
Assistant Secretary (or other authorized officer), which certificate shall
certify the names of the officers of it authorized to execute and deliver any
Loan Documents to which it is a party hereunder or under any other related
document on its behalf, together with specimen signatures of such officers, and
Lender may conclusively rely on such certificate until receipt of a further
certificate of the Secretary or Assistant Secretary (or other authorized
officer) of Pledgor canceling or amending its prior certificate and submitting
the signatures of the officers named in such further certificate.

          (g) Certificate of Incumbency of Each Guarantor. Lender shall have
received a current certificate of incumbency of each Guarantor signed by its
Secretary or Assistant Secretary (or other authorized officer), which
certificate shall certify the names of the officers of it authorized to execute
and deliver any Loan Documents to which it is a party hereunder or under any
other related document on its behalf, together with specimen signatures of such
officers, and Lender may conclusively rely on such certificate until receipt of
a further certificate of the Secretary or Assistant Secretary (or other
authorized officer) of each Guarantor canceling or amending its prior
certificate and submitting the signatures of the officers named in such further
certificate.

          (h) Resolutions of Each Debtor. Lender shall have received a current
certified copy of all corporate proceedings of each Debtor evidencing that all
action required to be taken in connection with the authorization, execution,
delivery and performance of this Agreement, the Note, its Mortgage, the
Assignments, the other Loan Documents to which it is a party and the
transactions contemplated hereby and thereby has been duly taken.

          (i) Resolutions of Charterers of Assigned Charters. Lender shall have
received a current certified copy of all corporate proceedings of each charterer
of an Assigned Charter (except for the Head Charters) evidencing that all action
required to be taken in

                                       13

connection with the authorization, execution, delivery and performance of the
Loan Documents to which it is a party and the transactions contemplated hereby
and thereby has been duly taken.

          (j) Resolutions of Pledgor. Lender shall have received a current
certified copy of all limited liability company proceedings of Pledgor
evidencing that all action required to be taken in connection with the
authorization, execution, delivery and performance of the Pledge Agreements, and
the transactions contemplated hereby and thereby has been duly taken.

          (k) Resolutions of the Guarantors. Lender shall have received from
each Guarantor a copy of all corporate or other entity proceedings of such
Guarantor evidencing that all action required to be taken in connection with the
authorization, execution, delivery and performance of each Guarantor shall have
been taken by the owners, members, partners or shareholders and directors
thereof.

          (l) Resolutions of the Manager. Lender shall have received a current
certified copy of all corporate proceedings of the Manager evidencing that all
action required to be taken in connection with the authorization, execution,
delivery and performance of the Loan Documents to which it is a party and the
transactions contemplated hereby and thereby has been duly taken.

          (m) Opinions of Counsel. Lender shall have received the written
opinions addressed to it of New York, Panama, Marshall Islands and Bermuda
counsel for each Debtor, the Pledgor, each Guarantor and each charterer of an
Assigned Charter (except for the Head Charters), satisfactory in form and
substance to Lender.

          (n) Documents. Each of the Note, the Mortgages, the Assignments and
the other Loan Documents shall be in form and substance satisfactory to Lender
and its counsel and shall have been duly executed and delivered to Lender by the
parties thereto and acknowledgments and consents to Assignments, including, but
not limited to, Charterers' Consents, in form and substance satisfactory to
Lender, from any charterer of or any party to a contract of affreightment
relating to any Vessel shall have been duly authorized, executed and delivered
to Lender.

          (o) Insurance. Lender shall have received evidence satisfactory to it
that each Vessel is insured in accordance with the provisions of this Agreement,
the applicable Mortgage and the Assignments of Insurances.

          (p) Mortgages and Security Interests. All filings, including all
applicable UCC-1 filings pursuant to the Code, recordings and other actions
deemed necessary or desirable by Lender in order to establish, protect, preserve
and perfect the Mortgage as a first naval mortgage on the whole of each Vessel
in favor of Lender and Lender's lien on and security interest in all other
Collateral as a valid perfected first priority security interest shall have been
duly effected, including, without limitation, the filing of financing statements
and the filing and recordation of the Mortgages and all other actions required
to perfect Lender's security interest in the Collateral, all in form and
substance satisfactory to Lender, and all fees, taxes and other charges relating
to such filings and recordings shall have been paid by the Debtors. Lender shall
have received UCC-3 releases or other documents satisfactory to Lender from such
Persons as

                                       14

Lender shall deem necessary or desirable to evidence the release of any liens
such Person may have on the Collateral.

          (q) Discharge of Any Existing Liens. Lender shall be satisfied that,
concurrently with the funding of the Loan, the Vessels are free and clear of all
Liens other than Permitted Liens, as the term is defined herein and in the
relevant Mortgage.

          (r) Representations. Lender shall have received a certificate of the
Debtors confirming that (i) the representations and warranties contained in this
Agreement, the Mortgages and in all of the other Loan Documents and other
documents and instruments executed and delivered to Lender in connection
herewith shall be true and correct in all material respects on and as of the
date of the making of the Loan with the same effect as if made on and as of such
date; (ii) no Default or Event of Default shall be in existence on the date of
the making of the Loan or shall occur as a result of the Loan; (iii) no Event of
Default shall have occurred and be continuing under any charter of any Vessel on
the Date of Funding; and (iv) the acceptance by the Debtors of the Loan shall
constitute a representation by the Debtors that the statements contained in
clauses (i), (ii) and (iii) above are true and correct on the date of the Loan.

          (s) No Material Adverse Change. In the sole determination of Lender,
there shall have been no material adverse change since, in the financial
condition, business or operations (as the case may be) of any Debtor, Pledgor,
Guarantor or the Manager.

          (t) Certificates of Ownership. Lender shall have received and found to
be satisfactory, or will receive upon the funding of the Loan to the Debtors, an
abstract of title or documents of similar effect as to each Vessel confirming
that such Vessel is owned by such Debtor and registered in the Republic of
Panama upon the funding of the Loan, free of all recorded Liens other than the
applicable Mortgage and that such Vessel is authorized by both the Republic of
Panama and the Philippines to fly the Philippine flag and show its official
number and port of registry under Philippines law, accordingly.

          (u) No Event of Loss. No Event of Loss shall have occurred with
respect to any Vessel.

          (v) Consent and Subordination; Execution of Charter Assignments.
Lender shall have received and found to be satisfactory each Charterer's
Consent, subordinating any rights of any charterer under an Assigned Charter
(except the Head Charters) in the Collateral to the rights of Lender under the
Earnings Assignments. Additionally, the Debtors shall have entered into the
Earnings Assignments, in form and substance satisfactory to Lender, providing,
among other things, for the assignment to Lender of all of the Debtors' rights
and earnings under the Assigned Charters and the acknowledgment of and consent
to such assignment by any charterer under such Assigned Charter.

          (w) Other Documents and Information. Lender shall have received from
each Debtor, in form and substance satisfactory to Lender, such other documents
and information as Lender may reasonably request.

                                       15

          (x) Legal Matters. All legal matters with respect to and all legal
documents (including, but not limited to, the Loan Documents) executed in
connection with the transactions contemplated by this Agreement shall be
satisfactory to counsel for Lender.

          (y) Pay Proceeds Letter. The Debtors jointly shall submit a letter
acceptable to Lender authorizing and instructing Lender to: (i) make the Loan in
proper amount, (ii) to retain and apply U.S.$75,000.00 towards the balance of
the Proposal Fee payable, as provided in Section 9.4, on the Funding Date, and
(iii) pay to Lender's counsel the amount of Lender's legal fees and
disbursements.

          (z) Lender's Right to Waive or Defer. Lender may, but shall have no
obligation to either waive or defer satisfaction of any one or more of the
foregoing Borrowing Conditions until a date after Funding. In the event Lender
defers compliance by Debtors of any of the foregoing, Debtors shall fully
satisfy the deferred condition within 10 days of the Funding Date, failing
which, an Event of Default shall have occurred. No waiver shall be effective
except in writing signed by Lender.

SECTION 4. REPRESENTATIONS AND WARRANTIES.

     In order to induce Lender to enter into this Agreement and to make the
Loan, each Debtor represents and warrants to Lender that:

     4.1 ORGANIZATION. Each Debtor is a corporation duly organized, validly
existing and in good standing under the laws of the Republic of the Marshall
Islands, has the necessary right, power and authority to own its Vessel and its
other assets and to transact the business in which it is engaged, and each
Debtor is duly qualified to do business in each jurisdiction where such
qualification is legally required and where the failure to so qualify would
materially adversely affect the enforceability of the Loan Documents or
otherwise materially adversely affect the Collateral or any Debtor's ability to
perform its obligations under any of the Loan Documents. Pledgor is the record
and beneficial owner of one hundred percent (100%) of the authorized, issued and
outstanding stock of Stratford Shipping and Sheffield Maritime.

     4.2 POWER AND AUTHORITY. Each Debtor, Pledgor, Guarantor and any charterer
of an Assigned Charter has full corporate power, authority and legal right to
execute and deliver the Loan Documents to which it is a party, and to perform
its obligations hereunder and thereunder respectively, and the Debtors have full
corporate power, authority and legal right to borrow hereunder and to grant the
security interests created by this Agreement, its Mortgage and each of the
Assignments.

     4.3 CONSENTS AND PERMITS. No consent of any other Person (including any
stockholder, trustee or holder of indebtedness), and no consent, license,
approval or authorization of, exemption by, or registration or declaration with,
any governmental body, authority, bureau or agency (or other Person) is required
in connection with the execution, delivery or performance by each Debtor of this
Agreement, the Note, its Mortgage, the Assignments or any other Loan Document to
which it is party other than the filing of its Mortgage and the UCC-1 financing
statements.

                                       16

     4.4 NO LEGAL BAR. The execution, delivery and performance by each Debtor of
this Agreement, the Note, its Mortgage, each of the Assignments and any other
Loan Documents to which it is a party, and by Pledgor of the Pledge Agreements
and by the Guarantors of their respective Guaranties, do not and will not
violate any provision of any applicable law or regulation or of any judgment,
award, order, writ or decree of any court or governmental instrumentality, will
not violate any provision of the organizational documents of any Debtor, Pledgor
or Guarantor, and will not violate any provision of, or cause a default under,
any mortgage, indenture, contract, agreement or other undertaking to which any
Debtor, Pledgor or Guarantor is a party or which purports to be binding upon any
Debtor, Pledgor or Guarantor or upon any of their respective assets, and will
not result in the creation or imposition of any Lien on any of the respective
assets of any Debtor, Pledgor or Guarantor other than the security interests and
mortgage intended to be created hereby and under the Assignments, the Mortgage
and the Pledge Agreements.

     4.5 NO DEFAULTS. None of the Debtor, Pledgor or Guarantors is in default,
and no event or condition exists which after the giving of notice or lapse of
time or both would constitute an Event of Default under this Agreement, the
Note, the Mortgages, the Pledge Agreements, the Guaranties, the Assignments or
any other Loan Document or under any mortgage, indenture, contract, agreement,
judgment or other undertaking to which each is a party or upon any of their
respective assets, except for any such default, event or condition which,
individually or in the aggregate, would not materially adversely affect any of
the Debtors', Pledgor's or Guarantors' ability to perform their respective
obligations under any of this Agreement, the Note, the Mortgages, the
Assignments, the Pledge Agreements, the Guaranties or any other Loan Document,
or any such mortgage, indenture, contract, agreement, judgment or other
undertaking.

     4.6 ENFORCEABILITY. Each of this Agreement, the Mortgages, the Note and the
other Loan Documents has been duly authorized, executed and delivered by the
parties thereto (other than Lender) and constitutes a legal, valid and binding
obligation of the Debtors, Pledgor or the Guarantors, as the case may be,
enforceable in accordance with its respective terms except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law) and an implied covenant of good faith and fair dealing.

     4.7 NO LITIGATION. Except as described on Schedule 3 hereto, there is no
action, suit, proceeding or, to our knowledge, investigation (whether or not
purportedly on behalf of any Debtor, Pledgor or Guarantor) pending or to our
knowledge threatened against any Debtor, Pledgor or Guarantor or any of their
respective assets in any jurisdiction. There is no action, suit or proceeding
or, to our knowledge, investigation (a) which involves any Vessel, the
Assignments, or any of the transactions contemplated by this Agreement or the
other Loan Documents; or (b) which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, pending or threatened in any
jurisdiction.

     4.8 TITLE TO VESSEL. Each Debtor has and will have, while any Obligation
remains outstanding, valid and marketable title to its Vessel, subject to no
Liens except Permitted Liens, and each Vessel shall be registered in the name of
its respective Debtor with the Republic of

                                       17

Panama and to the extent permitted by the Republic of Panama and the
Philippines, under the flag of the Philippines with respect to the period of
such Vessel's Head Charter.

     4.9 LENDER'S SECURITY INTEREST. On the Funding Date, Lender shall have a
legal, valid and continuing first preferred ship mortgage (as amended,
supplemented or otherwise modified from time to time) and a perfected first lien
on and security interest in each Vessel, and Lender shall have a perfected first
lien on and security interest in the Collateral subject only to Permitted Liens
and all taxes, fees and other charges in connection therewith shall have been
duly paid. There are no charters in effect on any Vessel other than the Assigned
Charters specifically identified on Schedule 5 hereto.

     4.10 INCOME TAXES. Each Debtor has filed all federal, state and local
income tax returns that are required to be filed, and has paid all taxes as
shown on said returns or which are required to be paid and all assessments
received by it to the extent that such taxes and assessments have become due,
and each Debtor does not have any knowledge of any actual or proposed deficiency
or additional assessment in connection therewith. The charges, accruals and
reserves on the books of each Debtor in respect of federal, state and local
taxes for all open years, and for the current fiscal year, make adequate
provision for all unpaid tax liabilities for such periods.

     4.11 NO OTHER NAME. During the past five (5) years, none of the Debtors or
Pledgor has changed its name and none has done business in any name other than
as set forth in the introductory paragraph of this Agreement.

     4.12 PAYMENT OF TAXES. All sales, use, property or other taxes, licenses,
tolls, inspection or other fees, bonds, permits or certificates which were or
may be required to be paid or obtained in connection with the acquisition by
each Debtor of its Vessel or such Vessel's subsequent employment will have been,
or when due will be, paid in full or obtained.

     4.13 ENVIRONMENTAL COMPLIANCE. Each Debtor and any charterer under an
Assigned Charter has duly complied in all material respects with, and its
business, operations, assets, equipment, property, leaseholds, or other
facilities are in compliance in all material respects with, the provisions of
all federal, state and local environmental, health and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder. Except as
disclosed in Schedule 4 hereto, neither Pledgor, any Debtor, any charterer under
an Assigned Charter, nor any Affiliate thereof is in, or has been notified of,
any violation of any Environmental Law with respect to the ownership, chartering
or operation of any Vessel, which violation could have a Material Adverse Effect
under OPA 90 or could otherwise reasonably be expected to have a Material
Adverse Effect on the ability of any Debtor's or of any charterer of an Assigned
Charter to perform the transaction contemplated in this Agreement or under an
Assigned Charter.

SECTION 5. COVENANTS.

     Each Debtor covenants and agrees that, from and after the date hereof and
so long as the Commitment or the Obligations are outstanding:

     5.1 NOTICES. Such Debtor will promptly after obtaining knowledge thereof
give written notice to lender of (i) the occurrence of any Default or Event of
Default; (ii) the

                                       18

occurrence of an Event of Loss relating to any Vessel; (iii) the commencement or
threat of any material litigation or proceedings or threatened or asserted claim
of lien affecting any Debtor, Pledgor, Guarantor, the Manager or the Vessel; and
(iv) any dispute between any Debtor, Pledgor, the Manager and any governmental
regulatory body or other party that involves and Material Adverse Effect
respecting any Vessel or that could reasonably be expected to materially
interfere with the normal business operations of any Debtor.

     5.2 LAWS, OBLIGATIONS; OPERATIONS. Each Debtor will (i) duly observe and
conform to all requirements of any governmental authorities relating to the
conduct of its business or to its property r assets; (ii) maintain its existence
as a legal entity and obtain and keep in full force and effect all rights,
franchises, licenses and permits which are necessary to the proper conduct of
its business; (iii) obtain or cause to be obtained as promptly as possible any
governmental, administrative or agency approval and make any filing or
registration therewith which at the time shall be required with respect to the
performance of the Obligations or the operation of its business; and (iv) pay
all fees, taxes, assessments and governmental charges, withholdings or levies
imposed upon any of the Collateral, and at all times, such Debtor shall pay or
cause to be paid all fees, taxes, assessments and governmental charges or levies
imposed upon any of the Collateral except for such contested in good faith by
appropriate proceedings not involving any risk of loss of the Vessels or such
other Collateral or Lender's interest or priority therein.

     5.3 INSPECTION. Lender or its authorized representative may, at any
reasonable time or times and annually at the Debtors' expense, inspect any
Vessel and at Lender's cost (provided, if an Event of Default has occurred and
is continuing, every inspection thereafter shall be at the Debtors' expense), it
shall have the right to review the operating and insurance records of the
Debtors upon reasonable notice and during normal business hours. Inspection will
be conducted in such a manner as to minimize interference in the Vessels'
operation, provided that no Event of Default shall be then continuing. The
Debtors shall provide, and shall require any charterer under an Assigned Charter
to provide, Lender advance notice of all known surveys and regulatory inspection
in order that Lender may observe and participate.

     5.4 BOOKS. The Debtors will keep proper books of record and account in
which full, true and correct entries in accordance with GAAP will be made of all
dealings or transactions in relation to their businesses and activities.

     5.5 FINANCIAL INFORMATION. The Debtors will furnish or cause to be
furnished to Lender (a) as soon as available, but in any event not later than
ninety (90) days after the end of each fiscal year of the Debtors and
Guarantors, Financial Statements of TBS International Limited and its
consolidated subsidiaries as at the end of such fiscal year, all in reasonable
detail, prepared in accordance with GAAP applied on a basis consistently
maintained throughout the period involved and audited by independent certified
public accountants reasonably acceptable to Lender; (b) as soon as available,
but in no event later than forty-five (45) days after the end of each fiscal
quarter of the Debtors and Guarantors unaudited financial statements of such
entity as at the end of such fiscal quarter, all in reasonable detail, prepared
in accordance with GAAP applied on a basis consistently maintained throughout
the period involved and certified by the chief financial officer of such entity;
(c) within ninety (90) days of the end of each fiscal year of Debtors and
Guarantors, consolidating internally prepared annual financial statements for
each Debtor and each Guarantor; (d) with each submission of Financial Statements
as herein provided,

                                       19

each of the Debtors and Pledgor shall submit a written executed Certificate of
Compliance, a form of which is attached hereto as Exhibit C, confirming to
Lender the accuracy of the respective Financial Statements submitted on that
date (subject to normal year-end audit adjustment), identifying the current
charter or other contract under which the Vessels are employed and the basic
deal economics of such contract including rates, term of the contract and
renewals, confirming to Lender that there exists no Default or Event of Default
under this Agreement or any other of the Loan Documents or, if such Default or
Event of Default exists, the steps being taken to remedy such Default or Event
of Default; and (e) promptly, such additional financial and other information as
Lender may from time to time reasonably request.

     5.6 WORKING CAPITAL. At all times during the Note Term, each Debtor shall
maintain a positive Working Capital.

     5.7 INCURRENCE OF INDEBTEDNESS. No Debtor shall contract, create, incur,
assume or suffer to exist any Indebtedness except (i) Indebtedness represented
by the Loan, or any other Loan Documents or other Obligations, (ii) trade debt
incurred in the ordinary course of such Debtor's business in a manner and to an
extent consistent with past practices and necessary for the prudent operation of
its business or operation, including, without limitation, contingent liabilities
under Protection and Indemnity entries for club calls and back calls.

     5.8 ADVANCES OR LOANS; NO TRANSACTION OF OTHER BUSINESS OR ACTIVITIES. No
loans or advances to any Person shall be made by any Debtor.

     5.9 FURTHER ASSURANCES. Each Debtor will, promptly at any time and from
time to time, at its sole expense, execute and deliver, and cause any charterer
under an Assigned Charter, Pledgor, Guarantors and the Manager to execute and
deliver, to Lender such further instruments and documents, and take such further
action, as Lender may from time to time reasonably request in order to further
carry out the intent and purpose of the Loan Documents and to establish and
protect the rights, interests and remedies created, or intended to be created,
in favor of Lender hereby and thereby, including, without limitation, the
execution, delivery, recordation and filing of financing statements and
continuation statements. The Debtors hereby authorize Lender, in such
jurisdictions where such action is authorized by law, to effect any such
recordation or filing of financing statements and continuation statements
without the signature of any Debtor thereon and to file as valid financing
statements in the applicable financing statement records, photocopies hereof and
of any other financing statement executed in connection herewith. Lender agrees
to provide the Debtors with copies of UCC filings, but shall have no liability
for failure to do so and such failure shall not serve as a defense to the
performance by any party of its obligations under the Loan Documents. The
Debtors will pay, or reimburse Lender for, any and all reasonable fees,
reasonable costs and expenses of whatever kind or nature incurred in connection
with the creation, preservation and protection of Lender's security interest in
the Vessels, the Assignments and the other Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payments or discharge of any taxes
or Liens upon or in respect of the Collateral not discharged as herein required
and all other fees, reasonable costs and expenses in connection with protecting,
maintaining or preserving the Collateral and Lender's interests therein, whether
through judicial proceedings or otherwise, or in connection with defending or
prosecuting any actions, suits or proceedings arising out of or related to any
Vessel, the Pledge Agreements and

                                       20

the other Collateral and premiums for insurance with respect to any Vessel; and
all such amounts that are paid by Lender shall, until reimbursed by or on behalf
of the Debtors, constitute Obligations of the Debtors secured by the Collateral.

     5.10 NO DISPOSITION OF COLLATERAL. No Debtor will sell, convey, transfer,
exchange, lease or otherwise relinquish possession or dispose of any of the
Collateral (other than obsolete or worn out equipment disposed of and replaced
with equipment of the same or better quality and value, in the ordinary course
of business), or attempt or offer to do any of the foregoing, without Lender's
prior written consent.

     5.11 NO LIENS. The Debtors will not and will not permit any charterer under
an Assigned Charter, Pledgor or the Manager to create, assume or suffer to exist
any Lien of any kind upon the Collateral except for liens in favor of Lender and
Permitted Liens.

     5.12 ENVIRONMENTAL COMPLIANCE. (a) The Debtors shall, and shall require
that any charterer under an Assigned Charter, and any and all subcharterers,
managers, employees, contractors, subcontractors, agents, representatives,
Affiliates, consultants, occupants and any and all other Persons (other than
Lender), (i) comply in all material respects with all applicable Environmental
Laws, (ii) use, employ, process, emit, generate, store, handle, transport,
dispose of and/or arrange for the disposal of any and all Hazardous Materials
in, on, or, directly or indirectly, related to or in connection with the Vessel
or any portion thereof in a manner consistent with prudent industry practice and
in compliance in all material respects with all applicable Environmental Laws,
and in a manner which does not pose a significant risk to human health, safety
(including occupational health and safety) or the environment, and (iii) obtain,
maintain, and have on board each Vessel any required Certificate of Financial
Responsibility ("COFR").

     (b) The Debtors shall, and shall require that any charterer under an
Assigned Charter or any other Persons in custody of a Vessel shall, upon the
occurrence or discovery of an Environmental Event with respect to such Vessel,
promptly carry out, using the Debtors' or such other Person's own funds or
proceeds of insurance with respect thereto, such actions as may be necessary to
remediate or cure such Environmental Event in compliance in all material
respects with all applicable Laws, to comply in all material respects with all
applicable Environmental Laws and to alleviate any significant risk to human
health or the environment if the same arises from a condition on or in respect
of such Vessel, whether existing prior to or during the Note Term or the term of
any charter. Once a Debtor or such other Person commences such actions, such
Debtor shall, and shall cause such other Person to, thereafter diligently and
expeditiously proceed to comply in all material respects in a timely manner with
all Environmental Laws and to eliminate any significant risk to human health or
the environment arising from such Environmental Event and shall, at the request
of Lender, give periodic progress reports to Lender on its compliance efforts
and actions.

     5.13 THE DEBTORS' TITLE; LENDER'S SECURITY INTEREST; PERSONAL PROPERTY.
Each Debtor shall warrant and defend its good and marketable title to its Vessel
and Lender's perfected first priority security interest in all Collateral,
against all claims and demands whatsoever. The Debtors agree that the Vessels
shall be, and at all times remain, separately identifiable personal property.

                                       21

     5.14 NO CHANGES IN ANY DEBTOR. No Debtor shall (a) liquidate, dissolve,
consolidate or merge itself into or with any other entity; (b) materially change
its business; (c) change the form of organization of its business; or (d)
without thirty (30) days' prior written notice to Lender, change its name or
jurisdiction of organization.

     5.15 USE OF VESSELS; MAINTENANCE; OPERATION. The Debtors shall require at
all times that any charterer shall use its due diligence to operate, maintain,
repair, insure, man and supply the Vessels in a careful and proper manner,
comply in all material respects with and conform to all governmental laws, rules
and regulations and insurance restrictions relating thereto, and operate the
Vessels with competent and duly qualified personnel. The Debtors shall ensure
that, except as specifically permitted from time to time by an appropriate
license issued by the United States government and a copy of which shall have
been theretofore furnished to Lender, the Vessels shall not be traded, located,
operated or used, directly or indirectly, in a Prohibited Jurisdiction or by a
Prohibited Person, and no charterer nor Pledgor nor any subcharterer or shipper
shall be a Prohibited Person or organized in a Prohibited Jurisdiction.

     5.16 INDEMNIFICATION. Without limiting the generality of any other
provision hereof, the Debtors shall jointly and severally indemnify, protect,
save and keep harmless Lender, its agents, servants, employees, officers,
directors and shareholders from and against any reduction in the amount payable
out of the Collateral to Lender with respect to the Obligations, or any other
loss, cost or expense (including reasonable legal fees) incurred by Lender, as
the result of any breach of the provisions of Section 5 hereof, except to the
extent any such amount or loss is incurred solely as a result of the gross
negligence or willful misconduct of Lender or solely by the breach by Lender of
its obligations, representations or warranties under any of the Loan Documents.

     5.17 PERFORMANCE OF CONTRACTS. The Debtors will duly observe and perform in
all material respects all covenants and obligations to be performed by it under
any charter of any Vessel, including, without limitation, the Head Charters, and
will promptly take any and all action as may be reasonably necessary to enforce
its rights under any such charter or to secure the performance by such charterer
of the charterer's obligations under any such charter. No Debtor or charterer of
any Assigned Charter, Guarantor or any Affiliate of the foregoing shall enter
into any charter or other contract for the use, employment or operation of a
Vessel for a term in excess of six (6) months (except for any renewal of any
Head Charter), without the prior written consent of Lender, which shall not be
unreasonably withheld or delayed, but to which reasonable conditions may be
attached; provided, however, Lender shall have no obligation to consent to any
charters or other contracts if, in Lender's judgment such charter or other
contract would materially increase Lender's risks in this transaction, reduce
its returns or otherwise disadvantage Lender.

     5.18 GOVERNMENTAL APPROVALS. The Debtors will obtain from time to time all
permits, licenses, approvals and authorizations of, and will file all
registrations and declarations with, all governmental authorities, bureaus and
agencies required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement (including, without limitation, the
payment to Lender at its office address referred to in this Agreement, in lawful
money of the United States of America, of the obligations of the Debtors under
this

                                       22

Agreement) and will take all action necessary to maintain each such permit,
license, approval or authorization, or registration or declaration, in full
force and effect.

     5.19 SPECIAL PURPOSE COVENANTS. (a) Positive Covenants. Throughout the Note
Term, each Debtor shall:

          (i) hold itself out to the public as a legal entity that is separate
     and distinct from any other Person, including the other Debtor, Guarantors,
     Pledgor, charterer of Assigned Charters, the Manager, and their respective
     Affiliates, and shall conduct its business solely in its own name and
     separate and apart from those of any Affiliate of such Debtor in order not
     to (1) mislead others to believe that they are transacting business with or
     relying on the credit of any entity other than such Debtor, or (2) except
     as provided herein or in the other Loan Documents, suggest that such Debtor
     is responsible for the debts of any third party (including Pledgor, any
     charterer of Assigned Charters, Guarantors, the Manager or any Affiliate of
     such Debtor, Pledgor or the Manager) or that any such third party is liable
     for the debts of Pledgor;

          (ii) timely file all tax returns required by Applicable Law;

          (iii) allocate fairly and reasonably any overhead expenses that are
     shared with any Affiliate of any Debtor, any charterer under any Assigned
     Charter, Pledgor, Guarantor or the Manager;

          (iv) maintain records and books of account and prepare financial
     statements showing its own assets and liabilities as being separate from
     those of such Debtor or any other Affiliate of Pledgor, any charterer under
     any Assigned Charter, Guarantor or the Manager, in each case sufficient to
     ensure that it will not be costly or difficult to ascertain the separate
     identity of such Debtor's assets from those of any Affiliate or the
     separate financial condition of such Debtor from the financial condition of
     any Affiliate;

          (v) pay its liabilities out of its own funds, including salaries of
     any employees of such Debtor, and not out of the funds of Pledgor,
     charterer under any Assigned Charter, Guarantor, the Manager or any other
     Affiliate of such Debtor or Pledgor;

          (vi) use separate stationery and invoices;

          (vii) take commercially reasonable steps to correct any known
     misunderstanding regarding the separate identity and financial condition of
     such Debtor; and

          (viii) maintain adequate capital for the normal obligations reasonably
     foreseeable in a business of its size and character and in light of its
     contemplated business.

     5.20 NEGATIVE COVENANTS. Throughout the Note Term, no Debtor shall:

          (i) engage in any activity other than the ownership and operation of
     its Vessel and those other activities expressly required or permitted in
     the Loan Documents;

                                       23

          (ii) other than as expressly provided in the Loan Documents, enter
     into any transaction with Pledgor, any charterer under an Assigned Charter,
     the Manager or any other Affiliate of Pledgor, any charterer under an
     Assigned Charter, the Manager or such Debtor except on arms-length terms;

          (iii) make any loans or advances to any third party, including any
     Affiliate of such Debtor (except only as provided in the Pooling
     Agreement), or buy or hold evidence of indebtedness issued by any
     Affiliate; or

          (iv) identify itself as a department or division of Pledgor,
     Guarantor, charterer under any Assigned Charter, the Manager or any other
     Person.

SECTION 6. SECURITY INTEREST CONTINUING OBLIGATIONS OF DEBTORS.

     6.1 GRANT OF SECURITY. In addition to, and not in lieu of, the grant of
liens, rights and interests made by Debtors pursuant to the Assignments, the
Pledge and the Mortgage, and in order to further secure the prompt and complete
(x) payment (whether at the stated maturity, by acceleration or otherwise) of
all principal of, interest on, late fees and Breakage Costs with respect to the
Loan and all other amounts payable by Debtors under the Loan Documents now in
existence or hereafter incurred, and (y) the performance and observance by each
Debtor of all of the agreements and covenants to be performed or observed by it
for the benefit of Lender contained in the Assignments, the Pledge, the Mortgage
and the other Loan Documents and in consideration of the Note, the premises and
of the covenants contained herein and in the other Loan Documents and of other
good and valuable consideration given to Debtors by Lender at or before the
Funding Date, the receipt of which is hereby acknowledged, Debtors do hereby
grant, bargain, sell, convey, transfer, mortgage, assign, pledge, and confirm
unto Lender and its permitted successors and assigns, for the security and
benefit of Lender, a security interest in, and mortgage lien on, all estate,
right, title and interest of any Debtor in, to and under, all and singular, the
following described properties, rights, interests and privileges whether now or
hereafter acquired (hereinafter referred to as the "COLLATERAL"):

     (a)  the Vessels;

     (b) continuing rights of any Debtor in respect of any warranty, indemnity
or agreement, express or implied, as to title, materials, workmanship, design or
patent infringement or related matters with respect to the Vessels, and (ii) all
rights, powers, privileges, options and other benefits of Debtors thereunder
(subject to such reservation) with respect to the Vessels, including, without
limitation, the right to make all waivers and agreements, to give and receive
all notices and other instruments or communications, to take such action upon
the occurrence of a default thereunder, including the commencement, conduct and
consummation of legal, administrative or other proceedings, as shall be
permitted thereby or by law, and to do any and all other things which Debtors
are or may be entitled to do thereunder (subject to such reservation);

     (c) all property that may, from time to time, hereafter in accordance with
the provision of this Agreement, be expressly subjected to the Lien of this
Agreement;

                                       24

     (d) all records reflecting or relating to the foregoing; and

     (e) all Proceeds of the foregoing;

     provided, however, that, notwithstanding any of the foregoing provisions of
this Section 6.l, so long as no Event of Default shall have occurred and be
continuing, each Debtor shall have the right, to the exclusion of Lender, to
quiet enjoyment of its Vessel and the other Collateral and to possess, use,
retain and control its Vessel and the other Collateral.

     TO HAVE AND TO HOLD all and singular the Collateral unto Lender, its
permitted successors and assigns, forever, in trust, upon the terms and trusts
herein set forth, for the benefit, security and protection of Lender from time
to time, and for the uses and purposes and subject to the terms and provisions
set forth in this Agreement.

     It is expressly agreed that notwithstanding anything herein to the
contrary, each Debtor shall remain liable under the agreements and instruments
included in the Collateral to perform all of its obligations thereunder, and,
except to the extent expressly provided herein or in any other Assigned
Agreement, Lender shall not be required or obligated in any manner to perform or
fulfill any obligations of any Debtor under or pursuant to any thereof, or to
make any inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim or take any action to collect or enforce the
payment of any amount which may have been assigned to it or to which it may be
entitled at any time or times.

     6.2 DEBTORS NOT RELIEVED OF OBLIGATIONS.

     (a) It is expressly agreed that, anything contained herein to the contrary
notwithstanding, (i) each Debtor shall at all times perform all of its duties
and obligations under any contracts or charters of its Vessel, including, but
not limited to, its Head Charter or similar contracts relating to the use or
operation of its Vessel to the same extent as if this Agreement and the
Assignments had not been made, (ii) the exercise by Lender of any of the rights
assigned hereunder shall not release any Debtor from any of its duties or
obligations under any Head Charter or similar contracts relating to the use or
operation of its Vessel, and (iii) Lender shall not have any obligation or
liability under any Head Charter or similar contracts relating to the use or
operation of its Vessel by reason of this Agreement, the Assignments or the
receipt by Lender of any payment or property under any such charter or similar
contracts relating to the use or operation of its Vessel or pursuant hereto, nor
shall Lender be obligated to perform or fulfill any of the duties or obligations
of the "owner" under any Head Charter or similar contracts relating to the use
or operation of its Vessel or to make any payment thereunder, or to make any
inquiry as to the nature or sufficiency of any payment or property received by
it thereunder, or the sufficiency of performance by any Person thereunder, or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts or the delivery of any property which
may have been assigned to it or to which it may be entitled at any time or
times.

     6.3 LENDER APPOINTED AS ATTORNEY-IN-FACT.

     In addition to and not in limitation of the power and authority granted to
Lender under Section 2.2(c) of this Agreement, each Debtor hereby irrevocably
constitutes and appoints

                                       25

Lender, with full power of substitution, as its true and lawful attorney-in-fact
with full and irrevocable power and authority in the place and stead of such
Debtor and in the name of such Debtor or in its own name, from time to time
following the occurrence and during the continuance of an Event of Default in
Lender's sole discretion to the maximum extent permitted by applicable law, for
the purpose of carrying out the terms of this Agreement or any other Loan
Document, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to protect and
preserve, and/or exercise its rights and remedies hereunder and with respect to
the Collateral and, without limiting the generality of the foregoing, hereby
gives Lender the power and right, on behalf of such Debtor and without notice to
or assent by such Debtor, to do the following, upon the occurrence and during
the continuance of an Event of Default: to demand, enforce, collect, receive,
receipt, and give release for any monies due or to become due under or arising
out of or with respect to, any of the Collateral, and to endorse all checks and
other instruments, and to do and take all such other actions relating to any of
the Collateral, to file any claims or institute any proceedings with respect to
any of the foregoing which Lender deems necessary or desirable in its sole
discretion, and to compromise any such demand, claim or action. Each Debtor
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an interest and
shall be irrevocable.

     The powers conferred on Lender hereunder are solely to protect Lender's
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Lender shall be accountable only for 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 responsible to any Debtor
for any act or failure to act (except for any act of willful misconduct or gross
negligence).

SECTION 7. EVENTS OF DEFAULT.

     Each of the following events shall constitute an event of default (herein
called "EVENT OF DEFAULT") under this Agreement:

     (a) The Debtors shall fail to pay any amount of principal or interest when
due or to pay any other Obligation within five (5) Business Days after the same
becomes due (whether on demand, at the stated maturity, by acceleration or
otherwise); or

     (b) Any representation or warranty made by any Debtor, Guarantor, charterer
under an Assigned Charter, Pledgor or the Manager (as the case may be) in this
Agreement, any Mortgage or any other Loan Document, or in any document,
certificate or financial or other statement now or hereafter furnished by any
Debtor, Guarantor, charterer under any Assigned Charter, Pledgor or the Manager
in connection with this Agreement, the Mortgage or any other Loan Document shall
at any time prove to be untrue or misleading in any material respect as of the
time when made or when deemed to be made; provided, however, that, if any fact
or state of affairs was misrepresented through demonstrable inadvertence and is
corrected by the maker of such representation to comply with the requirements of
this Agreement within ten (10) days of becoming aware thereof, such Event of
Default shall be deemed cured; or

                                       26

     (c) Any Debtor shall fail to observe any covenant, condition or agreement
contained in Sections 5.6, 5.7, 5.8, 5.10, 5.13, 5.14, 5.19 or 5.20 hereof, and
such failure shall be continuing; or

     (d) Any Debtor, charterer under an Assigned Charter, Pledgor, Guarantor or
the Manager shall fail to observe or perform any other covenant, condition or
agreement contained in this Agreement or any other Loan Document, and such
failure shall continue unremedied for a period of thirty (30) days after the
earlier of (i) the date on which a Debtor obtains knowledge of such failure, or
(ii) the date on which notice thereof shall be given by Lender to the Debtors;
or

     (e) Any Debtor, Pledgor, Guarantor or charterer under an Assigned Charter
shall (i) default in the payment of any Indebtedness to Lender or to any of
Lender's Affiliates beyond the period of grace, if any, provided with respect
thereto, or (ii) default in the performance or observance of any other term,
condition or agreement contained in any such obligation or in any agreement
relating thereto, if the effect of such default is to cause, or permit, the
holder or holders of such obligation (or a trustee on behalf of such holder or
holders) to cause such obligation to become due prior to its stated maturity or
to realize upon any collateral given as security therefor, or (iii) default in
the payment of any Indebtedness singly or in the aggregate in a principal amount
greater than U.S.$250,000.00 to any Person other than Lender or any of Lender's
Affiliates beyond the period of grace, if any, or (iv) default in the
performance or observance of any other term, condition or agreement contained in
any such obligation or in any agreement relating thereto, if the effect of such
default is to cause, or permit, the holder or holders of such obligation (or a
trustee on behalf of such holder or holders) to cause such obligation to become
due prior to its stated maturity or to realize upon any collateral given as
security therefor; or

     (f) The institution by any Debtor, charterer under an Assigned Charter,
Pledgor or Guarantor of proceedings to be adjudicated a bankrupt or insolvent,
or the consent by any of them to the institution of bankruptcy or insolvency
proceedings against it, or the commencement by any Debtor, Pledgor, charterer
under an Assigned Charter or Guarantor of a voluntary proceeding or case under
the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state or foreign bankruptcy, insolvency or other similar
law, or the consent by any of them to the filing of any such petition or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of any Debtor,
Pledgor, charterer under an Assigned Charter or Guarantor or of any substantial
part of their respective properties, or the making by any of them of any
assignment for the benefit of creditors or the admission by any of them of an
inability to pay its debts generally as they become due or its willingness to be
adjudicated a bankrupt or the failure of any Debtor, Pledgor, charterer under an
Assigned Charter or Guarantor generally to pay its debts as they become due or
the taking of corporate action by any Debtor, Pledgor, charterer under an
Assigned Charter or Guarantor in furtherance of any of the foregoing; or

     (g) The entry of a decree or order for relief by a court having
jurisdiction in respect of any Debtor, charterer under an Assigned Charter,
Pledgor or Guarantor, adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking a reorganization, arrangement,
adjustment or composition of or in respect of such Person in an involuntary
proceeding or case under the federal bankruptcy laws, as now or hereafter
constituted, or any

                                       27

other applicable federal, state or foreign bankruptcy, insolvency or other
similar law, or appointing a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or other similar official) of the such Person, or of any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) days or an assignment for the benefit of
creditors of a majority of all the assets of any Debtor, any charterer under an
Assigned Charter, Pledgor or Guarantor; or

     (h) A Mortgage Event of Default (as defined in any Mortgage) shall have
occurred or be continuing; or

     (i) The receipt by Lender of its first notice of an oil spill or discharge
or a hazardous discharge by or an environmental complaint against any Vessel or
any Debtor from a source other than a Debtor, where Lender does not receive
notice (which may be given in oral form, provided same is followed with all due
dispatch by written notice given by Certified Mail, Return Receipt Requested) of
such hazardous discharge or environmental complaint from a Debtor or the Manager
within three (3) Business Days from the time Lender first receives said notice
from a source other than a Debtor or the Manager; or

     (j) Assertion by any federal, state, or local agency of a Lien (i) upon any
Collateral, or (ii) if it materially adversely affects any Debtor, charterer
under any Assigned Charter or Guarantor, upon any of the other assets,
equipment, property, leaseholds or other facilities of any Debtor by reason of
the occurrence of a hazardous discharge or environmental complaint and such lien
is not removed within ten (10) days of Debtors becoming aware thereof or as
otherwise provided in the Mortgages; or

     (k) Any party thereto shall terminate, purport to terminate, rescind or
cease to perform in any material respect the provisions of any Assigned Charter;
or

     (1) This Agreement or any other Loan Document shall cease to be in full
force and effect or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by any Debtor, Pledgor, charterer
under any Assigned Charter, Guarantor or Manager.

     SECTION 8. REMEDIES.

     8.1 If an Event of Default specified in Sections 7(f) or (g) above shall
occur, then, and in any such event, the Commitment shall immediately terminate
and the principal amount outstanding under the Note, together with accrued
interest thereon, and all other amounts owing under or with respect to this
Agreement and the other Loan Documents, shall become immediately due and payable
without any notice or other action by Lender, and if any other Event of Default
shall occur and be continuing, then, and in any such event, Lender may, by
notice of default given to the Debtors, (a) terminate forthwith the Commitment
and/or (b) declare the Note and all other amounts owing thereunder or with
respect to this Agreement to be forthwith due and payable, whereupon the
principal amount of the Note, together with accrued interest thereon and all
other amounts owing thereunder or with respect to this Agreement and the other
Loan Documents shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived to the extent permitted by applicable law. During the continuance of any
Event of Default hereunder,

                                       28

Lender shall have the right to pursue and enforce any of its rights and remedies
under this Section 8.

     8.2 If an Event of Default shall occur and be continuing, Lender may
exercise, in addition to all other rights and remedies granted to it in this
Agreement, the Note, the Mortgages, the Pledge Agreements, the Guaranties, the
Assignments, any other Loan Document and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
secured parties under the Code or under any other applicable law. Without
limiting the generality of the foregoing, each Debtor agrees that in any such
event, Lender may exercise any or all of such Debtor's respective rights, and
Lender, without demand of performance or other demand, advertisement or notice
of any kind (except the notice specified below of time and place of public or
private sale) to or upon the Debtors, Pledgor or any other Person (all and each
of which demands, advertisements and/or notices are hereby expressly waived),
may forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give an option or
options to purchase or otherwise dispose of and deliver the Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Lender's
offices or elsewhere at such prices as it may deem best, for cash or a credit or
for future delivery without assumption of any credit risk. Lender shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Debtor,
which right or equity is hereby expressly released to the extent permitted by
applicable law. Each Debtor further agrees, at Lender's request, to assemble and
to cause Pledgor to assemble the Collateral, make it available to Lender at
places which Lender shall reasonably select, whether at any Debtor's premises or
elsewhere. Lender shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale (after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care,
safekeeping or otherwise of any or all of the Collateral or in any way relating
to the rights of Lender hereunder, including reasonable attorneys' fees and
expenses) to the payment in whole or in part of the Obligations, in such order
as Lender may elect and only after so applying such net proceeds and after the
payment by Lender of any other amount required by any provision of law need
Lender account for the surplus, if any, to the Debtor. To the extent permitted
by applicable law, each Debtor waives all claims, damages, and demands against
Lender arising out of the repossession, retention or sale of the Collateral.
Each Debtor agrees that Lender need not give more than ten (10) days' notice
(which notification shall be deemed given when mailed, postage prepaid,
addressed to such Debtor at its address set forth in Section 9.2 hereof) of the
time and place of any public sale or of the time after which a private sale may
take place and that such notice is reasonable notification of such matters. The
Debtors shall be jointly and severally liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay any and all
Obligations due Lender under any of this Agreement, the Note and the other Loan
Documents.

     8.3 The Debtors agree to pay all costs of Lender, including reasonable
attorneys' fees and disbursements, incurred with respect to the collection of
any of the Obligations and the enforcement of any of their rights hereunder or
under any other of the Loan Documents.

                                       29

     8.4 The Debtors hereby waive presentment, demand, protest or any notice (to
the extent permitted by applicable law) of any kind in connection with this
Agreement, any other Loan Document or the Collateral.

     SECTION 9. MISCELLANEOUS.

     9.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of
Lender in exercising any right, remedy, power or privilege hereunder or under
the Note or any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. No right or remedy in
this Agreement or any other Loan Document is intended to be exclusive but each
shall be cumulative and in addition to any other remedy referred to herein or
otherwise available to Lender at law or in equity; and the exercise by Lender of
any one or more of such remedies shall not preclude the simultaneous or later
exercise by Lender of any or all such other remedies. To the extent permitted by
law, each Debtor waives any rights now or hereafter conferred by statute or
otherwise which limit or modify any of Lender's rights or remedies under this
Agreement or any other Loan Document.

     9.2 NOTICES. All notices, requests and demands to or upon any party hereto
shall be deemed to have been duly given or made when sent by telecopier with
telephonic confirmation, or deposited in the United States mail, first class
postage prepaid, or sent by a nationally recognized overnight courier service,
addressed to such party as follows, or to such other address as may be hereafter
designated in writing by such party to the other party hereto:

     Debtors:          STRATFORD SHIPPING CORP.
                       P.O. Box HM 2522
                       Hamilton HMGX
                       BERMUDA
                       Attention: William J. Carr
                       Facsimile No.: 1441-295-4957

                       SHEFFIELD MARITIME CORP.
                       P.O. Box HM 2522
                       Hamilton HMGX
                       BERMUDA
                       Attention: William J. Carr
                       Facsimile No.: 1441-295-4957

     with a copy to:   TBS Shipping Services Inc.
                       612 East Grassy Sprain Rd.
                       Yonkers, NY 10710 USA
                       Attention: Ferdinand V. Lepere
                       Facsimile No.: 914/961-5121

     and:              Cardillo & Corbett
                       29 Broadway

                                       30

                       New York, NY 10006 USA
                       Attention: Tulio R. Prieto, Esq.
                       Facsimile No.: 212/797-1212

     Lender:           MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC.,
                       ACTING THROUGH ITS DIVISION, MERRILL LYNCH
                       CAPITAL
                       222 N. LaSalle St.
                       Chicago, IL 60601
                       Attention: Group Senior Credit Officer
                       Facsimile No.: 312/750-6108

     with a copy to:   MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC.,
                       ACTING THROUGH ITS DIVISION, MERRILL LYNCH
                       CAPITAL
                       222 N. LaSalle St.
                       Chicago, IL 60601
                       Attention: Frank J. Stancato, Esq. - Vice President
                       Facsimile No.: 312/750-6108

     9.3 PAYMENT OF EXPENSES AND TAXES; INDEMNITY; PERFORMANCE BY LENDER OF THE
DEBTORS' OBLIGATIONS.

     (a) The Debtors agree, whether or not the transactions contemplated by this
Agreement and the other Loan Documents shall be consummated, to be jointly and
severally liable for and to pay (i) all reasonable costs and expenses of Lender
in connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Loan Documents, and the other documents relating hereto,
including, without limitation, the fees and disbursements of counsel to Lender;
(ii) all fees and taxes in connection with the recording of this Agreement, the
Mortgages and the other Loan Documents or any other document or instrument
required hereby or thereby; and (iii) all reasonable costs and expenses of
Lender in connection with the enforcement of this Agreement, the Note and the
other Loan Documents, including all reasonable legal fees and disbursements
arising in connection therewith. The Debtors also jointly and severally agree to
pay, and to jointly and severally indemnify and save Lender harmless from and
against any and all taxes, including, without limitation, non-U.S. taxes imposed
on Lender and measured by or with reference to income of Lender based on receipt
of payments made or on behalf of any Debtor pursuant to this Agreement, the Note
or other Loan Documents, sales, use, stamp and personal property taxes (other
than any corporate income, capital, franchise or similar taxes payable by Lender
with respect to the payments made to Lender hereunder or thereunder) and all
license, filing, and registration fees and assessments and other charges, if
any, which may be payable or determined to be payable in connection with the
execution, delivery and performance of this Agreement, the Note or the other
Loan Documents or any modification thereof or supplement thereto.

     (b) The Debtors hereby further jointly and severally agree, whether or not
the transactions contemplated by this Agreement shall be consummated, and
whether or not the Loan has been made by Lender to the Debtors, to jointly and
severally pay, indemnify, and hold

                                       31

Lender harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, suits, out-of-pocket
costs, expenses (including legal expenses) or disbursements of any kind or
nature whatsoever arising out of or with respect to this Agreement, the other
Loan Documents, the Vessels, the other Collateral or Lender's interest therein,
including, without limitation, the execution, delivery, enforcement,
performance, administration, amendment or modification of this Agreement, the
Note and the other Loan Documents and the manufacture, purchase, ownership,
possession, use, selection, operation or condition of the Vessel or any part
thereof (the foregoing being referred to as the "indemnified liabilities");
provided, however, that the Debtors shall not have any obligation hereunder with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of Lender.

     (c) If any Debtor fails to perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of Lender incurred
in connection with such performance or compliance, together with interest
thereon at the rate provided for in the Note shall be payable by the Debtor to
Lender on demand and until such payment shall constitute Obligations secured
hereby.

     9.4 PROPOSAL FEE. Debtors have already paid, and Lender acknowledges
receipt of, U.S.$75,000.00 of the U.S.$150,000.00 agreed Proposal Fee. On the
Funding Date, Debtors shall pay to Lender the balance of the Proposal Fee in the
amount of U.S.$75,000.00

     9.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Agreement or any of the other Loan Documents and any
certificates delivered pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the making of the Loan hereunder and the
agreements contained in Section 9.3 hereof shall survive payment of the Note.

     9.6 AMENDMENTS; WAIVERS. No provision of this Agreement, the Note, any
other Loan Document or any related agreements may be amended or modified in any
way, nor may noncompliance therewith be waived, except pursuant to a written
instrument executed by Lender and the Debtors. In the case of any waiver, Lender
and the Debtors shall be restored to their former position and rights hereunder,
under the Note, any other Loan Document and under any related agreements, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall in any way be, or be construed to be, a
waiver of any other or subsequent Default or Event of Default, or impair any
right consequent thereon.

     9.7 COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     9.8 AUTHORIZATION TO DATE, COMPLETE BLANKS AND CORRECT ERRORS. Each Debtor
hereby irrevocably authorizes Lender and Lender's agents, representatives and
employees to date, to complete any blank spaces contained in, and to correct any
typographical or mathematical errors appearing in, this Agreement, the Note or
in any other Loan Documents or other documents pertaining hereto or thereto.

                                       32

     9.9 MERGER CLAUSE. This Agreement and the other Loan Documents contain the
complete, final and exclusive statement of the terms of the agreement between
Lender and the Debtors relating to the transactions hereby contemplated

     9.10 SUCCESSORS OR ASSIGNS. THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE DEBTORS AND LENDER AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS, EXCEPT THAT NO DEBTOR MAY ASSIGN OR TRANSFER ITS RIGHTS HEREUNDER OR
ANY INTEREST HEREIN. LENDER MAY ASSIGN ANY INTEREST IN THIS AGREEMENT AND THE
LOAN DOCUMENTS.

     9.11 CONSTRUCTION. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability shall
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by law, each Debtor hereby waives any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.
THIS AGREEMENT AND (EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN ANY OTHER LOAN
DOCUMENT) THE OTHER LOAN DOCUMENTS SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES
OF AMERICA, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE
(WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN TITLE 14 OF
ARTICLE 5 OF THE GENERAL OBLIGATIONS LAW).

     9.12 JURISDICTION. EACH DEBTOR HEREBY IRREVOCABLY CONSENTS AND AGREES THAT
ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN ANY WAY IN CONNECTION
WITH THIS AGREEMENT MAY BE INSTITUTED OR BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK, IN THE COUNTY OF NEW YORK, OR THE UNITED STATES COURTS FOR THE
SOUTHERN DISTRICT OF NEW YORK, AS LENDER MAY ELECT, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH DEBTOR HEREBY IRREVOCABLY ACCEPTS AND SUBMITS
TO, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, AND TO ALL PROCEEDINGS IN SUCH
COURTS. EACH DEBTOR IRREVOCABLY CONSENTS TO SERVICE OF ANY SUMMONS AND/OR LEGAL
PROCESS BY REGISTERED OR CERTIFIED UNITED STATES AIR MAIL, POSTAGE PREPAID, TO
SUCH DEBTOR AT THE ADDRESS SET FORTH IN SECTION 9.2 HEREOF, SUCH METHOD OF
SERVICE TO CONSTITUTE, IN EVERY RESPECT, SUFFICIENT AND EFFECTIVE SERVICE OF
PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING. NOTHING IN THIS AGREEMENT SHALL
AFFECT THE RIGHT TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
LIMIT THE RIGHT TO BRING ACTIONS, SUITS OR PROCEEDINGS IN THE COURTS OF ANY
OTHER APPROPRIATE JURISDICTION. EACH DEBTOR FURTHER AGREES THAT FINAL JUDGMENT
AGAINST IT IN ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES
OF AMERICA, BY

                                       33

SUIT ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE
CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF THE LIABILITY.

     9.13 WAIVER OF TRIAL BY JURY. EACH DEBTOR AND LENDER IN ANY LITIGATION
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT IN WHICH THEY SHALL BE ADVERSE
PARTIES WAIVE TRIAL BY JURY.

     9.14 NECESSARY OR INDISPENSABLE PARTIES. EACH DEBTOR WAIVES ANY CLAIM OR
DEFENSE IT MAY HAVE THAT ANY OTHER DEBTOR, PLEDGOR, GUARANTOR OR ANY OTHER
PERSON WHATSOEVER IS EITHER A NECESSARY OR INDISPENSABLE PARTY IN ANY ACTION
COMMENCED BY LENDER AGAINST SUCH DEBTOR'S VESSEL OR AGAINST SUCH DEBTOR IN ANY
WAY IN RESPECT OF THE LOAN, ANY VESSEL, THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT.

                            [signature page follows]

                                       34

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

                                    STRATFORD SHIPPING CORP.

                                    By: /s/ Ferdinand V. Lepere
                                        ----------------------------------------
                                        Name: Ferdinand V. Lepere
                                        Title: Attorney-in-Fact

                                    SHEFFIELD MARITIME CORP.

                                    By: /s/ Ferdinand V. Lepere
                                        ----------------------------------------
                                        Name: Ferdinand V. Lepere
                                        Title: Attorney-in-Fact

                                    MERRILL LYNCH BUSINESS FINANCIAL
                                    SERVICES, INC., ACTING THROUGH ITS DIVISION,
                                    MERRILL LYNCH CAPITAL

                                    By: /s/ Steve Coley
                                        ----------------------------------------
                                        Name: Steve Coley
                                        Title: Vice President-Region Credit
                                               Manager

                                       35

                                 ACKNOWLEDGMENT

STATE OF NEW YORK  )
                   ) SS.:
COUNTY OF NEW YORK )

     On this ___ of August, 2004, before me personally appeared Ferdinand V.
Lepere, who, being by me duly sworn, deposes and says that he resides at 5670
Amboy Road, Staten Island, New York 10309 USA; that he is Attorney-in-Fact of
Stratford Shipping Corp., the Marshall Islands corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the Board of Directors of said corporation and the said instrument is
the act and deed of said corporation.

     In witness whereof, I have hereunto set my hand and affixed my official
seal.

                                        ----------------------------------------
                                        Notary Public

                                       36

                                                                       Exhibit A

                                     FORM OF
                              LETTER OF UNDERTAKING

                                                                       Exhibit B

                             SECURED PROMISSORY NOTE

                                                                       Exhibit C

                                     FORM OF
                            CERTIFICATE OF COMPLIANCE

                                   SCHEDULE 1

                                   GUARANTORS

                                   SCHEDULE 2

                                OTHER SHIPOWNERS

                                   SCHEDULE 3

              PENDING OR THREATENED ACTIONS, SUITS AND PROCEEDINGS
 AGAINST THE DEBTORS, CHARTERERS UNDER ASSIGNED CHARTERS, PLEDGOR OR GUARANTORS

                                   SCHEDULE 4

                        [VIOLATIONS OF ENVIRONMENTAL LAW]

                                   SCHEDULE 5

                                   SUBCHARTERS================================================================================

                          GMAC COMMERCIAL FINANCE LLC,
                            AS AGENT FOR THE LENDERS

                           TBS INTERNATIONAL LIMITED,
                                  AS GUARANTOR

                             HENLEY MARITIME CORP.,
                             VERNON MARITIME CORP.,
                                       AND
                              ARDEN MARITIME CORP.,
                                  AS BORROWERS

                                       and

                  THE LENDERS FROM TIME TO TIME A PARTY HERETO

                                   ----------

                                CREDIT AGREEMENT

                            Dated as of June 1, 2004

                                   ----------

                           THACHER PROFFITT & WOOD LLP

================================================================================

PRELIMINARY STATEMENT .........................................................1

ARTICLE I          DEFINITIONS.................................................6
   Section 1.01    Definitions.................................................6
   Section 1.02    Interpretation..............................................6
   Section 1.03    Accounting Terms............................................7
   Section 1.04    Computation of Time Periods.................................7

ARTICLE II         INITIAL LOANS AND ADDITIONAL LOANS..........................7
   Section 2.01    Initial Loans...............................................7
   Section 2.02    Additional Loans............................................9
   Section 2.03    Interest on the Loans......................................11
   Section 2.04    Maximum Interest Rate......................................11
   Section 2.05    Repayment..................................................12
   Section 2.06    Mandatory Permanent Reduction of Commitments...............12
   Section 2.07    Optional Prepayment of Loans...............................12
   Section 2.08    Application of Payments....................................13
   Section 2.09    Manner of Payments.........................................13
   Section 2.10    Register of Notes; Lost and Mutilated Notes................14
   Section 2.11    Change in Circumstances....................................15
   Section 2.12    Illegality.................................................16
   Section 2.13    Taxes......................................................16
   Section 2.14    Break Funding Payments.....................................17
   Section 2.15    Alternate Rate of Interest.................................18

ARTICLE III        RESERVED...................................................18

ARTICLE IV         REPRESENTATIONS, WARRANTIES AND AGREEMENTS.................18
   Section 4.01    Company Status.............................................18
   Section 4.02    Company Power and Authority................................19
   Section 4.03    No Violation...............................................19
   Section 4.04    Governmental Approvals.....................................19
   Section 4.05    Financial Statement; Financial Condition; Undisclosed
                      Liabilities; etc........................................19
   Section 4.06    Litigation.................................................20
   Section 4.07    No Default.................................................20
   Section 4.08    Use of Proceeds; Margin Regulations........................20
   Section 4.09    Tax Returns and Payments...................................21
   Section 4.10    Compliance with ERISA......................................21
   Section 4.11    Ownership; Subsidiaries....................................23
   Section 4.12    Compliance with Laws.......................................23
   Section 4.13    Investment Company Act; Public Utility Holding Company
                      Act.....................................................23
   Section 4.14    Environmental Matters......................................23
   Section 4.15    Labor Relations............................................24

                                        i

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----
   Section 4.16    Patents, Licenses, Franchises and Formulas.................24
   Section 4.17    Security Interests.........................................24
   Section 4.18    Indebtedness...............................................25
   Section 4.19    Solvency...................................................25
   Section 4.20    Concerning the Vessels.....................................25
   Section 4.21    Citizenship................................................26
   Section 4.22    Vessel Classification......................................26
   Section 4.23    No Material Adverse Change.................................26
   Section 4.24    Insurance..................................................26
   Section 4.25    Principal Place of Business and Chief Executive Office.....26
   Section 4.26    Legal Name.................................................26
   Section 4.27    Representations and Warranties True and Correct............26

ARTICLE V          CONDITIONS OF LENDING......................................26
   Section 5.01    Conditions Precedent to Drawdown of any Loan...............26
   Section 5.02    Further Conditions Precedent...............................31

ARTICLE VI         AFFIRMATIVE COVENANTS......................................31
   Section 6.01    Existence..................................................31
   Section 6.02    Payment of Debts...........................................32
   Section 6.03    Accounts and Records.......................................32
   Section 6.04    Payment of Taxes and Claims................................32
   Section 6.05    Financing Statements.......................................32
   Section 6.06    Compliance with Law........................................32
   Section 6.07    Financial Statements and Reports...........................33
   Section 6.08    Access to Books and Records................................34
   Section 6.09    Notifications..............................................34
   Section 6.10    Performance of Obligations.................................34
   Section 6.11    Environmental Matters......................................34
   Section 6.12    Transaction Document Obligations...........................35
   Section 6.13    ERISA......................................................36
   Section 6.14    Fixed Charge Coverage Ratio................................37
   Section 6.15    Obligations of Westbrook...................................37
   Section 6.16    Total Funded Debt Ratio....................................37
   Section 6.17    Minimum Fair Market Value of the Vessels...................37
   Section 6.18    Ownership of Borrowers.....................................37
   Section 6.19    Delivery of Charters.......................................37
   Section 6.20    Vessel Operations and Management...........................38
   Section 6.21    Appraisals.................................................39
   Section 6.22    Reimbursement for Expenses.................................39
   Section 6.23    Insurance..................................................39
   Section 6.24    Reserved...................................................40
   Section 6.25    Purchase Agreements........................................40

                                       ii

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----
   Section 6.26    Investment Company Act.....................................40
   Section 6.27    Payments on Collateral.....................................40
   Section 6.28    Maintenance of Vessels.....................................40
   Section 6.29    Registration and Documentation.............................40

ARTICLE VII        NEGATIVE COVENANTS.........................................41
   Section 7.01    Indebtedness...............................................41
   Section 7.02    Liens......................................................41
   Section 7.03    Asset Sales................................................41
   Section 7.04    Assignment of Insurances...................................41
   Section 7.05    Sale of Notes or Accounts Receivable.......................41
   Section 7.06    Sale and Leaseback.........................................41
   Section 7.07    Restricted Payments........................................41
   Section 7.08    Investments................................................41
   Section 7.09    Restriction on Payment Restrictions Affecting Borrowers....42
   Section 7.10    Change in Business.........................................42
   Section 7.11    OFAC.......................................................42
   Section 7.12    Transactions with Affiliates...............................42
   Section 7.13    Changes in Offices or Names................................43
   Section 7.14    Changes in Fiscal Year.....................................43
   Section 7.15    Other Indebtedness.........................................43
   Section 7.16    Consolidation, Merger and Sale of Assets...................43
   Section 7.17    Prohibited Transactions....................................44
   Section 7.18    Amendment or other Modification of Certain Documents.......44
   Section 7.19    Regarding the Vessels......................................44

ARTICLE VIII       AGREEMENT TO GUARANTEE.....................................44
   Section 8.01    Obligations Guaranteed.....................................44
   Section 8.02    Guarantee Obligations of Guarantor Unconditional...........46
   Section 8.03    Waiver by Guarantor; Expenses..............................48
   Section 8.04    Other Security.............................................48
   Section 8.05    No Set-off by the Guarantor................................49
   Section 8.06    Reserved...................................................49
   Section 8.07    Limitation on Liability....................................49

ARTICLE IX         EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS.......49
   Section 9.01    Events of Default..........................................49
   Section 9.02    Waiver of Default..........................................51
   Section 9.03    Remedies...................................................52
   Section 9.04    Rights of Set-Off..........................................52
   Section 9.05    Rights and Remedies Cumulative.............................52
   Section 9.06    Specific Remedies..........................................53

                                      iii

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----
   Section 9.07    Restoration of Rights and Remedies.........................54

ARTICLE X          RELATIONSHIP AMONG THE LENDERS.............................54
   Section 10.01   Appointment and Authorization..............................54
   Section 10.02   Delegation of Duties.......................................55
   Section 10.03   Liability of Agent.........................................55
   Section 10.04   Reliance by the Agent......................................55
   Section 10.05   Notice of Default..........................................56
   Section 10.06   Credit Decision............................................56
   Section 10.07   Indemnification............................................57
   Section 10.08   Agent in Individual Capacity...............................57
   Section 10.09   Successor Agent............................................57
   Section 10.10   Collateral Matters.........................................59
   Section 10.11   Assignments, Participations, Etc...........................59
   Section 10.12   Other Matters Pertaining to the Agent......................62

ARTICLE XI         MISCELLANEOUS..............................................62
   Section 11.01   Notices....................................................62
   Section 11.02   Survival of Agreement......................................64
   Section 11.03   Governing Law..............................................64
   Section 11.04   Modification of Agreement..................................64
   Section 11.05   Costs and Expenses.........................................65
   Section 11.06   Waivers....................................................66
   Section 11.07   Indemnification............................................66
   Section 11.08   Separability of Provisions; Obligations Several............67
   Section 11.09   Counterparts...............................................67
   Section 11.10   Entire Agreement...........................................67
   Section 11.11   Headings...................................................67
   Section 11.12   Successors and Assigns.....................................67
   Section 11.13   Gender and Number..........................................68
   Section 11.14   Exhibits...................................................68
   Section 11.15   Notification of Addresses, Lending Offices, Etc............68
   Section 11.16   No Third Parties Benefited.................................68
   Section 11.17   Equitable Relief...........................................68
   Section 11.18   Notice of Claims; Claims Bar...............................68
   Section 11.19   Waiver of Punitive Damages.................................69
   Section 11.20   Consent to Jurisdiction....................................69
   Section 11.21   Waiver of Jury Trial.......................................69
   Section 11.22   Currency Indemnity.........................................69
   Section 11.23   Release of Lien............................................70
   Section 11.24   Patriot Act................................................70
   Section 11.25   Time of the Essence........................................70
   Section 11.26   Obligations Joint and Several..............................70

                                       iv

EXHIBITS
EXHIBIT A   Form of Initial Loan Note
EXHIBIT B   Form of Additional Loan Note
EXHIBIT C   Form of Drawdown Request
EXHIBIT D   Form of Monthly Compliance Report
EXHIBIT E   Registered Ship Mortgage
EXHIBIT F   Pledge Agreement
EXHIBIT G   Reserved
EXHIBIT H   Form of Assignment and Acceptance

SCHEDULES
SCHEDULE I       Initial Loan Commitment and Additional Loan Commitment
SCHEDULE 4.06    Litigation
SCHEDULE 4.10    ERISA
SCHEDULE 4.11    Ownership/Equity Interests
SCHEDULE 4.14    Environmental Matters
SCHEDULE 4.18    Indebtedness
SCHEDULE 4.20    Vessel Information/Noncompliance with Maritime Rules and
                    Regulations
SCHEDULE 4.22    Conditions or Recommendations Affecting Class
SCHEDULE 4.25    Principal Place of Business and Chief Executive Office
SCHEDULE 11.01   Contact Information for Notices

                                        v

     CREDIT AGREEMENT (as amended, supplemented and otherwise modified from time
to time, this "Agreement") dated as of June 1, 2004, among Henley Maritime
Corp., a company existing under the laws of the Marshall Islands (together with
its successors and assigns, "Henley"), Vernon Maritime Corp., a company existing
under the laws of the Marshall Islands (together with its successors and
assigns, "Vernon"), Arden Maritime Corp., a company existing under the laws of
the Marshall Islands (together with its successors and assigns, "Arden" and
together with Henley and Vernon, each a "Borrower" and together the
"Borrowers"), TBS International Limited, a company existing under the laws of
Bermuda, as Guarantor (together with its successors and assigns, the
"Guarantor"), GMAC Commercial Finance LLC ("GMAC CF") and each other financial
institution which may hereafter execute and deliver an Assignment and Acceptance
with respect to this Agreement pursuant to Section 10.11 (any one individually,
a "Lender", and collectively, the "Lenders"), and GMAC CF, as administrative
agent on behalf of the Lenders (when acting in its capacity as administrative
agent under this Agreement or under any other Transaction Document, herein
referred to, together with any successor administrative agent, as the "Agent").

                              PRELIMINARY STATEMENT

     Pursuant to its respective Existing Charter, Arden and Vernon have duly
exercised its purchase option in respect of the Vessel subject thereto and
Henley has acquired all right, title and interest in and to the Tuckahoe. The
Borrowers desire to, jointly and severally, obtain the Loans from the Lenders in
an aggregate amount up to the Aggregate Loan Commitment. In order to induce the
Lenders to make the Loans to the Borrowers, the Guarantor has agreed to
guarantee the Obligations of the joint and several obligations of the Borrowers
hereunder. The Borrowers and the Guarantor have agreed to grant to the Agent on
its behalf and on the behalf of the Lenders a first priority, perfected security
interest in the Collateral to secure such Obligations. The Lenders are willing
to make the Loans in an amount up to the Aggregate Loan Commitment pursuant to
this Agreement and upon the terms and subject to the conditions set forth herein
and in reliance on the representations and warranties set forth herein.

     NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for good and valuable consideration, the receipts and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1.01 Definitions. Capitalized terms used herein, but not otherwise
defined herein shall have the meanings assigned to such terms in Appendix A
hereto. All terms defined in this Agreement shall have the defined meanings when
used in any agreement, certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.

     SECTION 1.02 Interpretation.

          (a) Words importing the singular number only shall include the plural
     and vice versa, and the use of any gender herein shall be deemed to include
     any other gender.

                                        6

          (b) Words importing persons shall include companies, firms,
     corporations, partnerships, unincorporated associations and their
     respective successors and assigns.

          (c) References herein to "Articles", "Sections", "Subsections",
     "paragraphs", and other subdivisions without reference to a document are to
     designated Articles, Sections, Subsections, paragraphs and other
     subdivisions of this Agreement.

          (d) A reference to a Subsection without further reference to a Section
     is a reference to such Subsection as contained in the same Section in which
     the reference appears, and this rule shall also apply to paragraphs and
     other subdivisions.

          (e) The term "including" or "include" shall mean without limitation by
     reason of enumeration.

     SECTION 1.03 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and all financial
statements submitted pursuant to this Agreement shall be prepared in accordance
with, and all financial data submitted pursuant hereto shall be derived from
financial statements prepared in accordance with, GAAP. With respect to the
calculations of the ratios set forth in this Agreement, the components of such
calculations are to be determined in accordance with GAAP consistently applied.
With respect to any ratio analysis required to be performed as of the most
recently completed fiscal quarter, the most recently completed fiscal quarter
shall mean the fiscal quarter for which financial statements were required
hereunder to have been delivered. All references to the Guarantor's financial
statements shall mean the consolidated financial statements of the Guarantor and
its consolidated subsidiaries. All references to a Borrower's financial
statements shall mean the consolidated financial statements of such Borrower and
its consolidated subsidiaries.

     SECTION 1.04 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."

                                   ARTICLE II
                       INITIAL LOANS AND ADDITIONAL LOANS

     SECTION 2.01 Initial Loans.

          (a) Upon satisfaction of the conditions precedent set forth in Article
     V and subject to and upon the terms and conditions of this Agreement, the
     Lenders shall make the Initial Loans available to the Borrowers, on a joint
     and several basis, for general corporate purposes of the Borrowers and
     their Affiliates.

          (b) Each Lender, relying upon each of the representations and
     warranties of the Credit Parties and the guaranty of the Guarantor, hereby
     severally and not jointly agrees with each Borrower that, upon satisfaction
     of the conditions precedent set forth in Article V and subject to and upon
     the terms and conditions of this Agreement, it will, on the initial
     Drawdown Date, make the Initial Loans available to the Borrowers in an
     aggregate amount not to exceed its Loan Commitment ratably with the other
     Lenders

                                        7

     according to their respective Loan Commitments; provided that, the Initial
     Loans shall be allocated such that Five Million Five Hundred Thousand
     Dollars ($5,500,000) shall be advanced in respect of the Mohegan Princess,
     Five Million Five Hundred Thousand Dollars ($5,500,000) shall be advanced
     in respect of the Tayrona Princess and Four Million Dollars ($4,000,000)
     shall be advanced in respect of the Tuckahoe; provided, however, that the
     Initial Loans made available by the Lenders to the Borrowers shall not
     exceed, in the case of the Tayrona Princess and the Mohegan Princess,
     68.75% of the Vessel Cost thereof and, in the case of the Tuckahoe, 64.00%
     of the Vessel Cost thereof. The maximum aggregate amount of all Loans which
     may be outstanding at any time under this Agreement is the Aggregate Loan
     Commitment, as may be reduced pursuant to Sections 2.06 and 2.07.

          (c) Reserved.

          (d) The Borrowers shall, at least two (2) Business Days prior to the
     initial Drawdown Date, deliver a Drawdown Request to the Agent in writing
     addressed to the Agent. Such Drawdown Request shall be effective on receipt
     by the Agent and shall be irrevocable. The Initial Loans shall be LIBOR
     Loans.

          (e) Such Drawdown Request shall be deemed to constitute a
     representation and warranty by each Borrower (i) that the representations
     and warranties stated in this Agreement and the other Transaction Documents
     are true, correct and complete on and as of the date of such Drawdown
     Request and will be true and correct on and as of the relevant Drawdown
     Date as if made on such date (unless, in each case, such representation and
     warranty is expressly limited to an earlier date), (ii) that after giving
     effect to the borrowing made pursuant to such Drawdown Request, the
     aggregate principal amount of all outstanding Loans will not exceed the
     Aggregate Loan Commitment, (iii) that no Default or Event of Default has
     occurred and is continuing, (iv) the Credit Parties have performed all
     agreements contained in the Transaction Documents required to be performed
     on or prior to the date thereof, and (v) no proceeding is pending which
     would prohibit consummation of the transactions, contemplated by the
     Transaction Documents. The Initial Loans made by the Lenders to the
     Borrowers shall be evidenced by one or more promissory notes in the form of
     Exhibit A attached hereto (each, as the same from time to time may be
     amended, restated, supplemented, renewed or otherwise modified, an "Initial
     Loan Note"), duly executed by each Borrower, dated as of the applicable
     Drawdown Date. Each Lender (or the Agent if only one Initial Loan Note
     shall be issued to the Agent for the benefit of the Lenders) shall, and is
     hereby authorized by each Borrower to, record on the schedule attached to
     its Initial Loan Note (or on a continuation of such schedule attached to
     such Initial Loan Note) and make a part thereof and/or such Lender's books
     and records, an appropriate notation evidencing the date and amount of each
     such Lender's Proportionate Share of such Initial Loan, which notation,
     absent manifest error, shall be prima facie evidence of the amount of the
     relevant Initial Loan. The Agent shall make notations in its books and
     records regarding the date and the amount of each repayment or prepayment
     of principal and payment of interest made by the Borrowers of the Initial
     Loans. The Agent is irrevocably authorized by Borrower to endorse each
     Initial Loan Note and the Agent's record shall be conclusive absent
     manifest error; provided, however, that the failure of the

                                        8

     Agent to make, or an error in making, any such recordation or notation with
     respect to any Initial Loans shall not limit or otherwise affect the
     Obligations of the Borrowers hereunder or under the Transaction Documents.

          (f) If one or more Lenders defaults in its obligation to pay to the
     Borrowers its Proportionate Share of the Initial Loan (the aggregate amount
     of such defaulted obligations being herein called the "Initial Unfunded
     Amount"), then upon notice from the Agent, each Non-Defaulting Lender shall
     promptly pay to the Agent, in immediately available funds, an amount equal
     to the lesser of (x) such Non-Defaulting Lender's Proportionate Share
     (based upon the relative Commitments of the Non-Defaulting Lenders) of the
     Initial Unfunded Amount and (y) the unused portion of such Non-Defaulting
     Lender's Commitment (after taking into account such Non-Defaulting Lender's
     Outstanding Loan Amount thereunder). The Agent shall then remit such funds
     to the Borrowers on behalf of each such Non-Defaulting Lender. A Defaulting
     Lender shall forthwith upon demand pay to the Agent for the account of each
     such Non-Defaulting Lender the amount paid by such Non-Defaulting Lender on
     behalf of such Defaulting Lender, together with interest thereon, for each
     day from the date such payment was made until the date such Non-Defaulting
     Lender has been paid such amounts in full, at a rate per annum equal to the
     Federal Funds Effective Rate plus 2.00%.

     SECTION 2.02 Additional Loans.

          (a) The Lenders may, in their sole discretion and on terms and
     conditions acceptable to the Lenders, make Additional Loans available to
     the Borrowers for the purpose of refinancing Indebtedness in respect of or
     acquiring, directly or through one or more Wholly-Owned Subsidiaries of the
     Guarantor, additional Vessels. Following receipt of a Drawdown Request, the
     Lenders will determine whether they will agree to make Additional Loans
     available to the Borrowers. If the Lenders decline to make the proposed
     Additional Loans, such Drawdown Request shall be deemed to be cancelled
     automatically. In the event that the Lenders elect to make available
     Additional Loans, then such Borrower, the Guarantor, the Agent and the
     Lenders shall set forth in a schedule, which together with the related
     Drawdown Request shall be deemed a part of this Agreement, the amortization
     of such Additional Loans, any Make-Whole Amount payable in connection with
     any optional prepayment thereof and such other terms and conditions as may
     be agreed upon by the Lenders, the Agent and such Borrower.

          (b) Each of the Lenders, relying upon each of the representations and
     warranties of the Credit Parties and the guaranty of the Guarantor, hereby
     severally and not jointly agrees with each Borrower that, upon its
     agreement to make Additional Loans available, satisfaction of the
     applicable conditions precedent set forth in Article V and subject to and
     upon the terms and conditions of this Agreement and such other terms and
     conditions acceptable to the Lenders, it will, on each Drawdown Date, make
     Additional Loans available to the applicable Borrower in an aggregate
     amount not to exceed its Loan Commitment ratably with the other Lenders
     according to their respective Loan Commitments. The maximum aggregate
     amount of all Loans which may be outstanding at any time under this
     Agreement is the Aggregate Loan Commitment, as may be reduced

                                        9

     pursuant to Sections 2.06 and 2.07. Each Loan shall be drawn in a Minimum
     Borrowing Amount.

          (c) The Borrowers shall, (i) in the case of a LIBOR Loan, at least
     five (5) Business Days prior to a Drawdown Date and (ii) in the case of a
     Base Rate Loan, at least two (2) Business Days prior to a Drawdown Date,
     deliver a Drawdown Request to the Agent in writing addressed to the Agent.
     Each Drawdown Request shall be effective on receipt by the Agent and shall
     be irrevocable.

          (d) Each Drawdown Request shall be deemed to constitute a
     representation and warranty by the Borrowers (i) that the representations
     and warranties of the Borrowers set forth herein are true, correct and
     complete on and as of the date of such Drawdown Request and will be true
     and correct on and as of the relevant Drawdown Date as if made on such date
     (unless, in each case, such representation and warranty is expressly
     limited to an earlier date), (ii) that after giving effect to the borrowing
     made pursuant to such Drawdown Request, the sum of the outstanding Loans
     will not exceed the Aggregate Loan Commitment, (iii) that no Default or
     Event of Default has occurred and is continuing (iv) the Credit Parties
     have performed all agreements contained in the Transaction Documents
     required to be performed on or prior to the date thereof, and (v) no
     proceeding is pending which would prohibit consummation of the
     transactions, contemplated by the Transaction Documents. The Additional
     Loans made by the Lenders to the Borrowers shall be evidenced by one or
     more promissory notes in the form of Exhibit B attached hereto (each, as
     the same from time to time may be amended, restated, supplemented, renewed
     or otherwise modified, an "Additional Loan Note"), duly executed by each
     Borrower, dated as of the applicable Drawdown Date. Each Lender (or the
     Agent if only one Additional Loan Note shall be issued to the Agent for the
     benefit of the Lenders) shall, and is hereby authorized by each Borrower
     to, record on the schedule attached to its Additional Loan Note (or on a
     continuation of such schedule attached to such Additional Loan Note) and
     make a part thereof, an appropriate notation evidencing the date and amount
     of each such Lender's Proportionate Share of such Additional Loans, which
     notation, absent manifest error, shall be prima facie evidence of the
     amount of the relevant Additional Loans. The Agent shall make notations in
     its books and records regarding the date and the amount of each repayment
     or prepayment of principal and payment of interest made by the Borrowers of
     an Additional Loan. The Agent is irrevocably authorized by Borrower to
     endorse each Additional Loan Note and the Agent's record shall be
     conclusive absent manifest error; provided, however, that the failure of
     the Agent to make, or an error in making, any such recordation or notation
     with respect to any Additional Loan shall not limit or otherwise affect the
     Obligations of the Borrowers hereunder or under the Transaction Documents.

          (e) If one or more Lenders defaults in its obligation to pay to the
     applicable Borrower its Proportionate Share of any Additional Loan (the
     aggregate amount of such defaulted obligations being herein called the
     "Additional Unfunded Amount"), then upon notice from the Agent, each
     Non-Defaulting Lender shall promptly pay to the Agent, in immediately
     available funds, an amount equal to the lesser of (x) such Non-Defaulting
     Lender's Proportionate Share (based upon the relative Commitments of the
     Non-Defaulting Lenders) of the Initial Unfunded Amount and (y) the unused
     portion of such

                                       10

     Non-Defaulting Lender's Commitment (after taking into account such
     Non-Defaulting Lender's Outstanding Loan Amount thereunder). The Agent
     shall then remit such funds to the applicable Borrower on behalf of each
     such Non-Defaulting Lender. A Defaulting Lender shall forthwith upon demand
     pay to the Agent for the account of each such Non-Defaulting Lender the
     amount paid by such Non-Defaulting Lender on behalf of such Defaulting
     Lender, together with interest thereon, for each day from the date such
     payment was made until the date such Non-Defaulting Lender has been paid
     such amounts in full, at a rate per annum equal to the Federal Funds
     Effective Rate plus 2.00%.

     SECTION 2.03 Interest on the Loans.

          (a) Each Loan shall bear interest on the outstanding principal amount
     thereof and interest on each (i) LIBOR Loan shall be payable on each
     Payment Date at a rate per annum equal to the Floating Interest Rate for
     the related Interest Period from the date when made and continued until
     paid in full and (ii) Base Rate Loan shall be payable on each Payment Date
     at a rate per annum equal to the daily average Fixed Interest Rate for the
     period from the date when made and continued until paid in full. The Agent
     shall determine the interest payable on the outstanding principal balance
     of the Loans and shall advise the Borrowers thereof three (3) Business Day
     prior to each Payment Date. Subject to the terms of this Agreement relating
     to prepayments of Loans and the acceleration of maturities such interest
     shall be due on each Payment Date and on the Maturity Date.

          (b) The duration of each Interest Period for each LIBOR Loan shall be
     one month.

          (c) Each overdue Loan, together with all unpaid interest, fees and
     other amounts payable hereunder, will bear interest at the lesser of (x)
     the Overdue Rate and (y) the maximum rate permitted be applicable on any
     part of the principal amount and interest and other amounts due thereunder
     not paid when due (whether at stated maturity, by acceleration or
     otherwise), for any period during which such Loan or other amounts are
     overdue.

     SECTION 2.04 Maximum Interest Rate. In no event shall the interest charged
with respect to a Loan exceed the maximum amount permitted by applicable law. If
at any time the Interest Rate exceeds the maximum rate permitted by applicable
law, then the rate of interest to accrue pursuant to this Agreement and such
Loan shall be limited to the maximum rate permitted by applicable law, but any
subsequent reductions in LIBOR shall not reduce the interest to accrue on such
Loan below the maximum amount permitted by applicable law until the total amount
of interest accrued on such Loan equals the amount of interest that would have
accrued if a varying rate per annum equal to the Interest Rate had at all times
been in effect. If the total amount of interest paid or accrued on a Loan under
the foregoing provisions is less than the total amount of interest that would
have accrued if the Interest Rate had at all times been in effect, then the
applicable Borrower agrees to pay to the Lenders an amount equal to the
difference between (a) the lesser of (i) the amount of interest that would have
accrued if the maximum rate permitted by applicable law had at all times been in
effect or (ii) the amount of interest that

                                       11

would have accrued if the Interest Rate had at all times been in effect, and (b)
the amount of interest accrued in accordance with the other provisions of this
Agreement.

     SECTION 2.05 Repayment. The Loans shall amortize as provided herein and
shall pay principal thereof on each Payment Date. Each Borrower shall repay all
outstanding Loans (subject to such reduction and prepayments as hereinafter set
forth) on the Maturity Date.

     SECTION 2.06 Mandatory Permanent Reduction of Commitments.

          (a) The aggregate Initial Loan Commitment shall be permanently reduced
     on each Initial Loan Reduction Date as follows:

--------------------------------------------------------------------------------
                                                  INITIAL LOAN COMMITMENT
INITIAL LOAN REDUCTION DATE                           REDUCTION AMOUNT
--------------------------------------------------------------------------------
Each Payment Date after the Closing Date   Three Hundred Twelve Thousand Five
until June 30, 2006                        Hundred Dollars ($312,500)
--------------------------------------------------------------------------------
Each Payment Date after June 30, 2006      Two Hundred Eight Thousand Three
until the Maturity Date                    Hundred Thirty Three and 33/100
                                           Dollars ($208,333.33)
--------------------------------------------------------------------------------
Maturity Date                              Outstanding Principal Balance of all
                                           Initial Loans
--------------------------------------------------------------------------------

          (b) Each Additional Loan Commitment shall be permanently reduced on
     each Additional Loan Reduction Date in accordance with the schedule
     delivered pursuant to Section 2.02(a).

          (c) If, on any Payment Date, the outstanding principal amount of the
     Loans as of such date exceeds the Aggregate Loan Commitment (as scheduled
     to be reduced on such Payment Date), then the Borrowers shall, on such
     Payment Date, make a mandatory repayment of the Loans in the amount (the
     "Reduction Amount") of such excess.

     SECTION 2.07 Optional Prepayment of Loans.

          (a) As long as no Default or Event of Default has occurred and is
     continuing, each Borrower shall have the right, upon sixty (60) days prior
     written notice to the Agent and the Lenders, to prepay on any Payment Date
     the aggregate outstanding principal balance of all Loans together with the
     Make-Whole Amount therefor. With the prior written consent of the Agent and
     as long as no Default or Event of Default has occurred and is continuing,
     each Borrower shall have the right to prepay on any Payment Date the
     outstanding principal balance of any part of a Loan together with the
     Make-Whole Amount therefor.

          (b) Any prepayment of the Loans pursuant to this Section 2.07 shall be
     subject to the condition that, on the date of prepayment, all accrued
     interest to the date of such prepayment shall be paid in full, together
     with any and all other amounts then due and payable to the Lenders and the
     Agent.

                                       12

     SECTION 2.08 Application of Payments. Unless otherwise expressly provided
herein, each payment made on a Loan will be applied, first to the payment of all
fees and expenses due to the Agent and the Lenders under this Agreement, second,
to the payment of interest on overdue interest at the Overdue Rate on such Loan
to the date of such payment, third, to the payment of interest on any overdue
Reduction Amount or other principal amount not paid when due, at the Overdue
Rate on such Loan to the date of such payment, fourth, to the payment of accrued
interest on such Loan to the date of such payment, fifth, to the payment of any
overdue Reduction Amount past due on such Loan and sixth, to the payment of the
Reduction Amount of such Loan then due.

     SECTION 2.09 Manner of Payments.

          (a) All payments made pursuant to the Credit Agreement shall be made
     without set-off or counterclaim and shall be made in immediately available
     funds by the Borrowers to the Agent for the account of the Lenders in
     accordance with their Proportionate Share. All such payments shall be made
     to the Agent, prior to 11:00 a.m., New York City time, on the date due to
     the Agent's account at Bank One, Detroit, Michigan, ABA#: 072000326,
     Account of GMAC Commercial Finance LLC, Account # 363-301-424, Reference:
     TBS, or at such other place as may be designated by the Agent to the
     Borrowers in writing. Any payments received after 11:00 a.m., New York City
     time, shall be deemed received on the next Business Day. The Agent shall
     promptly remit to each Lender, in the same type of funds as payment was
     received, each Lender's Proportionate Share according to its respective
     interest of all such payments received by the Agent for the account of such
     Lender. Subject to the definition of "Payment Date", whenever any payment
     to be made hereunder shall be stated to be due on a date other than a
     Business Day, such payment may be made on the next succeeding Business Day
     with the same effect as if made on the due date but interest shall continue
     to accrue until the date of payment.

          (b) If any Lender or other holder of a Note shall obtain any payment
     or other recovery (whether voluntary, involuntary, by application of
     offset, set-off, banker's lien, counterclaim or otherwise) on account of
     principal of or interest on any Note in excess of its Proportionate Share
     of payments and other recoveries obtained by all Lenders or other holders,
     such Lender or other holder shall purchase from the other Lenders or
     holders such participation in the Notes held by them as shall be necessary
     to cause such purchasing Lender or other holder to share the excess payment
     or other recovery with each of them; provided, however, that if all or any
     portion of the excess payment or other recovery is thereafter recovered
     from such purchasing holder, the purchase shall be rescinded and the
     purchase price restored to the extent of such recovery, but without
     interest. Each respective Borrower agrees that the Lender so purchasing a
     participation from the other Lenders under this Section 2.09(b) may
     exercise all its rights of payment, including the right of set-off, with
     respect to such participation as fully as if such Lender were the direct
     creditor of such Borrower in the amount of the participation

                                       13

     SECTION 2.10 Register of Notes; Lost and Mutilated Notes.

          (a) The Agent will maintain at its principal office a register (the
     "Register") for the purpose of registering the Notes and registering
     transfers and exchanges of Notes. The Person in whose name a Note is
     registered in accordance with this Section 2.10(a) shall for all purposes
     hereof be deemed a Lender, and none of the Agent, the Borrowers and any of
     their respective agents shall be affected by notice to the contrary. Upon
     surrender for transfer or exchange of any Note at the principal office of
     the Agent, the Borrowers will execute and deliver (in the case of any such
     transfer, in the name of the designated transferee or transferees or, in
     the case of an exchange, in the name of the holder thereof), one or more
     new Notes of the same series of a like aggregate principal amount. The
     Agent will not be required to register or exchange any surrendered Note as
     above provided during the fifteen (15) days immediately preceding any
     Payment Date. Every Note presented or surrendered for transfer or exchange
     will be duly endorsed (or be accompanied by a written instrument of
     transfer in form satisfactory to the Agent) duly executed by the holder
     thereof or his attorney duly authorized in writing. Any Note issued in a
     registration of transfer or exchange will carry the same rights to interest
     (unpaid and to accrue) carried by the Note so transferred or exchanged so
     that there will not be any loss or gain of interest on such Note. The Agent
     shall mark on each new Note (i) the dates to which principal and interest
     have been paid on the old Note and (ii) all payments and prepayments of
     principal previously made on such old Note which are allocable to such new
     Note, which markings, absent manifest error, shall be prima facie evidence
     of the foregoing.

          (b) If any Note has been mutilated, lost, stolen or destroyed, the
     Borrowers will execute and deliver a new Note of like date and tenor in
     exchange and substitution for, and upon cancellation of, such mutilated
     Note or in lieu of and in substitution for such lost, stolen or destroyed
     Note; provided, however, that the Borrowers will so execute and deliver
     such new Note only if the applicable holder has paid the reasonable
     expenses and charges of the Borrowers in connection therewith and, in the
     case of a lost, stolen or destroyed Note, (i) has filed with the Borrowers
     and the Agent evidence satisfactory to the Agent that such Note was lost,
     stolen or destroyed, and (ii) has furnished to the Agent and the Borrowers
     reasonable indemnity against any loss, claim, expense or liability arising
     as a result of such Note being lost, stolen or destroyed. Neither the
     Borrowers nor the Agent shall have any obligation to indemnify or reimburse
     such holder for any losses, claims, expenses or liabilities that it may
     suffer or incur in connection with any lost, stolen or destroyed Note. If
     any such Note has matured or is otherwise subject to payment, instead of
     issuing a new Note the Borrowers may pay the same without surrender
     thereof. Any Note issued in exchange for a lost, stolen, destroyed or
     mutilated Note will carry the same rights to interest (unpaid and to
     accrue) carried by the Note lost, stolen, destroyed or mutilated so that
     there will not be any loss or gain of interest on such Note. The Agent
     shall mark on each new Note (A) the dates to which interest has been paid
     on the old Note and (B) all payments and prepayments of principal
     previously made on such old Note which are allocable to such new Note,
     which markings, absent manifest error, shall be prima facie evidence of the
     foregoing.

                                       14

          (c) Any service charge made or expense incurred by the Agent for any
     such registration, transfer or exchange shall be paid by the holder
     requesting such registration, transfer or exchange. Upon the issuance of a
     new Note or Notes pursuant to Section 2.10(a) or 2.10(b) hereof, each of
     the applicable Borrowers and the Agent may require from the party
     requesting such new Note or Notes payment of a sum to reimburse the
     applicable Borrower for, or to provide funds for, the payment of any tax or
     other governmental charge in connection therewith or any charges and
     expenses connected with such tax or other governmental charge paid or
     payable by any Borrower.

     SECTION 2.11 Change in Circumstances.

          (a) If after the date of this Agreement, there shall have occurred the
     adoption of any applicable law, rule or regulation regarding capital
     adequacy, or any change therein, or any change in the interpretation or
     administration thereof by any Governmental Authority, central bank or
     comparable agency, that a Lender has reasonably determined has or would
     have the effect of reducing the rate of return on the Lender's capital or
     the capital of its direct or indirect holding company or the capital of the
     Lender's source of funding to a level below that which such Lender or its
     holding company or its funding source would have achieved but for such
     adoption, change or compliance (taking into consideration such Lender's or
     its holding company's or its funding source's policies with respect to
     capital adequacy) by an amount which such Lender, in its reasonable
     judgment, shall deem material, then from time to time, the Borrowers shall
     pay to such Lender such additional amount or amounts as will compensate
     such Lender or its holding company or its funding source for such
     reduction. A certificate as to such amounts submitted to the Borrowers by
     such Lender shall be conclusive and binding for such purposes, absent
     manifest error; provided, however, that the determination of such
     additional amount or amounts shall be made in good faith in a manner
     generally consistent with such Lender's standard practice.

          (b) If after the date of this Agreement, there shall have occurred the
     adoption of any applicable law, rule or regulation regarding the
     maintenance of reserves, special deposits, compulsory loans or similar
     requirements against assets held by, deposits or liabilities in or for the
     account of, advances, loans or other extensions of credit by, or any other
     acquisition of funds by, any office, affiliate or funding source of such
     Lender which is not otherwise included in the determination of the Interest
     Rate hereunder, or any change therein, or any change in the interpretation
     or administration thereof by any Governmental Authority, central bank or
     comparable agency, that a Lender has reasonably determined has or would
     have the effect of increasing the cost to such Lender or such Lender's
     direct or indirect holding company or such Lender's funding source, by an
     amount which such Lender deems to be material, with respect to making,
     continuing or maintaining the LIBOR Loans, or to reduce any amount
     receivable hereunder in respect thereof, then, in any such case, the
     applicable Borrower shall promptly pay such Lender, upon its demand, any
     additional amount or amounts as will compensate such Lender or holding
     company or funding source for such increased cost or reduced amount
     receivable. A certificate as to such amounts submitted to such Borrower by
     such Lender shall be conclusive and binding for such purposes, absent
     manifest error; provided,

                                       15

     however, that the determination of such additional amount or amounts shall
     be made in good faith in a manner generally consistent with such Lender's
     standard practice.

     SECTION 2.12 Illegality. Notwithstanding any other provision herein, if any
Change in Law shall make it unlawful for any Lender to make or maintain any
portion of a Loan as a LIBOR Loan, such Lender shall so notify the Borrowers and
the Agent in writing and interest on such portion of such Loan shall thereafter
be calculated by reference to the Base Rate. If any such change in the method of
calculating interest is required, pursuant to such change in law, to be made on
a day which is not the last day of an Interest Period, the applicable Borrower
shall pay to such Lender the amounts, if any, as may be required pursuant to
Section 2.14.

     SECTION 2.13 Taxes.

          (a) Any and all payments on account of any Obligations shall be made
     free and clear of and without deduction for any Taxes (other than, and
     excluding, Excluded Taxes); provided, however, that if any Borrower shall
     be required to withhold or deduct any Indemnified Taxes from any such
     payment, the amount of such payment shall be increased as necessary so that
     after making all required withholdings or deductions (including
     withholdings or deductions applicable to additional sums payable under this
     Section 2.13) the Lenders receive an amount equal to the sum that they
     would have received had no such deductions been made. Such Borrower shall
     pay the full amount withheld or deducted to the relevant Governmental
     Authority in accordance with applicable law.

          (b) Each Borrower shall indemnify each Indemnified Party within twenty
     (20) days after written demand therefor for the full amount of any
     Indemnified Taxes payable with respect to or on account of any Obligation
     (including Taxes imposed on or attributable to amounts payable under this
     Section 2.13) and any penalties, interest, and reasonable expenses arising
     therefrom or with respect thereto, whether or not such Indemnified Taxes
     were correctly or legally imposed or asserted by the relevant Governmental
     Authority. In the case of Indemnified Taxes paid by an Indemnified Party, a
     certificate as to the amount of such payment or liability delivered to the
     Borrowers by such Indemnified Party shall be conclusive absent manifest
     error.

          (c) As soon as practicable after any payment of Indemnified Taxes or
     Other Taxes by the Borrowers to a Governmental Authority, the Borrowers
     shall deliver to such Indemnified Party the original or a certified copy of
     a receipt issued by such Governmental Authority evidencing such payment, a
     copy of the return reporting such payment or other evidence of such payment
     reasonably satisfactory, to such Indemnified Party.

          (d) Each Indemnified Party not incorporated or organized under the
     laws of the United States or a state thereof shall deliver to the Borrowers
     and the Agent prior to the first date on which any payment is due such
     entity hereunder two duly completed copies of United States Internal
     Revenue Service Form W-8BEN or W-8ECI, or successor applicable form, as the
     case may be, certifying in each case that such entity is entitled to
     receive payments under the Loan without withholding or deduction of any

                                       16

     United States federal income tax. Each entity required to deliver Forms
     W-8BEN or W-8ECI, or successor applicable form pursuant to the preceding
     sentence, further undertakes to deliver to the Borrowers and the Agent two
     further copies of W-8BEN or W-8ECI, or successor applicable forms, as the
     case may be, on or before the date that any such form expires or becomes
     obsolete or after the occurrence of any event requiring a change in the
     most recent forms previously delivered by it to the Borrowers and the
     Agent, unless in any such case an event (including, without limitation, any
     change in treaty, law or regulation or in the interpretation thereof) has
     occurred prior to the date on which any such delivery otherwise would be
     required which renders all such forms inapplicable or which would prevent
     such entity from duly completing and delivering any such form. The
     Borrowers shall not be obligated to pay any Indemnified Party any amounts
     pursuant to this Section 2.13 in respect of Indemnified Taxes that would
     not have been imposed but for failure of the Indemnified Party to comply
     with this Section 2.13(d).

          (e) Reserved.

          (f) The Borrowers shall pay any Other Taxes to the relevant
     Governmental Authority in accordance with applicable law.

          (g) If a Lender or the Agent shall become aware that it is entitled to
     claim a refund from a Governmental Authority in respect of Taxes or Other
     Taxes as to which it has been indemnified by a Borrower, or with respect to
     which any Borrower has paid additional amounts, pursuant to this Section
     2.13, it shall promptly notify such Borrower of the availability of such
     claim and shall, within thirty (30) days after receipt of a request by such
     Borrower, make a claim to such Governmental Authority for such refund at
     such Borrower's expense. If a Lender or the Agent receives a refund in
     respect of any Taxes or Other Taxes with respect to which any Borrower has
     paid additional amounts pursuant to this Section 2.13, it shall within
     thirty (30) days from the date of such receipt pay over such refund to such
     Borrower (but only to the extent of indemnity payments made, or additional
     amounts paid, by such Borrower under this Section 2.13 with respect to the
     Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
     expenses of such Lender or the Agent and without interest (other than
     interest paid by the relevant Governmental Authority with respect to such
     refund); provided, however, that each Borrower, upon the request of such
     Lender or the Agent, agrees to repay the amount paid over to such Borrower
     (plus penalties, interest or other charges payable to the relevant
     Governmental Authority) to such Lender or the Agent in the event such
     Lender or the Agent is required to repay such refund to such Governmental
     Authority.

          (h) The agreements in this Section 2.13 shall survive the termination
     of this Agreement and the Transaction Documents and the payment of all
     amounts payable hereunder and thereunder.

     SECTION 2.14 Break Funding Payments. Each Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by such Borrower in
making a borrowing of a LIBOR Loan after such Borrower has given irrevocable
notice requesting such borrowing in

                                       17

accordance with Section 2.01 or 2.02 or (b) a prepayment of a LIBOR Loan on any
day other than the last day of the Interest Period applicable to such Loan. The
provisions of this Section 2.14 shall survive the termination of the Transaction
Documents and the payment of all amounts payable hereunder and thereunder. A
certificate as to any additional amounts payable pursuant to this Section 2.14
submitted by such Lender to such Borrower shall (i) set forth the basis for
requesting such amounts and (ii) be conclusive absent manifest error.

     SECTION 2.15 Alternate Rate of Interest. If prior to the commencement of
any Interest Period: (a) the Agent determines (which determination shall be
reasonably made and shall be conclusive absent manifest error) that, by reason
of changes arising after the date of this Agreement affecting the interbank
LIBOR market, or any Lender's (or its funding source's) position in such market,
adequate and reasonable means do not exist for ascertaining Adjusted LIBOR, for
such Interest Period, or (b) the Agent is advised by any Lender that, by reason
of changes arising after the date of this Agreement affecting the interbank
LIBOR market, or any Lender's (or its funding source's) position in such market,
Adjusted LIBOR for such Interest Period will not adequately and fairly reflect
the cost to such Lender of making or maintaining such Lender's Proportionate
Share of the Loans during such Interest Period, then the Agent shall promptly
give notice thereof to the Borrowers, any until the Agent notifies the Borrowers
that the circumstances giving rise to such notice no longer exist, the Loans
shall not be LIBOR Loans and interest on the Loans shall be calculated by
reference to the Base Rate (in the case of clause (a) above) or such Lender's
Proportionate Share of the Loan (in the case of clause (b) above) shall not be a
LIBOR Loan and interest on such portion of the Loans shall be calculated by
reference to the Base Rate. In the case of either (a) or (b) above, each Lender
agrees to use reasonable efforts to provide the Borrowers with terms and
conditions similarly extended to such Lender's other similarly affected
borrowers as a result of the occurrence of (a) or (b) above; provided that, for
greater certainty, with respect to GMAC, as Lender, "Lender", as used in this
sentence, means GMAC Commercial Finance LLC Equipment Finance Division and not
any other division or Affiliate of GMAC CF.

                                   ARTICLE III
                                    RESERVED

                                   ARTICLE IV
                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS

     In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Facility available, as of the Closing Date
and each Drawdown Date, each Credit Party hereby represents and warrants to the
Agent and the Lenders (which representations and warranties shall survive the
execution and delivery of this Agreement, the Notes and the other Transaction
Documents and the drawdown of the Loans) that:

     SECTION 4.01 Company Status. Each Credit Party (i) is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
incorporation or formation, (ii) has the organizational power and authority,
together with all governmental, regulatory and/or binding authority approvals,
licenses and permits, to own and operate its property (including, without
limitation, the Vessels) and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in

                                       18

good standing in each jurisdiction where the conduct of its business requires
such qualifications, except where the failure to be so qualified is not
reasonably expected to result in a Material Adverse Change.

     SECTION 4.02 Company Power and Authority. Each Credit Party has the
requisite power and authority to execute, deliver and perform the terms and
provisions of each of the Transaction Documents to which it is party and has
taken all necessary action to authorize the execution, delivery and performance
by it of each of such Transaction Documents. Each Credit Party has duly executed
and delivered each of the Transaction Documents to which it is party, and each
of such Transaction Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that such enforceability may be limited by any applicable
bankruptcy, insolvency or similar laws generally affecting the enforcement of
creditor's rights and by general principles of equity.

     SECTION 4.03 No Violation. Neither the execution, delivery or performance
by any Credit Party of the Transaction Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene or
violate any provision of any applicable law, statute, rule or regulation or any
applicable order, writ, injunction or decree of any court or governmental
instrumentality, other than any such contravention or violation that could not
reasonably be expected to result in a Material Adverse Change, (ii) will
conflict with or violate or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute (alone or with notice or lapse of
time or both) a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the material properties or assets of such Credit Party or
any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which such Credit Party or any of its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which it
may be subject, or (iii) will violate any provision of the certificate of
incorporation or other organizational documents of such Credit Party or any of
its Subsidiaries, any order of any Governmental Authority, or any provision of
any material indenture, agreement or other instrument to which such Credit Party
or any Subsidiary is a party or by which any of them or any of their property is
or may be bound.

     SECTION 4.04 Governmental Approvals. Except for filings and recordings in
connection with the Security Documents (which filings shall be made on or before
the initial Drawdown Date with respect to the Collateral delivered as of the
initial Drawdown Date) and except as have been obtained and are in effect, no
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with or exemption by, any Governmental Authority, or
any subdivision thereof, is required to authorize, or is required in connection
with, (i) the consummation and performance by any Credit Party of any
Transaction Document or (ii) the legality, validity, binding effect or
enforceability of any Transaction Document.

     SECTION 4.05 Financial Statement; Financial Condition; Undisclosed
Liabilities; etc. Except as otherwise disclosed in writing to the Lenders on or
prior to the date hereof, the financial information regarding such Credit Party
and its Subsidiaries for the year ended December 31, 2003 and for the quarter
ended March 31, 2004 are complete and correct, have been prepared in accordance
with GAAP and accurately and fairly present the financial condition

                                       19

of the parties covered thereby as of the respective dates thereof and the
results of the operations thereof for the period or respective periods covered
by such financial statements and since the date of the most recent of such
statements, there has been no Material Adverse Change and there are no
contingent obligations, liabilities for Taxes or other outstanding financial
obligations which are material in the aggregate except as disclosed in such
statements. No written information, exhibit, schedule or report prepared by or
on behalf of such Credit Party and furnished to the Agent or the Lenders by or
at the direction of such Credit Party or any of its Subsidiaries in connection
with the transactions contemplated by this Agreement or any other Transaction
Document, contained any material misstatement of fact or, when such statement is
considered with all other written statements furnished to the Agent or the
Lenders in that connection, omitted to state a material fact or any fact
necessary to make the statement contained herein or therein not misleading;
provided, that, the financial information with respect to Guarantor's
projections, copies of which have been furnished to the Agent and each Lender
prior to the Closing Date or any other relevant date of determination, were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were believed by the Guarantor to be reasonable in all material
respects at the time made. There is no fact known to any Credit Party that could
reasonably be expected to result in a Material Adverse Change that has not been
expressly disclosed to the Agent and the Lenders or to the public generally.

     SECTION 4.06 Litigation. Except as disclosed in Schedule 4.06 hereto, there
is no action, suit, proceeding or investigation (at law or in equity) pending
or, to the best knowledge of each Credit Party, threatened, by or before any
court, administrative agency or other Governmental Authority that might: (i)
adversely affect its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or by which it is bound,
(ii) reasonably be expected to result in any judgment or liability which would
result in a Material Adverse Change or (iii) adversely affect the enforceability
of this Agreement, any Note or any other Transaction Document.

     SECTION 4.07 No Default. No Credit Party is in (alone or with notice or
lapse of time or both) default (in any respect that could reasonably be expected
to result in a Material Adverse Change) under any agreement by which it or its
property is bound or subject, or is in default in respect of any financial
commitment or obligation.

     SECTION 4.08 Use of Proceeds; Margin Regulations.

          (a) The proceeds received with respect to the (i) Initial Loans shall
     be used by each Borrower for the sole purpose of general corporate purposes
     and payment of professional fees and expenses of such Borrower and the
     other Credit Parties and (ii) any Additional Loans shall be used to
     acquire, finance or refinance a Vessel and/or for general corporate
     purposes and payment of professional fees and expenses of such Borrower and
     the other Credit Parties.

          (b) No part of the proceeds of any Loan will be used by any Borrower
     to purchase or carry any Margin Stock or to extend credit to others for the
     purpose of purchasing or carrying any Margin Stock. Neither the making of
     any Loan nor the use of the proceeds thereof will violate or be
     inconsistent with the provisions of Regulation T, U or X of the Board of
     Governors of the Federal Reserve System.

                                       20

     SECTION 4.09 Tax Returns and Payments. Each Borrower and each of its
Subsidiaries has filed or caused to be filed, with the appropriate taxing
authority, all federal, state, provincial and other returns, statements, forms
and reports for Taxes (the "Returns") required to be filed by or with respect to
the income, properties or operations of such Borrower and/or its Subsidiaries
except where the failure to so file or cause to be filed could not reasonably be
expected to result in a Material Adverse Change. The Guarantor, the Borrowers
and their respective Subsidiaries have paid all Taxes payable by them other than
(a) Taxes which are not delinquent and (b) Taxes contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP and (c) Taxes payable to jurisdictions other than the
United States, Panama, the Philippines and the Marshall Islands as to which the
failure to pay such Taxes could not reasonably be expected to result in a
Material Adverse Change.

     SECTION 4.10 Compliance with ERISA.

          (a) Except, in each case, as could not reasonably be expected to
     result in a Material Adverse Change or except as disclosed on Schedule 4.10
     hereto, (i) each Plan (if any) (and each related trust, insurance contract
     or fund) is in compliance in all material respects with its terms and with
     all applicable laws, including without limitation ERISA and the Code; (ii)
     each Plan (if any) (and each related trust, if any) which is intended to be
     qualified under Section 401 (a) of the Code has received a determination
     letter from the Internal Revenue Service to the effect that it is qualified
     and meets the requirements of Sections 401(a) and 501(a) of the Code and
     nothing has occurred since the date of such determination letter that could
     adversely affect the qualification of such Plan (if any); (iii) the most
     recent annual report (Form 5500 Series) with respect to each Plan (if any),
     including Schedule B (Actuarial Information) thereto, copies of which have
     been filed with the Internal Revenue Service, is complete and correct and
     fairly presents the funding status of each such Plan (if any), and since
     the date of such report there has been no Material Adverse Change in such
     funding status; (iv) no Reportable Event has occurred or is reasonably
     likely to occur; (v) no Plan (if any) which is a multiemployer plan (as
     defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization;
     (vi) no Plan (if any) which is subject to Section 412 of the Code or
     Section 302 of ERISA has an accumulated funding deficiency, within the
     meaning of such sections of the Code or ERISA, or has applied for or
     received a waiver of a funding deficiency or an extension of any
     amortization period, within the meaning of Section 412 of the Code or
     Section 303 or 304 of ERISA; (vii) all contributions required to be made
     with respect to a Plan (if any) have been or will be timely made; (viii)
     neither any Borrower nor any Subsidiary of such Borrower nor any ERISA
     Affiliate has committed any violation or incurred any liability (including
     any indirect, contingent or secondary liability) pursuant to Section 406,
     409, 502(i), 502(l), 515 or Title IV of ERISA (other than the payment of
     premiums, none of which are overdue) or Section 401(a)(29), 4971 or 4975 of
     the Code or reasonably expects to incur any such liability under any of the
     foregoing sections; (ix) no condition exists which presents a risk to any
     Borrower or any Subsidiary of such Borrower or any ERISA Affiliate of
     incurring a liability to or on account of a Plan (if any) pursuant to the
     foregoing provisions of ERISA and the Code; (x) no proceedings have been
     instituted to terminate or appoint a trustee to administer any Plan (if
     any) which is subject to Title IV of ERISA; (xi) neither any Borrower, the
     Guarantor nor any ERISA Affiliate has incurred any liability (which remains
     unpaid) under the Worker Adjustment and Retraining

                                       21

     Notification Act (29 U.S.C. Sections 201-2109); (xii) no action, suit,
     proceeding, hearing, audit or investigation with respect to the
     administration, operation or the investment of assets of any Plan (if any)
     (other than routine claims for benefits) is pending, expected or
     threatened; (xiii) none of the Borrowers has received notice that indicates
     the existence of potential withdrawal liability under a Multiemployer Plan
     (if any) (as defined in Section 4001(a)(3) of ERISA); (xiv) each group
     health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
     of the Code) which covers or has covered employees or former employees of
     any Borrower, any Subsidiary of such Borrower, or any ERISA Affiliate has
     at all times been operated in compliance with the provisions of Part 6 of
     subtitle B of Title I of ERISA and Section 4980B of the Code; (xv) no lien
     or security interest encumbrance on the assets of such Borrower or any
     Subsidiary of such Borrower or any ERISA Affiliate that is imposed under
     the Code or ERISA or is likely to arise in connection with any Plan (if
     any); (xvi) no Borrower and its Subsidiaries maintains or contributes to
     any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
     which provides benefits to retired employees or other former employees
     (other than as required by Section 601 of ERISA) or any Plan (if any);
     (xvii) no Plan (if any) has an Unfunded Current Liability in excess of
     $500,000; (xviii) the accumulated post retirement benefit obligation (as
     determined in accordance with Financial Accounting Standard 106 of any
     Borrower, the Guarantor and any ERISA Affiliate, to the extent it could
     subject such Borrower or the Guarantor to liability, shall not as of the
     end of the fiscal year preceding the Closing Date exceed $500,000, and
     there is no other post-termination benefit obligation for which any
     Borrower could reasonably be expected to incur liability or be obligated in
     excess of $500,000, and no Borrower shall take any action not required by
     applicable law that could reasonably be expected to cause such obligation
     to increase above $500,000; (xix) engage in any transaction which would
     cause any obligation, or action taken or to be taken, hereunder (or the
     exercise by the Agent or the Lender of any of its rights under this
     Agreement or the other Loan Documents) to be a non-exempt (under a
     statutory or administrative class exemption) prohibited transaction under
     ERISA or result in a violation of a state statute regulating governmental
     plans that would subject the Agent or Lender to liability for a violation
     of ERISA or such a state statute; and (xx) using actuarial assumptions and
     computation methods consistent with Part 1 of Subtitle E of Title IV of
     ERISA, the aggregate liabilities of the Borrowers, their Subsidiaries, the
     Guarantor and their ERISA Affiliates to all Plans (if any) which are
     multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the
     event of a complete withdrawal therefrom, as of the close of the most
     recent fiscal year of such Plan (if any) ended prior to the date of the
     most recent making of a Loan, would not exceed $500,000.

          (b) Except, in each case, as could not reasonably be expected to
     result in a Material Adverse Change, (i) each Foreign Pension Plan (if any)
     has been maintained in compliance in all material respects with its terms
     and with the requirements of any and all applicable laws, statutes, rules,
     regulations and orders and has been maintained, where required, in good
     standing with applicable regulatory authorities; (ii) all contributions
     required to be made with respect to a Foreign Pension Plan (if any) have
     been timely made; (iii) none of the Guarantor, any Borrower nor any of
     their respective Subsidiaries has incurred any obligation in connection
     with the termination of or withdrawal from any Foreign Pension Plan (if
     any); and (iv) the present value of the accrued benefit liabilities

                                       22

     (whether or not vested) under each Foreign Pension Plan (if any),
     determined as of the end of each Borrower's most recently ended fiscal year
     on the basis of actuarial assumptions, each of which is reasonable, did not
     exceed the current value of the assets of such Foreign Pension Plan (if
     any) allocable to such benefit liabilities.

          (c) As of the Closing Date and throughout the term of the Loan,
     Borrower and Guarantor are not and will not be an "employee benefit plan"
     as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
     and none of the assets of Borrower or Guarantor will constitute "plan
     assets" of one or more such plans for purposes of Title I of ERISA. As of
     the Closing Date and throughout the term of the Loan, Borrower and
     Guarantor are not and will not be a "governmental plan" within the meaning
     of Section 3(3) of ERISA and Borrower and Guarantor will not be subject to
     state statutes regulating investments and fiduciary obligations with
     respect to governmental plans.

     SECTION 4.11 Ownership; Subsidiaries. Schedule 4.11 correctly (a) lists
each of the Guarantor's and each Borrower's direct and indirect Subsidiaries as
of the Closing Date or, pursuant to a supplement to Schedule 4.11, as of the
applicable Drawdown Date and (b) describes the Equity Interests owned by the
Guarantor, Westbrook and each Borrower (directly or indirectly) in each of its
Subsidiaries as of the Closing Date or, pursuant to a supplement to Schedule
4.11, as of the applicable Drawdown Date.

     SECTION 4.12 Compliance with Laws. The Guarantor and each Borrower and each
of its Subsidiaries is in compliance with all applicable statutes, regulations,
rules and laws, and any judgment, writ, injunctions, decrees or order of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its businesses and the ownership of its property, except such
noncompliances as could not (in the event such noncompliance were asserted by
any Person through appropriate action), individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change.

     SECTION 4.13 Investment Company Act; Public Utility Holding Company Act.
Neither the Guarantor nor any Borrower nor any of their respective Subsidiaries
is either (x) an "investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or (y) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.

     SECTION 4.14 Environmental Matters.

          (a) (i) Except as disclosed in Schedule 4.14, the Guarantor and each
     Borrower and each of their respective Subsidiaries have complied with, and
     on the date of each advance of a Loan will be in compliance with, all
     applicable Environmental Laws and the requirements of any permits issued
     under such Environmental Laws; (ii) there are no pending or threatened
     Environmental Claims against the Guarantor or any Borrower or any of their
     respective Subsidiaries or any property owned or operated by the Guarantor,
     any Borrower or any of their respective Subsidiaries having a fair market
     value in excess of One Hundred Fifty Thousand Dollars ($150,000); (iii)
     there are no facts, circumstances, conditions or occurrences with respect
     to the business or operations of a Borrower, the Guarantor or any of their
     respective Subsidiaries, or any property at any

                                       23

     time owned or operated by a Borrower, the Guarantor or any of their
     respective Subsidiaries, that could reasonably be expected to form the
     basis of an Environmental Claim against the Guarantor, any Borrower or any
     of their respective Subsidiaries or any such property in excess of One
     Hundred Fifty Thousand Dollars ($150,000), or to cause any such currently
     owned property to be subject to any restrictions on the ownership,
     occupancy, use or transferability of such property by the Guarantor, a
     Borrower or any of their respective Subsidiaries under any applicable
     Environmental Law.

          (b) (i) Except as disclosed in Schedule 4.14, Hazardous Materials have
     not at any time been generated, used, treated or stored on, or transported
     to or from, any Real Property owned or operated by the Guarantor, a
     Borrower or any of their respective Subsidiaries where such generation,
     use, treatment or storage has violated or could reasonably be expected to
     violate any Environmental Law in such a manner so as to cause this
     representation to be untrue. (ii) Hazardous Materials have not at any time
     been Released on or from any property owned or operated by the Guarantor,
     any Borrower or any of their respective Subsidiaries where such Release has
     violated or could reasonably be expected to violate any applicable
     Environmental Law in such a manner so as to cause this representation to be
     untrue.

     SECTION 4.15 Labor Relations. (a) Except as could not reasonably be
expected to result in a Material Adverse Change, none of the Guarantor or any
Borrower nor any of its Subsidiaries is engaged in any unfair labor practice;
(b) except (in each case) as could not reasonably be expected to result in a
Material Adverse Change, there is (i) no unfair labor practice complaint pending
against the Guarantor or any Borrower or any of its Subsidiaries, or, to the
knowledge of the Guarantor or any Borrower, threatened against any of them,
before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Guarantor or any Borrower or any of its
Subsidiaries or threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Guarantor or any Borrower or any of its
Subsidiaries or threatened against the Guarantor or any Borrower or any of its
Subsidiaries and (iii) no union representation proceeding pending with respect
to the employees of the Guarantor or any Borrower or any of its Subsidiaries;
and (c) except (in each case) as could not reasonably be expected to result in a
Material Adverse Change, hours worked by and payments made to any employee of
any Borrower, the Guarantor or any ERISA Affiliate have not been in violation of
the Fair Labor Standards Act, as amended, or any other applicable law dealing
with such matters.

     SECTION 4.16 Patents, Licenses, Franchises and Formulas. The Guarantor and
each Borrower and each of its Subsidiaries owns or is licensed to use all
material patents, trademarks, permits, service marks, trade names, copyrights,
licenses, franchises and formulas, or rights with respect to the foregoing, and
has obtained assignments of all material leases and other rights of whatever
nature, reasonably necessary for the present conduct of its business and
operations, without any known conflict with the rights of others which, or the
failure to obtain or so own which, as the case may be, has had, or could
reasonably be expected to result in, a Material Adverse Change.

     SECTION 4.17 Security Interests. Immediately prior to each Loan hereunder,
the relevant Credit Party shall have good and marketable title to its respective
Vessel, free and clear of any

                                       24

Lien (other than Permitted Encumbrances). On the applicable Loan Date, each
Vessel that is to be pledged to the Agent under a Mortgage is, or shall be at
the time of such pledge, an Eligible Vessel. On and after the Closing Date and
each Drawdown Date, each of the Security Documents creates (or after the
execution and delivery thereof, will create), as security for the Obligations
purported to be secured thereby, a valid and enforceable security interest in
and Lien on all of the Collateral subject thereto, which security interest shall
be perfected upon the taking of possession thereof, completion of filings with
respect thereto or such other method of perfection as permitted by applicable
law, in each case as required by this Agreement or the other Transaction
Documents, superior to and prior to the rights of all third Persons and subject
to no other Liens (except for Permitted Encumbrances with respect to the
Vessels. No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made on or before the related Drawdown Date.

     SECTION 4.18 Indebtedness. Schedule 4.18 sets forth a true and complete
list of all (i) Indebtedness for borrowed money of the Guarantor and each
Borrower and each of their respective Subsidiaries that is outstanding as of the
Closing Date, or pursuant to a supplement to Schedule 4.18, as of the applicable
Drawdown Date and (ii) agreements existing on the Closing Date, or pursuant to a
supplement to Schedule 4.18, as of the applicable Drawdown Date pursuant to
which the Guarantor and each Borrower or any of their respective Subsidiaries
are entitled to incur Indebtedness, in each case showing the aggregate principal
amount thereof, the name of the borrower thereunder and any other entity which
directly or indirectly guaranteed or is a co-obligor of such debt.

     SECTION 4.19 Solvency. The Guarantor, Technotrade, Westbrook and each
Borrower, at the time of and after giving effect to each Loan hereunder, is
Solvent on and as of the date thereof. Neither as a result of the transactions
contemplated by this Agreement or the other Transaction Documents nor otherwise
does any such Credit Party believe that it will incur debts beyond its ability
to pay or which would be prohibited by its charter documents or by-laws. The
assets and cash flow of the Guarantor and each Borrower enable it to meet its
present obligations in the ordinary course of business as they become due. The
transactions contemplated by this Agreement and the other Transaction Documents
are being consummated by the Credit Parties in good faith and in furtherance of
their ordinary business purposes and constitute a practical and reasonable
course of action by them designed to improve their financial position, with no
contemplation of insolvency and with no intent to hinder, delay or defraud any
present or future creditors.

     SECTION 4.20 Concerning the Vessels. The name, official number, registered
owner, classification and jurisdiction of registration of each Vessel is set
forth on Schedule 4.20 hereto. Each Vessel is operated in material compliance
with all applicable maritime rules and regulations, including, without
limitation, with respect to each Vessel operated in the coastwise trade of the
United States, the Shipping Act of 1916, as amended and in effect, and the
regulations promulgated thereunder. Each Vessel is maintained and operated in
material compliance with all applicable Environmental Laws. Each Vessel is
operationally seaworthy and in every way fit for its intended service. No Vessel
has suffered a Total Loss. Each Vessel conforms to the description thereof set
forth on Schedule I to the related Mortgage.

                                       25

     SECTION 4.21 Citizenship. Each Borrower owns or is qualified to own its
Vessel under the laws of an Approved Jurisdiction. Each Borrower, Viking,
Overseas Bulk and each other Person which may operate one or more of the Vessels
is qualified to operate such Vessels under the laws of an Approved Jurisdiction
and each other jurisdiction where any such Vessel may be operated.

     SECTION 4.22 Vessel Classification. Each Vessel is classified in the
highest classification and rating for vessels of the same age and type with the
respective classification society set forth in Schedule 4.20, without, except as
set forth in Schedule 4.22, any conditions or recommendations affecting class.

     SECTION 4.23 No Material Adverse Change. There has been no event giving
rise to a Material Adverse Change in the business, assets, operations or
financial condition of any of the Credit Parties or any of their Subsidiaries
(taken as a whole) since March 31, 2004.

     SECTION 4.24 Insurance. Each of the Credit Parties has insured its
properties and assets as set forth in the Mortgage. Each such insurance policy
is in full force and effect and covers all of the Vessels owned by the Credit
Parties. All premiums in respect of such insurance policies have been paid. Each
of the Agent and the Lenders is named as additional insureds on such insurance
policies. Each charter of a Vessel requires the lessee or sublessee thereunder
to either maintain insurance covering damage to, destruction or theft of the
Vessel subject thereto in an amount at least equal to the Insured Value
therefor.

     SECTION 4.25 Principal Place of Business and Chief Executive Office. The
principal place of business and chief executive office of Credit Party is
located at the address set forth in Schedule 4.25 hereof, and has been located
in the same state for at least four months prior to the date of execution and
delivery of this Agreement.

     SECTION 4.26 Legal Name. The legal name of each Credit Party is as set
forth in this Agreement and no Credit Party has changed its name in the last six
years and does not have any trade names, fictitious names, assumed names or
"doing business as" names.

     SECTION 4.27 Representations and Warranties True and Correct. Each of the
representations and warranties made by each Credit Party under each of the other
Transaction Documents to which it is a party or by which it is bound is true and
correct in all material respects when and as made or remade. All representations
and warranties made by each Credit Party in any certificate or other document
delivered at the closing of the transactions contemplated by the applicable
Transaction Document are true and correct in all material respects.

                                   ARTICLE V
                              CONDITIONS OF LENDING

     SECTION 5.01 Conditions Precedent to Drawdown of any Loan. The obligation
of the Lenders to make a Loan available to the Borrowers under this Agreement
shall be expressly subject to the following conditions precedent:

                                       26

          (a) The Agent shall have received the following documents in form and
     substance satisfactory to the Agent and its legal advisor:

               (i)  copies, certified as true and complete by an officer of each
                    Credit Party, of the resolutions of such Credit Party
                    evidencing approval of this Agreement, the Notes and the
                    other Transaction Documents to which it is a party and
                    authorizing an appropriate officer or officers or
                    attorney-in-fact or attorneys-in-fact to execute the same on
                    its behalf, or other evidence of such approvals and
                    authorizations;

               (ii) copies, certified as true and complete by an officer of each
                    Credit Party, of all documents evidencing any other
                    necessary action (including actions by such parties thereto
                    other than the Credit Parties as may be required by the
                    Agent), approvals or consents with respect to the
                    Transaction Documents;

               (iii) copies, certified as true and complete by an officer of
                    each Credit Party, of the certificate of incorporation and
                    bylaws or the certificate of formation and operating
                    agreement (or equivalent instruments) thereof;

               (iv) certificate of the Secretary of the Guarantor certifying
                    that it legally and beneficially owns, directly all of the
                    issued and outstanding Equity Interests of Technotrade, that
                    Technotrade legally and beneficially owns, directly all of
                    the issued and outstanding Equity Interests of Westbrook and
                    that Westbrook legally and beneficially owns directly all of
                    the issued and outstanding Equity Interests of each of the
                    Borrowers, and that such Equity Interests are free and clear
                    of any liens, claims, pledges or other encumbrances
                    whatsoever;

               (v)  certificate of the Secretary of each Borrower, certifying as
                    to the record ownership of all of its issued and outstanding
                    Equity Interests;

               (vi) certificates of the jurisdiction of formation of each Credit
                    Party as to the good standing thereof;

               (vii) license from the United States Department of Commerce
                    Bureau of Industry and Security permitting TBS North America
                    Liner, Ltd. to locate, operate and/or use (directly or
                    indirectly) in Cuba any Vessel; and

               (viii) each pooling agreement to which the Borrower is a party or
                    a Vessel is subject, and each management agreement or
                    technical agreement between the Guarantor and another Person
                    that affects or relates to, or may affect or relate to, any
                    of the Vessels, and each

                                       27

                    charter between PacRim and another Person that affects or
                    relates to, or may affect or relate to, any of the Vessels.

          (b) The Agent shall have received evidence satisfactory to the Agent
     and its legal advisor that:

               (i)  the Vessels (except as disclosed in schedule 4.20) are in
                    the sole and absolute ownership of the relevant Borrower as
                    set forth in Schedule 4.20 and duly registered in such
                    Borrower's name under the flag of an Approved Jurisdiction,
                    unencumbered, save and except for the Mortgage recorded
                    against it and Permitted Encumbrances;

               (ii) the Mortgage on each Vessel has been properly filed and
                    recorded under the laws of Panama and constitutes a first
                    priority naval preferred ship mortgage effective against
                    third parties, subject only to Permitted Encumbrances, the
                    Filipino Bareboat Charters have been properly recorded under
                    the laws of the Philippines and each Approved Jurisdiction
                    has consented to the dual-flagging of each Vessel in the
                    Philippines;

               (iii) except as otherwise disclosed to the Agent in writing, the
                    Vessels are classed in the highest classification and rating
                    for vessels of the same age and type with the respective
                    classification society as set forth in Schedule 4.20 without
                    any outstanding conditions or recommendations affecting
                    class except as set forth in Schedule 4.22;

               (iv) each Person that may have a Lien on the Vessels has
                    subordinated its Lien to the Lien of the Agent;

               (v)  all necessary governmental or regulatory approvals, licenses
                    and authorities which are necessary to the operation of each
                    Vessel have been obtained from each applicable Governmental
                    Authority;

               (vi) each Vessel is insured in accordance with the provisions of
                    the related Mortgage and the requirements thereof in respect
                    of such insurances have been complied with;

               (vii) with respect to the Tuckahoe and each Additional Loan made
                    in respect of a Vessel, evidence of the actual purchase
                    price of each Vessel;

               (viii) an appraisal (which shall not be a desktop appraisal) of
                    each Vessel, by a marine surveyor designated by the Agent,
                    as to the Fair Market Value of each vessel as of a date not
                    more than ninety days prior to such Drawdown Date;

                                       28

               (ix) (1) with respect to the Tuckahoe, a legal, valid, binding
                    and enforceable Filipino Bareboat Charter between Henley and
                    Viking, Memorandum of Three Party Agreement by and among
                    Viking, Henley and PacRim and an assignment of such Filipino
                    Bareboat Charter, such Memorandum of Three Party Agreement
                    and any other charter in respect of the Tuckahoe, (2) with
                    respect to the Mohegan, a legal, valid, binding and
                    enforceable Filipino Bareboat Charter between Vernon and
                    Overseas Bulk, Memorandum of Three Party Agreement by and
                    among Overseas Bulk, Vernon and PacRim and an assignment of
                    such Filipino Bareboat Charter, such Memorandum of Three
                    Party Agreement and any other charter in respect of the
                    Mohegan, and (3) with respect to the Tayrona, a legal,
                    valid, binding and enforceable Filipino Bareboat Charter
                    between Arden and Overseas Bulk, Memorandum of Three Party
                    Agreement by and among Overseas Bulk, Arden and PacRim and
                    an assignment of such Filipino Bareboat Charter, such
                    Memorandum of Three Party Agreement and any other charter in
                    respect of the Tayrona;

               (x)  an acknowledged Notice (as defined in the Assignment of
                    Earnings and Insurances) from Viking and Overseas Bulk;

               (xi) a Safety Management Certificate and Document of Compliance
                    pursuant to Section 6.20(b);

               (xii) with respect to each Vessel, a certified copy of the
                    legalized or apostilled Bill of Sale and Acceptance therefor
                    and the Provisional Patente therefor.

          (c) Each Borrower shall have duly executed and delivered this
     Agreement, the Notes and the other Transaction Documents to which it is a
     Party; the Guarantor shall have duly executed and delivered this Agreement,
     the Security Documents and the other Transaction Documents to which it is a
     party; Westbrook will have executed the Pledge Agreement and each other
     Transaction Document to which it is a party; and the Liners, PacRim,
     Transworld Cargo Carriers S.A., TBS Shipping Services Inc. and Roymar Ship
     Management, Inc. shall have executed and delivered the Assignment of
     Earnings and Insurances.

          (d) Westbrook shall have delivered certificates representing the
     Equity Interests subject to the Pledge Agreement to the Agent, together
     with executed and undated stock powers with respect thereto, and all other
     documents required to be delivered pursuant to the Pledge Agreement.

          (e) The Borrowers shall each have duly executed and delivered the
     following documents:

               (i)  the Mortgage with respect to its Vessel(s);

                                       29

               (ii) an Assignment of Earnings and Insurances with respect to its
                    Vessel(s);

               (iii) Uniform Commercial Code Financing Statements for filing
                    with the appropriate jurisdictions necessary to perfect the
                    security interest of the Agent for the benefit of the
                    Lenders in and to its Collateral; and

               (iv) such other documents as may be required to perfect the
                    security interest of the Agent, on behalf of the Lenders, in
                    the Collateral in such jurisdictions as may be appropriate.

          (f) The Agent shall have received a certificate from the President of
     each Credit Party (or, pursuant to evidence of authority in form and
     substance satisfactory to the Agent, the Chief Financial Officer of TBS
     Shipping Services Inc.) to the effect that such Credit Party is in
     compliance with the conditions precedent set forth in this Article V, that
     the representations and warranties of such Credit Party are true and
     correct in all material respects on and as of the date of such Loan as
     though made on and as of such date (except in the case of any
     representation or warranty that expressly speaks as to an earlier date), no
     event has occurred or will occur as a result of the making of such Loan
     that constitutes or will constitute a Default or an Event of Default and
     the aggregate principal amount of all outstanding Loans (after giving
     effect to the making of such Loan) will not exceed the Aggregate Loan
     Commitment.

          (g) The Agent shall have received evidence that no Credit Party or any
     of its Subsidiaries is subject to any Environmental Claim which could
     reasonably be expected to result in a Material Adverse Change.

          (h) The Agent shall have received payment in full of all fees and
     expenses due on or before the Closing Date to the Agents and the Lenders,
     or such fees and expenses shall be paid directly from the Initial Loan
     proceeds on the Closing Date.

          (i) The Agent shall have received evidence satisfactory to the Agent
     and to its legal advisor that, save for the liens created by the Mortgages
     and the Assignments of Earnings and Insurances, there are no liens, charges
     or encumbrances of any kind whatsoever on any of the Vessels or on their
     respective earnings except for Permitted Encumbrances and, with respect to
     the other Collateral, there are no liens, charges or encumbrances of any
     kind whatsoever.

          (j) The Agent and the Lenders shall have received the favorable
     written opinions of New York counsel and Bermuda counsel to the Borrowers,
     Westbrook and the Guarantor dated the Closing Date and in form and
     substance satisfactory to the Agent and its legal advisors regarding
     certain corporate maters, enforceability, perfection and priority of
     security interests, and other matters as are customary for transactions to
     those described in the Transaction Documents.

          (k) The Agent and the Lenders shall have received a favorable written
     opinion of Panamanian counsel to the Borrowers, dated the Closing Date and
     in form and

                                       30

     substance satisfactory to the Agent and its legal advisors regarding
     perfection and priority of the mortgage and security interest of the Agent
     in the Vessels and certain corporate maters and enforceability of those
     Transaction Documents governed by the laws of Panama.

          (l) The Borrowers shall have successfully acquired and possess good
     and marketable title to the Vessels (subject to Permitted Encumbrances).

          (m) There shall have occurred no event that could result in a Material
     Adverse Change, or prospect of material change in any Credit Party's
     structure, ownership, financial condition or operating trends since the
     Closing Date.

          (n) The Agent shall have received any additional opinions, documents,
     affidavits or certificates of one or more of the Borrowers, Westbrook, the
     Guarantor or any other Person as it may reasonably require.

     SECTION 5.02 Further Conditions Precedent. The obligation of the Lenders to
make any Loan available to the Borrowers under this Agreement shall be expressly
and separately subject to the following further conditions precedent on the
relevant Drawdown Date:

          (a) The Agent shall have received a Drawdown Request in accordance
     with the terms of Section 2.01 or Section 2.02, as the case may be.

          (b) The representations and warranties set forth in Article IV hereof
     shall be true and correct in all material respects with the same effect as
     though each such representation and warranty had been made on and as of
     such date, except to the extent that any of such representations and
     warranties expressly relate to earlier dates, or are no longer true as a
     result of transactions not prohibited by the Transaction Documents.

          (c) No Default or Event of Default shall have occurred and be
     continuing.

          (d) No change in any applicable laws, regulations, rules or in the
     interpretation thereof shall have occurred which make it unlawful for any
     Credit Party to make any payment as required under the terms of the
     Transaction Documents.

                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS

     Each Credit Party covenants and agrees that, so long as this Agreement
shall remain in effect or any of the Obligations shall be outstanding, it shall,
and the Guarantor shall cause Technotrade to cause Westbrook and each of the
Borrowers to unless the Guarantor shall have received the prior written consent
of the Requisite Lenders:

     SECTION 6.01 Existence. (a) Do or cause to be done all things necessary to
preserve and keep in full force and effect its existence (except as permitted by
Section 7.16), rights and franchises as a company under the laws of its place of
organization, (b) do or cause to be done all things necessary to preserve and
keep in full force and effect all of its licenses, permits and governmental
approvals necessary for the normal conduct of its business, (c) comply with all

                                       31

laws applicable to it and at all times be qualified to do business in the
jurisdictions where failure to qualify could reasonably be expected to result in
a Material Adverse Change or is necessary to protect the validity and
enforceability of the rights of the Agent and the Lenders under the Transaction
Documents, and (d) comply with the provisions of its organizational documents
and all applicable laws except to the extent that the failure to comply with
such applicable laws would not result in a Material Adverse Change.

     SECTION 6.02 Payment of Debts. Duly and punctually pay the interest on and
principal of the Loans in accordance with this Agreement. Pay its debts,
liabilities and obligations when due, except (a) other than the Obligations, any
such debts, liabilities and obligations that are being contested in good faith
by appropriate proceedings, (b) other than the Obligations, any single debt,
liability or obligation, which does not exceed $1,000,000 and (c) other than the
Obligations, any debts, liabilities and obligations, which in the aggregate do
not exceed $1,000,000.

     SECTION 6.03 Accounts and Records. Keep and maintain full and accurate
accounts and records in accordance with GAAP consistently applied.

     SECTION 6.04 Payment of Taxes and Claims. Prepare and timely file all tax
returns required to be filed by it and pay and discharge all Taxes and other
governmental claims imposed upon it or in respect of any of its property and
assets before the same shall become in default, as well as all lawful claims
(including, without limitation, claims for labor, materials and supplies) which,
if unpaid, might become a lien or charge upon the Collateral or any part
thereof, except (a) in each case, for any such Taxes as are being contested in
good faith by appropriate proceedings or (b) with respect to foreign Taxes, the
failure of which to pay or discharge could not reasonably be expected to result
in a Material Adverse Change. The Credit Parties shall notify the Agent of any
material challenge, contest or proceeding pending by or against any of them.

     SECTION 6.05 Financing Statements. In the case of the Collateral, execute,
financing statements or other documents deemed necessary or desirable by the
Agent to create, attach and/ or perfect, maintain or preserve the creation,
attachment and/or priority of, any mortgage lien or other security interest
granted (or purported to be granted) pursuant to the Transaction Documents and
pay the filing costs thereof. Without limiting the generality of the foregoing,
each of the Credit Parties will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be reasonably necessary or desirable, or that the Agent may reasonably request,
to protect and preserve the Liens granted or purported to be granted hereby and
by the other Transaction Documents and/or to enable the Agent to exercise and
enforce its rights and remedies hereunder or under the other Transaction
Documents with respect to any of the Collateral. Each of the Credit Parties
hereby authorizes the Agent to file, and hereby ratifies any filing made prior
to the Closing Date of, one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of such Credit Party, where permitted by law.

     SECTION 6.06 Compliance with Law. Comply in all material respects with all
applicable federal, state, local and foreign laws, ordinances, rules, orders and
regulations now in force or hereafter enacted, including, without limitation all
laws and regulations relating to environmental

                                       32

laws and employee benefit plans, failure to comply with which could reasonably
be expected to result in a Material Adverse Change.

     SECTION 6.07 Financial Statements and Reports. Furnish to the Agent the
following financial statements and reports:

          (a) as soon as available but not later than ninety (90) days after the
     end of each fiscal year of the Guarantor and the Borrowers, complete copies
     of the consolidated financial reports of the Guarantor and consolidating
     financial statements (which are not audited financial reports) of each
     Borrower, all in reasonable detail, which shall include at least the
     consolidated balance sheet of the Guarantor, each Borrower and their
     respective Subsidiaries as of the end of such year and the related
     consolidated statements of income and sources and uses of funds for such
     year, which shall be audited reports prepared by independent chartered
     accountants of international standing;

          (b) on the second Business Day prior to each Payment Date, deliver to
     the Agent and the Lenders a monthly report certified by the Chief Financial
     Officer of TBS Shipping Services Inc., in the form of Exhibit D hereto,
     certifying compliance with the covenants set forth in Section 6.14 and
     Section 6.16 and showing the calculations thereof in reasonable detail;

          (c) as soon as available but not less than forty-five (45) days after
     the end of each of the first three quarters of each fiscal year of the
     Guarantor and each Borrower, a quarterly interim consolidated balance sheet
     of the Guarantor and consolidating balance sheet of each Borrower and the
     related consolidated profit and loss statements and sources and uses of
     funds, all in reasonable detail, unaudited, but certified to be true and
     complete by the chief financial officer of the Guarantor or such Borrower
     (as the case may be);

          (d) at such time as it may be required to file the following, within
     ten (10) days of the filing thereof, copies of all registration statements
     and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and other
     material filings which the Guarantor and/or a Borrower shall have filed
     with the SEC or any similar governmental authority; and

          (e) promptly upon the delivery thereof to the equityholders of a
     Credit Party, copies of all financial statements, reports, proxy
     statements, notices and other communications transmitted to all of such
     equityholders;

          (f) at such time as the financial statements described in Sections
     6.07(a) and 6.07(c) are delivered, a certificate of the Chief Financial
     Officer of TBS Shipping Services Inc. (i) certifying such Credit Party's
     compliance with each of its covenants contained herein and showing the
     calculations thereof (with respect to the covenants in Sections 6.14 and
     6.16 hereof and, only with delivery of the financial statements described
     in Section 6.07(a), 6.17 hereof) in reasonable detail and (ii) stating that
     the financial statements delivered in accordance with Sections 6.07(a) and
     6.07(c) are complete and correct in all material respects and present
     fairly the financial condition and results of operations of such Credit
     Party and its Subsidiaries as of the dates and for the

                                       33

     periods indicated, in accordance with GAAP (subject as to interim
     statements to normal year-end adjustments and that the delivery of
     "consolidating financial statements" is not GAAP);

          (g) any other information regarding the Guarantor and/or a Borrower
     that is material to the Transaction Documents or the Loans as any Lender,
     through the Agent, may reasonably request; and

          (h) a copy of each survey or inspection report issued by an Approved
     Jurisdiction promptly after issuance thereof.

     Upon its receipt, the Agent shall promptly deliver the above referenced
financial statements and other information to the Lenders.

     SECTION 6.08 Access to Books and Records. Permit the Agent and each Lender,
(including, for greater certainty, their respective duly authorized agents and
officers), during normal business hours and upon reasonable notice, to (a)
examine the accounts and books and records of each Credit Party and to make
copies and extracts therefrom, and (b) discuss the affairs, finances, books and
records and accounts of each Credit Party, and be advised as to the same by, the
officers of each Credit Party as shall be relevant to the performance or
observance of the terms, covenants or conditions of this Agreement, the other
Transaction Documents or the financial condition of each Credit Party. The
Credit Parties, jointly and severally, agree to reimburse the Agent and each
Lender (including their authorized agents and officers) for all reasonable
costs, fees and expenses incurred in connection with any such inspection.

     SECTION 6.09 Notifications. Give prompt written notice to the Agent of (a)
any Default of which each Borrower has actual knowledge or an Event of Default
specifying the same and the steps being taken to remedy the same, (b) any
litigation or governmental proceeding pending or, to the best knowledge of a
Borrower or the Guarantor, threatened against a Borrower or the Guarantor or
against any of their respective Subsidiaries which could reasonably be expected
to result in a Material Adverse Change, (c) the withdrawal of any Vessel's
rating by its classification society or the issuance by such classification
society of any material recommendation or notation affecting class, (d) any
change in the address or location in the chief executive office or principal
place of business of a Borrower or the Guarantor and (e) any other event or
condition which could reasonably be expected to result in a Material Adverse
Change.

     SECTION 6.10 Performance of Obligations. Not take, or fail to take, any
action, or fail to use commercially reasonable efforts to prevent any action to
be taken by others, (a) which would release any Person from any of such Person's
covenants or obligations under any agreement or instrument included in the
Security Documents, or (b) which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such agreement or instrument in a manner materially
adverse to the Agent or the Lenders.

     SECTION 6.11 Environmental Matters. Promptly, and in any event within five
(5) Business Days after an officer of a Credit Party or any of its Subsidiaries
obtains actual knowledge thereof, give written notice to the Agent of one or
more of the following environmental matters, unless, in each case, such
environmental matters could not, individually

                                       34

or when aggregated with all other such environmental matters, be reasonably
expected to result in a Material Adverse Change:

          (a) any pending or threatened in writing Environmental Claim against
     the Guarantor, a Borrower or any of their respective Subsidiaries or any
     Vessel or Real Property owned or operated by the Guarantor, a Borrower or
     any of their respective Subsidiaries;

          (b) any condition or occurrence on or arising from any Vessel or Real
     Property owned or operated by the Guarantor, a Borrower or any of their
     respective Subsidiaries that (i) results in noncompliance by the Guarantor,
     a Borrower or any of their respective Subsidiaries with any applicable
     Environmental Law or (ii) could reasonably be expected to form the basis of
     an Environmental Claim against the Guarantor, a Borrower or any of their
     respective Subsidiaries or any such Vessel or Real Property;

          (c) any condition or occurrence on any Vessel or Real Property owned
     or operated by the Guarantor, a Borrower or any of their respective
     Subsidiaries that could reasonably be expected to cause such Vessel or Real
     Property to be subject to any restrictions on the ownership, occupancy, use
     or transferability by the Guarantor, a Borrower or any of their respective
     Subsidiaries of such Vessel or Real Property under any Environmental Law;
     and

          (d) the taking of any removal or remedial action in response to the
     actual or alleged presence of any Hazardous Material on any Vessel or Real
     Property owned or operated by the Guarantor, a Borrower or any of their
     respective Subsidiaries as required by any Environmental Law or any
     governmental or other administrative agency, provided that in any event the
     Guarantor and each Borrower shall deliver to each Lender all material
     notices received after the date hereof by any of them or any of their
     respective Subsidiaries from any Governmental Authority under, or pursuant
     to, CERCLA.

          (e) All such notices shall describe in reasonable detail the nature of
     the claim, investigation, condition, occurrence or removal or remedial
     action and each Borrower or such Subsidiary's response thereto. In
     addition, upon the request of the Agent, each Credit Party will provide the
     Lenders with copies of all material communications with any Governmental
     Authority relating to Environmental Laws, all material communications with
     any Person (other than their attorneys) relating to any Environmental Claim
     of which notice is required to be given pursuant to this Section 6.11, and
     such detailed reports of any such Environmental Claim as may reasonably be
     requested by the Agent on behalf of the Lenders.

     SECTION 6.12 Transaction Document Obligations. Pay the Notes according to
the reading, tenor and effect thereof, and do and perform every act and
discharge all of the obligations provided to be performed by each Borrower under
the Transaction Documents, including this Agreement, at the time or times and in
the manner specified, and cause the Borrowers to take such action with respect
to their obligations to be performed and discharged under the Transaction
Documents to which they respectively are parties.

                                       35

     SECTION 6.13 ERISA. Promptly upon learning of the occurrence or the
expected occurrence of (i) any material liability of any Credit Party or any
ERISA Affiliate pursuant to ERISA in connection with the termination of any Plan
(if any) or withdrawal or partial withdrawal of any multi-employer plan (as
defined in ERISA), (ii) a failure to satisfy the minimum funding standards of
Section 412 of the Code or Part 3 of Title I of ERISA by any Plan (if any) for
which any Credit Party or any ERISA Affiliate is plan administrator (as defined
in ERISA) other than to the extent such failure could not reasonably be expected
to result in a Material Adverse Change, (iii) a plant closing or mass layoff (as
defined in the Worker Adjustment and Retraining Notification Act) of any
Borrower, the Guarantor or any ERISA Affiliate; (iv) any Borrower, the Guarantor
or any ERISA Affiliate becoming liable for material increases in retiree
medical, life insurance or other death benefits (contingent or otherwise) (other
than as a result of a continuation of medical coverage required under section
4980B of the Code or the insurance coverage continuation provisions of
applicable state law); or (v) a failure to satisfy the conditions represented,
warranted and agreed to in Section 4.10 of this Agreement other than to the
extent such failure could not reasonably be expected to result in a Material
Adverse Change, furnish or cause to be furnished to the Agent written notice
thereof. Within ten (10) days of sending or receipt by Borrower, copies of all
filings or correspondence with the Internal Revenue Service, Pension Benefit
Guaranty Corporation ("PBGC"), Department of Labor, Employee Benefit Plan (if
any), Multiemployer Plan (if any) or union, regarding any Plan (if any), or
regarding or disclosing any liability or potential liability or violation of law
under any such employee benefit plan or any notice from the Department of Labor
or Internal Revenue Service of assessment or investigation regarding a
prohibited transaction under Section 4975 of the Code or Section 406 of ERISA,
notice from the Internal Revenue Service of imposition of excise tax with
respect to an Employee Benefit Plan (if any), or any Form 5500 filed by any
Borrower with respect to an Employee Benefit Plan (if any) which includes a
qualified accountant's opinion. Borrower further covenants and agrees to deliver
to the Administrative Agent such certifications or other evidence from time to
time throughout the term of the Loan, as reasonably requested by the
Administrative Agent or the Lender in its sole discretion, that (i) neither
Borrower nor Guarantor are an "employee benefit plan" as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a "governmental plan" within
the meaning of Section 3(3) of ERISA; (ii) neither Borrower nor Guarantor are
subject to state statutes applicable to Borrower regulating investments and
fiduciary obligations of Borrower with respect to governmental plans; and (iii)
at least one of the following circumstances is true with respect to each of
Borrower and Guarantor:

               (i)  Equity interests in Borrower or Guarantor are publicly
                    offered securities, within the meaning of 29 C.F.R. Section
                    2510.3-101(b)(2);

               (ii) Less than 25 percent of each outstanding class of equity
                    interests in Borrower or Guarantor are held by "benefit plan
                    investors" within the meaning of 29 C.F.R. Section
                    2510.3-101(f)(2); or

               (iii) Borrower or Guarantor qualifies as an "operating company"
                    or a "real estate operating company" within the meaning of
                    29 C.F.R. Section 2510.3-101(c) or (e) or an investment
                    company registered under The Investment Company Act of 1940.

                                       36

     SECTION 6.14 Fixed Charge Coverage Ratio. With respect to the Guarantor,
maintain a Fixed Charge Coverage Ratio (on a consolidated trailing twelve month
basis), as of any date of determination, of not less than 2.00 to 1.00.

     SECTION 6.15 Obligations of Westbrook. With respect to the Guarantor, as
the sole equityholder of Technotrade, cause Technotrade to cause Westbrook to
perform and comply with all duties, obligations and covenants set forth herein
and in the Pledge Agreement.

     SECTION 6.16 Total Funded Debt Ratio. With respect to the Guarantor,
maintain a Total Funded Debt Ratio, determined as of the last day of each of the
Guarantor's fiscal quarters commencing June 30, 2004, of not more than 3.00 to
1.00.

     SECTION 6.17 Minimum Fair Market Value of the Vessels. Maintain an Asset
Coverage Ratio at all times less than 0.85 to 1.00. If the Asset Coverage Ratio
is equal to or more than 0.85 to 1.00, then the Borrower, in order to cause the
Asset Coverage Ratio to be equal to or less than 0.70 to 1.00, shall, within
five (5) Business Days of such failure (x) pledge additional collateral
acceptable to the Agent and the Lenders (as determined in their sole discretion)
and/or (y) pay that much of the principal balance of all outstanding Advances in
order to cause compliance with this Section 6.17; provided that the amount of
any payment made pursuant to this Section 6.17 shall not require payment of the
related Make-Whole Amount for the principal amount of any Advances prepaid to an
Asset Coverage Ratio of 0.70 to 1.00 (for greater certainty, the Borrowers shall
pay the Make-Whole Amount in respect of any payment of principal of the Advances
resulting in an Asset Coverage Ratio of less than 0.70 to 1.00). Together with
delivery of the financial statements described in Section 6.07(a), each Borrower
shall deliver a certification certifying, based on its reasonable business
judgment and compared to Vessels of like character and quality (assuming
compliance with the maintenance obligations set forth herein and in each charter
of a Vessel), its compliance with this Section 6.17.

     SECTION 6.18 Ownership of Borrowers. With respect to the Guarantor, own
directly all of the Equity Interests of Technotrade, cause Technotrade to own
directly all of the Equity Interests of Westbrook and cause Technotrade to cause
Westbrook to own directly all of the Equity Interests of each Borrower. As the
indirect equity holder of each other Credit Party, the Guarantor will keep (or
cause to be kept) in full force and effect each other Credit Party's existence,
rights and franchises as a corporation under the laws of its jurisdiction of
organization and will preserve (or cause to preserve) its and their
qualification to do business as a foreign company in each jurisdiction in which
such qualification is necessary to permit performance of the duties of the
Credit Parties under this Agreement and each other Transaction Document.

     SECTION 6.19 Delivery of Charters. Promptly deliver (or cause to be
delivered) each charter with respect to any of the Vessels either (x) between a
Credit Party, PacRim, TBS Shipping Services Inc., Roymar Ship Management, Inc.
or any of their respective Affiliates or (y) having a term of at least six (6)
months (including any renewal options) and entered into between a Credit Party
or any of its Affiliates and another Person, between PacRim or any of its
Affiliates and another Person, between Roymar Ship Management, Inc. or any of
its Affiliates and another Person or between TBS Shipping Services Inc. or any
of its Affiliates and another Person. The Credit Parties shall deliver (or cause
to be delivered) an assignment of charter (in form and substance satisfactory to
the Agent) with respect to each charter of a Vessel between,

                                       37

on the one hand, a Credit Party, PacRim, TBS Shipping Services Inc., Roymar Ship
Management, Inc. or any of their respective Affiliates and, on the other hand,
any other Person.

     SECTION 6.20 Vessel Operations and Management.

          (a) Procure that each of the Vessels, shall at all times be (i)
     managed by the technical and commercial managers managing the Vessels as of
     the Closing Date or the applicable Drawdown Date (as the case may be), or
     such other managers acceptable to the Requisite Lenders in accordance with
     vessel management agreements acceptable to the Requisite Lenders, (ii)
     flagged under the laws of the Approved Jurisdictions and (iii) classed in
     the highest classification and rating for vessels of the same age and type
     without any outstanding conditions or recommendations affecting class
     (other than those for which the time prescribed for curing the condition or
     recommendation has not passed) with Lloyds Registry of Shipping, Det Norske
     Veritas, Bureau Veritas, American Bureau of Shipping, Nippon Kaiji Kyokai
     or such other classification society classing the Vessels as of the Closing
     Date or the applicable Drawdown Date (as the case may be), or with such
     other classification society acceptable to the Agent and permitted under
     the Approved Jurisdiction where the Mortgage is filed; provided, however,
     if a Vessel is reflagged under the laws of an Approved Jurisdiction, it
     shall be a condition to such reflagging that the Guarantor and the
     Borrowers deliver to the Agent (A) evidence (including an opinion of
     counsel, in form and substance satisfactory to the Agent) that such Vessel
     has been registered in the name of the related Borrower under the laws of
     such jurisdiction; (B) evidence (including an opinion of counsel, in form
     and substance satisfactory to the Agent) that the related Mortgage has been
     properly recorded under the laws of such jurisdiction and constitutes a
     first priority mortgage subject only to Permitted Encumbrances; (C)
     evidence that all necessary governmental or regulatory approvals, licenses
     and authorities which are necessary to the operation of the Vessel have
     been obtained; (D) evidence that insurances in compliance with the
     requirements of the Mortgage have been obtained; and (E) such other items
     as the Agent may reasonably require.

          (b) Comply in all material respects or to procure that the operator of
     each of the Vessels will comply in all material respects within the
     requisite applicable time limits for vessels of the same type, size, age
     and flag of the Vessels with the International Management Code for the Safe
     Operation of Ships and for Pollution Prevention (as the same may be amended
     from time to time, the "ISM Code") adopted by the International Maritime
     Organization or any replacement of the ISM Code and in particular, without
     prejudice to the generality of the foregoing, as and when required to do so
     by the ISM Code and at all times thereafter, (i) to hold or to procure that
     the operator of each of the Vessels holds, a valid Document of Compliance
     (being a document issued to a vessel operator as evidence of its compliance
     with the requirements of the ISM Code) duly issued to the related Borrower
     or the operator (as the case may be) pursuant to the ISM Code and a valid
     Safety Management Certificate (being a document issued to a vessel as
     evidence that the vessel operator and its shipboard management operate in
     accordance with an approved structured and documented system enabling the
     personnel of that vessel operator to implement effectively the safety and
     environmental protection policy of that vessel operator) duly issued to
     each of the Vessels pursuant to the ISM Code, (ii) to

                                       38

     provide the Agent with copies of any such Document of Compliance and Safety
     Management Certificate promptly following the issue thereof and after every
     renewal and (iii) to keep or to procure that there is kept, on board each
     of the Vessels a copy of any such Document of Compliance and the original
     of any such Safety Management Certificate.

          (c) Ensure that the laying-up of any Vessel is commercially
     reasonable; provided that each laid-up Vessel shall be maintained in
     accordance with ordinary and reasonable commercial standards for laid-up
     vessels, and that the Agent is notified of each lay-up within thirty (30)
     days after the commencement thereof.

     SECTION 6.21 Appraisals. Upon the request of the Agent and at the expense
of the Credit Parties, jointly and severally, furnish the Agent with appraisals
from an Appraiser for each of the Vessels; provided, however, except during the
occurrence of a Default, such request shall not be made more than once in any
twelve-month period.

     SECTION 6.22 Reimbursement for Expenses. Reimburse the Agent, or cause the
Borrowers, Westbrook and the Guarantor, jointly and severally, to reimburse the
Agent, promptly, with interest at the interest rate applicable to the Notes, for
any and all expenditures which the Agent may from time to time make in providing
protection in respect of insurance, discharge or purchase of liens, taxes, dues,
assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorneys' fees and expenses, necessary or appropriate translation fees
for documents made in a language other than English and other matters, in each
case in respect of which a Credit Party has Defaulted in its obligation
hereunder with respect to such matters, or a Credit Party has Defaulted in its
Obligations hereunder with respect to such matters, to provide. Such obligation
of the Borrowers and the Guarantor to reimburse the Agent shall be an additional
indebtedness due from the Credit Parties, secured by the Collateral and the
Transaction Documents, and shall be payable by the Credit Parties on demand
(unless notice of demand is waived herein or in another agreement). The Agent,
though privileged to do so, shall be under no obligation to the Borrowers or the
Guarantor to make any such expenditures, nor shall the making thereof relieve
the Borrowers or the Guarantor of any default in that respect. This Section 6.22
shall survive any termination of this Agreement and the satisfaction of the
Obligations.

     SECTION 6.23 Insurance. The Guarantor and the Borrowers shall cause each
Vessel to be insured by a financially sound and reputable insurance company,
satisfactory to the Requisite Lenders, against loss or damage by fire,
explosion, theft, Environmental Claim or other hazards which are included under
casualty insurance coverage in amounts consistent with normal industry
practices, and maintain or cause to be maintained with such insurers at least an
unlimited amount (except for oil pollution risks which is limited to One Million
Dollars ($1,000,000) per Vessel) of comprehensive liability insurance when any
part of the Vessel is operated and at least the same amount of comprehensive
liability insurance when the Vessel is in storage, under policies which may
cover the Guarantor and any of its Subsidiaries, and against other hazards,
risks and liability to persons and property to the extent and in the manner
customary for companies in similar businesses. The Credit Parties shall deliver
to the Agent, from time to time upon its request, a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts of the insurance, the dates of the expiration

                                       39

thereof and the properties and risks covered thereby. All such policies shall be
in form and substance satisfactory to the Agent. Any and all insurance proceeds
in respect of a Vessel shall be paid in accordance with the terms and conditions
of the related Security Documents.

     SECTION 6.24 Reserved.

     SECTION 6.25 Purchase Agreements. On their own behalf and on behalf of the
Agent and the Lenders, enforce all of its material rights under any agreement
pursuant to which it acquired a Vessel and all warranties in respect of a
Vessel.

     SECTION 6.26 Investment Company Act. Conduct its operation in a manner
which will not subject it to registration as an "investment company" under the
Investment Company Act.

     SECTION 6.27 Payments on Collateral. If it shall receive from any Person
any amounts with respect to the Collateral, then, in accordance with this
Agreement and the other Transaction Documents, it shall receive such payment in
trust for the Agent (as secured party hereunder and under the other Transaction
Documents) and from and after the occurrence and continuance of an Event of
Default or as otherwise provided in the Transaction Documents, it shall
immediately remit such amounts to the Agent.

     SECTION 6.28 Maintenance of Vessels. At its own cost and expense, maintain,
repair, refurbish and keep (or cause to be maintained, repaired, refurbished or
kept) each Vessel, (i) according to prudent industry practice, (ii) seaworthy
and otherwise capable of performing in all material respects the function for
which it was designed and shall be in good working order with allowance for
normal wear and tear, (ii) suitable for continued commercial use, (iii) in a
manner consistent with maintenance, repair and refurbishment practices used by
it in respect of Vessels owned, serviced or leased by it (or any of its
Affiliate), (iv) in accordance in all material respects with all manufacturer's
warranties in effect and in accordance with all applicable provisions, if any,
of insurance policies required to be maintained, and (v) in compliance in all
material respects with any applicable laws (including, without limitation,
annual inspections required under Panamanian law). In no event shall it
adversely discriminate in any material respect as to the use or maintenance,
repair or refurbishment of any Vessel as compared to any other vessel of a
similar nature which it owns, services or leases. It will maintain, or cause to
be maintained, in all material respects all records, logs and other materials
required by applicable law, relevant industry standards or any Governmental
Authority having jurisdiction over any Vessel. All such records, logs and other
materials shall be held for the benefit of the Agent and the Lenders.

     SECTION 6.29 Registration and Documentation. A Borrower may provisionally
register title to a Vessel in accordance with the laws of an Approved
Jurisdiction. Each Credit Party shall, within six months of a Borrower's receipt
of the certified copy of the legalized or apostilled Bill of Sale and Acceptance
for a Vessel or such other period as may be permitted under the laws of the
Approved Jurisdiction and that does not result in the deletion of the Vessel
from the Registry for any period of time (x) obtain permanent registration of
each Vessel in its Approved Jurisdiction and take all actions incidental to
obtaining such permanent registration (including, without limitation, completing
the inspection required under Panamanian law) and (y) deliver a certified copy
of permanent registration for each Vessel to the Agent. Each Borrower also
agrees

                                       40

to cause this Mortgage to be translated into Spanish by an authorized Panamanian
public translator, protocolized by a notary public into a notarial document
which can be filed at the Panamanian public registry and filed at the public
registry of Panama on or before December 1, 2004.

                                  ARTICLE VII
                               NEGATIVE COVENANTS

     The Guarantor covenants and agrees that, so long as this Agreement shall
remain in effect or any of the Obligations shall be outstanding, it shall not,
and shall cause Westbrook to not permit any of the Borrowers to, without the
prior written consent of the Requisite Lenders:

     SECTION 7.01 Indebtedness. With respect to a Borrower, contract for,
create, incur, assume or suffer to exist any Indebtedness.

     SECTION 7.02 Liens. Create, assume, permit or suffer to exist any mortgage,
pledge, encumbrance, security interest or other Lien securing an obligation on
any Vessel or on any other assets of a Borrower, whether now owned or hereafter
acquired, except Permitted Encumbrances.

     SECTION 7.03 Asset Sales. Without the prior written consent of the
Requisite Holders, sell, lease, transfer, assign or otherwise dispose of any
Vessel or other Collateral.

     SECTION 7.04 Assignment of Insurances. Except pursuant to the Assignment of
Earnings and Insurances, grant an assignment or permit or suffer to exist any
mortgage, pledge, encumbrance, security interest or other Lien on the Insurances
relating to a Vessel.

     SECTION 7.05 Sale of Notes or Accounts Receivable. With respect to the
Borrowers, sell, lease, transfer, assign or otherwise dispose of any notes,
accounts receivable or other obligations owed to by any Person, except (a) for
the purpose of collection in the ordinary course of its business and (b) to the
extent that, both before and after giving effect to any such sale, lease,
transfer, assignment or disposition (taking into account any prepayment to be
made to the Lenders under this Agreement from the net proceeds of any such sale,
lease, transfer, assignment or disposition), no Default or Event of Default
would exist hereunder.

     SECTION 7.06 Sale and Leaseback. Without the prior written consent of the
Requisite Lenders, enter into any arrangements, directly or indirectly, with any
Person whereby it shall sell or transfer any Collateral or other property,
whether real or personal, of the Borrowers, whether now owned or hereafter
acquired.

     SECTION 7.07 Restricted Payments. With respect to any Borrower, except in
connection with the exercise of rights by the Agent under a Pledge Agreement,
from and after the occurrence of a Default, declare or pay any dividend or make
any distribution on its capital stock or purchase, redeem, acquire or otherwise
retire any capital stock for value (in each case, a "Restricted Payment").

     SECTION 7.08 Investments. With respect to a Borrower, make any Investment
unless at the time of, and after giving effect to, the making of any proposed
Investment, no Default or

                                       41

Event of Default has occurred and is continuing or would occur as a consequence
of the making of such Investment. Notwithstanding the foregoing sentence, the
Borrowers may make the following Investments at any time: (a) direct obligations
of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States), in
each case maturing within one year from the date of acquisition thereof, and (b)
investments in certificates of deposit, banker's acceptances and time deposits
maturing within the earlier of (x) the Maturity Date and (y) 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000.

     SECTION 7.09 Restriction on Payment Restrictions Affecting Borrowers.
Create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction (other than pursuant to this Agreement) on the ability of a
Borrower to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits or pay any
Indebtedness owed to the Guarantor, (b) make advances or loans to the Guarantor
or (c) transfer any of its properties or assets to the Guarantor, except for
such encumbrances or restrictions existing under or by reason of applicable law.

     SECTION 7.10 Change in Business. Engage (directly or indirectly) primarily
in any business other than its business as of the Closing Date and other
businesses reasonably related thereto.

     SECTION 7.11 OFAC. Permit any Vessel pledged as Collateral to be located,
operated or used (directly or indirectly) in a Prohibited Jurisdiction or by a
Prohibited Person, and no lessee or sublessee shall be a Prohibited Person or
organized in a Prohibited Jurisdiction; provided that, with respect to a
Prohibited Jurisdiction, a Vessel may be located, operated or used in such
Prohibited Jurisdiction to the extent that (a) TBS North America Liner, Ltd.
and/or the operator of the Vessel, as required by law, has obtained all required
valid and effective licenses from all United States Governmental Authorities
permitting the location, operation and/or use of such Vessel in such Prohibited
Jurisdiction notwithstanding a prohibition order (or any similar order or
directive), sanction or restriction promulgated or administered by any
Governmental Authority, including, without limitation, the Office of Foreign
Assets Control of the United States Treasury Department, the United States
Department of Commerce and the United States Department of State, (b) such
operator locates, operates and/or uses such Vessel in accordance with the terms
and conditions of such license, (c) such license is maintained in full force and
effect during any location, operation and/or use of such Vessel in such
Prohibited Jurisdiction, and (d) a certified copy of such license (together with
renewals thereof and any amendments, supplements, or other modifications
thereto) has been promptly delivered to the Agent.

     SECTION 7.12 Transactions with Affiliates. With respect to a Borrower,
enter into any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate, other than on terms and
conditions substantially as favorable to such Person as would be obtainable by
such Person at the time in a comparable arm's-length transaction with a Person
other than an Affiliate. With respect to the Guarantor or Westbrook, enter into
any transaction or series of related transactions, whether or not in the
ordinary course of business,

                                       42

with any Borrower, other than on terms and conditions substantially as favorable
to such Person as would be obtainable by such Person at the time in a comparable
arm's-length transaction with a Person other than an Affiliate. Notwithstanding
the foregoing, the restrictions set forth in this Section 7.12 shall not apply
to (a) the payment of reasonable and customary fees to directors of a Borrower
who are not employees of such Borrower, (b) any other transaction with any
employee, officer or director of the Guarantor, a Borrower or any of their
respective Subsidiaries pursuant to employee benefit plans and compensation
arrangements in amounts customary for corporations similarly situated to the
Guarantor, such Borrower or any such Subsidiary and entered into the ordinary
course of business and approved by the Board of Directors of the Guarantor or
such Borrower or any committee thereof or the Board of Directors of such
Subsidiary, (c) any Restricted Payment permitted by Section 7.07 and (d) the
Pooling Arrangements.

     SECTION 7.13 Changes in Offices or Names. Change the name or location of
the chief executive office of any Credit Party, the office of the chief place of
business any such Credit Parties, or the office of the Credit Parties in which
the records relating to the Collateral and the Credit Parties have taken at
their own cost and expense all action necessary or advisable so that such
changes do not impair the security interest, perfection or priority of the Agent
in, to or under any of the Collateral are kept unless the Agent shall have
received thirty (30) days prior written notice of such change.

     SECTION 7.14 Changes in Fiscal Year. Change its fiscal year.

     SECTION 7.15 Other Indebtedness. With respect to any Vessel owned
(directly, beneficially or controlled by agreement), engage in any offering,
placement or arrangement of any Indebtedness of the Credit Parties or their
Affiliates, other than the transaction described in this Agreement.

     SECTION 7.16 Consolidation, Merger and Sale of Assets. With respect to a
Borrower, consolidate with, or merge with or into, any other Person or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or substantially all of its property or assets; and, with
respect to the Guarantor, consolidate with, or merge with or into, any other
Person or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or substantially all of its property or assets
unless the Guarantor has satisfied each of the following conditions:

          (a) The entity formed by such consolidation or into which such Credit
     Party is merged or the Person which acquires by conveyance or transfer
     substantially all of the assets of such Credit Party as an entirety shall
     expressly assume all of the obligations of such Credit Party under this
     Agreement and the other Transaction Documents pursuant to a written
     supplement to this Agreement executed in accordance with Article XI.

          (b) Immediately prior to and after giving effect to such transaction,
     no Default or Event of Default shall have occurred and be continuing and
     the Agent shall have received a certificate from an Executive Officer to
     such effect.

                                       43

          (c) The Agent shall have received an opinion of counsel (in form and
     substance satisfactory to the Agent) regarding the due existence and good
     standing of the merged or consolidated entity, the due assumption,
     legality, validity and enforceability of this Agreement and the other
     Transaction Documents, the title to the related Vessels and the priority of
     the Mortgages, as applicable.

          (d) Upon any consolidation or merger, or any conveyance or transfer of
     substantially all of the assets of such Credit Party as an entirety in
     accordance with this Section 7.16, the successor entity formed by such
     consolidation or into which such Credit Party is merged or to which such
     conveyance or transfer is made shall succeed to, and be substituted for,
     and may exercise every right and power of, such Credit Party under this
     Agreement and the other Transaction Documents with the same effect as if
     such successor entity had been named as a Credit Party herein. No such
     conveyance or transfer of substantially all of the assets of such Credit
     Party as an entirety shall have the effect of releasing such Credit Party
     or any successor entity which shall theretofore have become such in the
     manner prescribed in this Section 7.16 from its liability hereunder.
     Nothing in this Section 7.16 shall restrict any Borrower from chartering
     the Vessels so long as such charters are not bareboat charters.

     SECTION 7.17 Prohibited Transactions. Neither Borrower, Guarantor nor any
ERISA Affiliate has engaged in any transaction prohibited by Section 408 of
ERISA or Section 4975 of the Code.

     SECTION 7.18 Amendment or other Modification of Certain Documents. Without
the prior written consent of the Agent, none of the Borrowers or the Guarantor
shall (or shall permit) amend or modify (or permit the amendment or other
modification) of (x) the articles of incorporation, by-laws or other
organizational documents of any Borrower in any manner that would adversely
affect the rights of the Agent or the Lenders hereunder or under the other
Transaction Documents or impair the duties or obligations of a Borrower
hereunder or under any other Transaction Document, or (y) any Filipino Bareboat
Charter, any Memorandum of Three Party Agreement or any pooling agreement to
which a Borrower is a party or a Vessel is subject; provided that the Credit
Parties shall extend the term of the Filipino Bareboat Charter and each
Memorandum of Three Party Agreement from time to time so that the term thereof
does not expire prior to the satisfaction and payment of all obligations of the
Credit Parties under the Transaction Documents.

     SECTION 7.19 Regarding the Vessels. No Credit Party shall permit the
registration of any Vessel in an Approved Jurisdiction to lapse and, without the
prior written consent of the Agent, delete the registration of any Vessel from
the registry of any Approved Jurisdiction.

                                  ARTICLE VIII
                             AGREEMENT TO GUARANTEE

     SECTION 8.01 Obligations Guaranteed.

          (a) In consideration for the Commitments, the Guarantor hereby
     unconditionally and irrevocably guarantees to each of the Agent and the
     Lenders (i) the

                                       44

     full and prompt payment of the principal of the Notes and the indebtedness
     represented thereby when and as the same shall become due and payable,
     whether at the stated maturity thereof, by acceleration, call for
     redemption or otherwise; (ii) the full and prompt payment of interest on
     the Notes when and as the same shall become due and payable (including
     interest at the Overdue Rate on any part of the principal amount, interest
     amount or other amount due under this Agreement and not paid when due);
     (iii) the full and prompt payment of an amount equal to each and all of the
     payments and other sums when and as the same shall become due, required to
     be paid by a Borrower under the terms of this Agreement and under each of
     the other Transaction Documents to which it is a party (including, without
     limitation, any indemnity for any loss, claim, expense or liability
     (including, without limitation, any Environmental Claims) that the Agent, a
     Lender or any of their respective officers, directors, employees or agents
     may suffer or incur) and (iv) the full and prompt performance and
     observance by a Borrower and Westbrook of the obligations, covenants and
     agreements required to be performed and observed by such Borrower and/or
     Westbrook under the terms of this Agreement and under each of the other
     Transaction Documents to which it is a party (items (i) through (iv), the
     "Guarantee Obligations"). The Guarantor hereby irrevocably and
     unconditionally agrees that upon any default by a Borrower in the payment,
     when due, of any principal of, interest on or other amounts (including
     amounts in respect of fees and indemnification owing to the Agent or the
     Lenders) due under the Notes, this Agreement or any other Transaction
     Document, the Guarantor will promptly pay the same within ten (10) days
     after receipt of written demand therefor from the Agent or any Lender. The
     Guarantor further hereby irrevocably and unconditionally agrees that upon
     any default by a Borrower in any of its obligations, covenants and
     agreements required to be performed and observed by such Borrower under
     this Agreement or under any other Transaction Document to which it is a
     party, the Guarantor will effect the observance of such obligations,
     covenants and agreements within ten (10) days after receipt of written
     demand therefor from the Agent or any Lender.

          (b) All payments by the Guarantor shall be paid in the lawful currency
     of the United States. Each and every default (i) in the payment of the
     principal of, premium, if any, interest on or other amounts due under the
     Notes, (ii) in the payment of any sum required to be paid by a Borrower
     under the terms of this Agreement or the other Transaction Documents, or
     (iii) in the prompt performance and observance by a Borrower of all of the
     obligations, covenants and agreements required to be performed and observed
     by such Borrower under the terms of the Transaction Documents, shall give
     rise to a separate cause of action hereunder, and separate suits may be
     brought hereunder as each cause of action arises.

          (c) The Guarantor further agrees that the Guarantee Obligations
     constitute an absolute, unconditional, present and continuing guarantee of
     performance and payment and not of collection, and waives any right to
     require that any resort be had by the Agent and the Lenders to (i) any
     security held by or for the benefit of the Agent and the Lenders for
     payment of the principal of, premium, if any, interest on or other amounts
     due under the Notes, this Agreement or the Transaction Documents, (ii) the
     Agent's and Lenders' right against any other Person, or (iii) any other
     right or remedy available to the Agent and the Lenders by contract,
     applicable law or otherwise. The Guarantee Obligations are

                                       45

     direct, unconditional and completely independent of the obligations of any
     other Person or entity, and a separate cause of action or separate causes
     of action may be brought and prosecuted against the Guarantor without the
     necessity of any other party or previous proceeding with or exhausting any
     other remedy against any other Person who might have become liable for the
     indebtedness or of realizing upon any security held by or for the benefit
     of the Agent and the Lenders.

          (d) The Guarantor shall pay to the Agent and the Lenders all
     reasonable costs and expenses (including, without limitation, reasonable
     attorneys' fees) incurred by the Agent and the Lenders upon the occurrence
     of an Event of Default under any or all of the Transaction Documents.

     SECTION 8.02 Guarantee Obligations of Guarantor Unconditional. The
Guarantee Obligations shall be absolute and unconditional and shall remain in
full force and effect until (1) the entire principal of, premium, if any,
interest on and other amounts due under the Notes shall have been paid and (2)
all other sums payable by the Borrowers and the Guarantor under this Agreement
and the other Transaction Documents have been paid in full (including, without
limitation, Section 8.01 hereof) have been paid in full, and, to the extent
permitted by law, such Guarantee Obligations shall not be affected, modified,
released or impaired by any state of facts or the happening from time to time of
any event, including, without limitation, any of the following, whether or not
with notice to or the consent of the Guarantor:

          (a) the invalidity, irregularity, illegality, frustration or
     unenforceability of, or any defect in, (i) any Transaction Document or (ii)
     any collateral security given in connection therewith;

          (b) any present or future law or order of any government (de jure or
     de facto) or of any agency thereof purporting to reduce, amend or otherwise
     affect the Notes or any other obligation of a Credit Party or any other
     obligor or to vary any terms of payment;

          (c) any claim of immunity on behalf of a Credit Party or any other
     obligor or with respect to any property of a Credit Party or any other
     obligor;

          (d) the waiver, compromise, settlement, release, extension, change,
     modification or termination of any or all of the obligations, covenants or
     agreements of (i) a Credit Party under this Agreement or any other
     Transaction Document (except by payment in full of all its Obligations
     under this Agreement) or (ii) the Guarantor with respect to the Guarantee
     Obligations (except by payment in full of all the Guarantee Obligations
     hereunder);

          (e) the failure to give notice to the Guarantor of the occurrence of a
     Default or an Event of Default hereunder or under any other Transaction
     Document;

          (f) the transfer, assignment, sublease or mortgaging, or the purported
     or attempted transfer, assignment, sublease or mortgaging, of all or any
     part of the interest of a Credit Party in any of its properties, or any
     failure of or defect in the title with respect to a Borrower's interest in
     any of its properties;

                                       46

          (g) the release, sale, exchange, surrender or other change in any
     collateral security for payment of the Obligations of the Borrowers;

          (h) the extension of the time for payment of any amounts payable on
     the Notes or any part thereof or of the time for performance of any other
     obligations, covenants or agreements under or arising out of this
     Agreement, any other Transaction Document or the extension or the renewal
     of any thereof;

          (i) the modification or amendment (whether material or otherwise) of
     any Guarantee Obligation, covenant or agreement set forth in any
     Transaction Document;

          (j) the taking of, or the omission to take, any of the actions
     referred to in this Agreement or any Transaction Document;

          (k) any failure, omission, delay, or lack on the part of the Agent or
     the Lenders or any other Person to enforce, assert or exercise any right,
     power or remedy conferred on the Agent and the Lenders or such other Person
     in this Agreement or any other Transaction Document;

          (l) the voluntary or involuntary liquidation, dissolution, sale or
     other disposition of all or substantially all the assets, marshalling of
     assets and liabilities, receivership, insolvency, bankruptcy, assignment
     for the benefit of creditors, reorganization, arrangement or composition
     with creditors or readjustment of, or other similar proceedings affecting
     the Guarantor or any of their assets, or any allegation or contest of the
     validity of this Agreement, or any other Transaction Document, or the
     disaffirmance or attempted disaffirmance of this Agreement or any other
     Transaction Document, in any such proceedings;

          (m) any event or action that would, in the absence of this Section,
     result in the release or discharge of the Guarantor from the performance or
     observance of any Guarantee Obligation, covenant or agreement contained in
     this Guarantee, other than the performance thereof;

          (n) the default or failure of any Guarantor to fully perform any of
     its Guarantee Obligations;

          (o) any other circumstances which might otherwise constitute a legal
     or equitable discharge or defense of a surety or a guarantor;

          (p) the actual or purported assignment of any of the Guarantee
     Obligations;

          (q) the receipt and acceptance by the Agent or the Lenders of notes,
     checks or other instruments for the payment of money made by the Guarantor
     and any extensions and renewals thereof (other than the payment in full of
     the entire principal of, premium, if any, interest on and other amounts due
     under the Notes and all other sums payable by the Borrowers and the
     Guarantor under this Agreement and the other Transaction Documents);

                                       47

          (r) to the extent permitted by law, the release or discharge of the
     Guarantor from the performance or observance of any guaranteed obligation,
     covenant or agreement contained herein by operation of law;

          (s) any release or impairment of the Collateral pledged under this
     Agreement or any other Transaction Document;

          (t) the release, substitution or replacement in accordance with the
     terms of any Transaction Document of any property subject thereto or any
     redelivery, repossession, surrender or destruction of any such property, in
     whole or in part;

          (u) any limitation on the liability or obligations of a Borrower under
     this Agreement or any other Transaction Document or any termination,
     cancellation, frustration, invalidity or unenforceability, in whole or in
     part, of this Agreement or any other Transaction Document, or any term
     thereof;

          (v) the merger or consolidation or any sale, lease or transfer of any
     or all of the assets of any Borrower or the Guarantor to any Person; or

          (w) any other occurrence whatsoever, whether similar or dissimilar to
     the foregoing.

     SECTION 8.03 Waiver by Guarantor; Expenses. The Guarantor hereby expressly
(A) waives notice from the Agent and the Lenders of its acceptance and reliance
on the Guarantor's Guarantee or of any action taken or omitted in reliance
hereon, (B) waives diligence, presentment, demand for payment, protest, any
requirement that any right or power be exhausted or any action be taken against
the Borrowers or against any other obligor under any of the Transaction
Documents or against the Collateral or any other collateral security for the
Obligations, (C) waives any right to require a proceeding first against the
Borrowers or to exhaust any security for the performance of the obligations of
the Borrowers, (D) agrees that the liability of the Guarantor shall not be
affected or decreased by any amendment, termination, extension, renewal, waiver,
modification or any, pledge or assignment of this Agreement or the rejection or
disaffirmance thereof in any bankruptcy or like proceedings, and (E) agrees that
if any payment under the Transaction Documents is rescinded or otherwise must be
returned by the Lenders or any assignee thereof for any reason whatsoever, then
the Guarantee Obligations shall continue to be effective or reinstated with
respect to such payment as though the Borrowers had never received such payment.
The Guarantor agrees to pay all costs, fees, commissions and expenses
(including, without limitation, all court costs and reasonable attorneys' fees)
which may be incurred by the Agent or the Lenders in enforcing or attempting to
enforce the Guarantee Obligations following any default on the part of the
Guarantor hereunder, whether the same shall be enforced by suit or otherwise.

     SECTION 8.04 Other Security. The Agent and Lenders may pursue their rights
and remedies against the Guarantor or any other Credit Party notwithstanding (a)
any other Guarantee of or security for the Obligations and (b) any action taken
or omitted to be taken by the Agent, the Lenders or any other Person to enforce
any of the rights or remedies under such other guarantee or with respect to any
other security.

                                       48

     SECTION 8.05 No Set-off by the Guarantor. No set-off, abatement,
recoupment, counterclaim, reduction or diminution of an obligation, or any
defense of any kind or nature which the Guarantor has or may have with respect
to a claim hereunder, shall be available hereunder to the Guarantor against the
Agent or the Lenders.

     SECTION 8.06 Reserved.

     SECTION 8.07 Limitation on Liability. Any term or provision of this
Agreement or any other Transaction Document to the contrary notwithstanding, the
maximum, aggregate amount of the Obligations guaranteed hereunder by the
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Agreement or any other Transaction Document, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.

                                   ARTICLE IX
              EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS

     SECTION 9.01 Events of Default. Any one or more of the following events
shall constitute an Event of Default:

          (a) if any payment of any Reduction Amount, interest, fees, charge or
     any other amounts due to the Agent or the Lenders under the Notes, this
     Agreement, the Mortgages, or any Transaction Document, whether at the
     stated maturity thereof or at any date fixed for payment by acceleration,
     by notice of prepayment or otherwise, shall not be made on the due date
     thereof and if such failure to pay shall remain unremedied for five (5)
     Business Days;

          (b) if any Credit Party (or Person acting on behalf of a Credit Party)
     shall default in the performance or observance of any covenant contained in
     Sections 6.01(a), 6.07, 6.14, 6.16, 6.17, 6.18, 6.23 or in Article VII of
     this Agreement, Section 4.01, Section 4.02 or Article V of the Assignment
     of Earnings and Insurances, the second sentence of Section 5 and Section
     7(a) of the Pledge Agreement(s) and Article I, Sections 4, 5(a)(ii), 7, 9,
     10, 12(a), 13(b), 14 and 19 of the Mortgages;

          (c) if any Credit Party (or Person acting on behalf of a Credit Party)
     shall default in any material respect in the performance or observance of
     any covenant contained in Article VI of this Agreement or any other
     covenant, agreement or condition (other than those set forth in (a) or (b)
     above) contained in this Agreement or in any other Transaction Document and
     such default shall not be cured by the earlier of (i) twenty (20) days
     after an Executive Officer of such Credit Party had actual knowledge of
     such default and (ii) twenty (20) days after receipt by such Credit Party
     of notice thereof from the Agent;

          (d) if any representation or warranty made by a Credit Party (or
     Person acting on behalf of a Credit Party) herein or in any other
     Transaction Document shall prove to have been false, incorrect or
     misleading in any material respect on the date as of which made and uncured
     at the time discovered and shall not have been cured by the earlier of (i)
     30 days after an Executive Officer of such Credit Party obtains actual
     knowledge

                                       49

     thereof and (ii) 30 days after receipt by such Credit Party of notice
     thereof from the Agent or a Lender;

          (e) if a Credit Party shall (i) generally not be paying its debts as
     they come due, (ii) file a petition in bankruptcy or a petition to take
     advantage of any insolvency act, (iii) become insolvent or make an
     assignment for the benefit of its creditors, (iv) consent to the
     appointment of a custodian or receiver of itself or of the whole or any
     substantial part of its property, (v) on a petition in bankruptcy filed
     against it, have an order for relief entered against it or (vi) file a
     petition or answer seeking reorganization or arrangement under the federal
     bankruptcy laws or any other applicable law;

          (f) if an involuntary petition in bankruptcy shall be filed against a
     Credit Party or any of their respective subsidiaries and not dismissed
     within 60 days from the date of the filing;

          (g) (i) any Plan shall incur an accumulated funding deficiency (as
     defined in Section 412 of the Code or Section 302 of ERISA), whether or not
     waived, or fail to make a required installment payment on or before the due
     date under Section 412 of the Code or Section 302 of ERISA, or (ii)
     Borrower, Guarantor or any ERISA Affiliate shall have engaged in a
     transaction which is prohibited under Section 4975 of the Code or Section
     406 of ERISA which could result in the imposition of liability on any of
     Borrower, Guarantor or any ERISA Affiliate and an exemption shall not be
     applicable or have been obtained under Section 408 of ERISA or Section 4975
     of the Code, or (iii) Borrower, Guarantor or any ERISA Affiliate shall fail
     to pay when due or is in default on an amount which it shall have become
     liable to pay to the PBGC, any Plan, any Multiemployer Plan or a trust
     established under Section 4049 of ERISA, or (iv) a condition shall exist by
     reason of which the PBGC would be entitled to obtain a decree adjudicating
     that an ERISA Plan must be terminated or have a trustee appointed to
     administer any ERISA Plan, or (v) ERISA, or (v) a proceeding shall be
     instituted against any of Borrower, Guarantor or ERISA Affiliate to enforce
     Section 515 of ERISA, or (vi) any other event or condition shall occur or
     exist with respect to any Employee Benefit, Plan or Multiemployer Plan
     which could subject Borrower, Guarantor or any ERISA Affiliate to any tax,
     penalty or other liability or the imposition of any lien or security
     interest on Borrower, Guarantor or any ERISA Affiliate, (vii) Borrower or
     Guarantor shall incur any liability for any post-retirement or
     post-termination health or life insurance or (viii) the assets of Borrower
     or Guarantor become or are deemed to be assets of an Employee Benefit Plan.
     No Event of Default shall be deemed to be, or have been, waived or
     corrected because of any disclosure by Borrower or Guarantor;

          (h) if a court of competent jurisdiction shall enter an order,
     judgment or decree appointing, without the consent of such Credit Party, a
     custodian or receiver of a Credit Party, or of the whole or any substantial
     part of its property, or approving a petition filed against such entity
     seeking reorganization or arrangement of such entity under applicable law,
     and such order, judgment or decree shall not be set aside or stayed within
     60 days from the date of its entry;

                                       50

          (i) if, under the provisions of any other law for the relief or aid of
     debtors, any court of competent jurisdiction shall assume custody or
     control of a Credit Party or of the whole or any substantial part of such
     entity's property and such custody or control shall not be terminated or
     stayed within 60 days from the date of assumption of custody or control;

          (j) if a final judgment, a fine or other order for the payment of
     money in excess of $1,000,000 or the equivalent thereof in another currency
     shall be rendered by a court or administrative agency against a Credit
     Party and such entity shall not discharge the same or provide for its
     discharge in accordance with its terms, or procure a stay of execution
     thereof within 30 days from the date of its entry and within the 30-day
     period, or any longer period during which execution of such judgment, fine
     or other order shall have been stayed, appeal therefrom and cause the
     execution thereof to be stayed during the appeal;

          (k) if a Credit Party shall default (as principal or guarantor or
     other surety) in any payment of principal or interest on any obligation for
     money borrowed beyond any period of grace provided with respect thereto, or
     if any other default under any agreement under which any such obligation is
     created or under any instrument securing or evidencing such obligation,
     shall have occurred, if the effect of such other default is to cause, or
     permit the holder of such obligation to cause, such obligation to become
     due prior to its stated maturity, provided, however, in the case of any
     such obligation for money borrowed as to which any such default in any
     payment of principal or interest or any such other default has occurred, it
     shall not constitute an Event of Default under this clause (j) unless (i)
     with respect to any such obligation for borrowed money evidenced by common
     loan documents (such as a single credit agreement or a single series of
     notes), the principal amount of such obligation exceeds $1,000,000, or (ii)
     the principal amount of all such obligations for money borrowed (including,
     without limitation, any such obligations described in the immediately
     preceding clause (i)) as to which any such default then exists exceeds
     $1,000,000 in aggregate;

          (l) if an Event of Default has occurred and is continuing under a
     Security Document, or if any of the Transaction Documents shall for any
     reason other than the satisfaction in full of the Obligations cease to be,
     or be asserted by a Credit Party not to be, a legal, valid and binding
     obligation of such Credit Party, enforceable in accordance with its terms;
     or

          (m) if a Borrower ceases to be a direct or indirect Wholly-Owned
     Subsidiary of the Guarantor without the written consent of the Requisite
     Lenders.

     SECTION 9.02 Waiver of Default. Any Event of Default may be waived only
with the written consent of the Requisite Lenders. Any Event of Default so
waived shall be deemed to have been cured and not to be continuing, but no such
waiver shall be deemed a continuing waiver or shall extend to or affect any
subsequent like default or impair any rights arising therefrom.

                                       51

     SECTION 9.03 Remedies. Upon the occurrence and during the continuance of an
Event of Default, the Requisite Lenders or the Agent, on behalf and for the
ratable benefit of the Lenders, may, at the direction of the Requisite Lenders,
do any one or more of the following, all of which are hereby authorized by the
Guarantor and each of the Borrowers:

          (a) declare (i) all or any of the Notes, the Obligations of the Credit
     Parties under this Agreement, the other Transaction Documents and any other
     instrument executed by any of them pursuant to the Transaction Documents to
     be immediately due and payable and, upon such declaration, such obligations
     so declared due and payable shall immediately become due and payable;
     provided, however, that if such Event of Default is under any of Sections
     9.01(e), (f), (h) or (i), then all of the Obligations shall become
     immediately due and payable forthwith without the requirement of any notice
     or other action by the Lenders or the Agent;

          (b) terminate the rights, powers and privileges of the Credit Parties
     under the Transaction Documents (including, without limitation, declaring
     the Commitments and other lending obligations under the Transaction
     Documents, if any, terminated, whereupon the Commitments and such other
     lending obligations, if any, of each Lender shall immediately terminate);

          (c) exercise any or all of the rights and powers and pursue any and
     all of the remedies pursuant to this Article and any of the other
     Transaction Documents (including, without limitation, the Security
     Documents), available to a secured party under the UCC and all other
     rights, remedies and powers irrespective of whether the UCC applies to the
     affected Collateral) permitted by applicable law; and

          (d) bring suit at law or in equity, to collect the payments due under
     each of the Transaction Documents and to recover judgment for the
     Obligations hereby secured, and collect the same out of any and all of the
     Collateral.

     SECTION 9.04 Rights of Set-Off. Regardless of the adequacy of any
Collateral, during the continuance of an Event of Default, any deposits or other
sums credited by or due from any Lender to a Credit Party may be set-off against
the Obligations and any and all other liabilities, direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising, of such
Credit Party to the Lenders. Any Lender that exercises any such set-off right
shall use reasonable diligence to notify such Credit Party of any such exercise,
provided that the failure of such Lender to provide any such notice shall not
affect the validity of such Lender's exercise of such set-off right.

     SECTION 9.05 Rights and Remedies Cumulative. The Lenders' and the Agent's
rights and remedies under this Agreement shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in admiralty, in equity or by statute, and each
and every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Agent or the Lenders, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy. The Lenders

                                       52

and the Agent shall have all other rights and remedies not inconsistent herewith
as provided by law or in equity. No exercise by any Lender or the Agent of one
right or remedy shall be deemed an election. No delay or omission by any Lender
or the Agent shall constitute a waiver, election or acquiescence by such party.

     SECTION 9.06 Specific Remedies. Upon the occurrence and during the
continuance of an Event of Default or after the declaration that all of the
obligations are due and payable:

          (a) At the request of the Agent, each Credit Party shall promptly
     execute and deliver such instruments and other documents as the Agent may
     deem necessary or advisable to enable the Agent to obtain possession of all
     or any part of the Collateral to which possession the Lenders shall at the
     time be entitled hereunder. If a Credit Party shall for any reason fail to
     execute and deliver such instruments and documents after such request by
     the Agent, the Agent may obtain a judgment conferring on the Agent the
     right to such possession on behalf of the Lenders immediately and requiring
     such Credit Party to deliver such instruments and documents to the Agent,
     to the entry of which judgment such Credit Party hereby specifically
     consents.

          (b) The Agent, on behalf of the Lenders, may proceed to enforce the
     rights of the Lenders by directing payment to it of all monies payable
     under any agreement or undertaking constituting a part of the Collateral,
     by proceedings in any court of competent jurisdiction for the appointment
     of a receiver or for sale of all or any part of the Collateral possession
     to which the Lenders shall at the time be entitled hereunder or for
     foreclosure of such Collateral, and by any other action, suit, remedy or
     proceeding authorized or permitted by this Agreement or by law or by
     equity, and may file such proofs of claim and other papers or documents as
     may be necessary or advisable in order to have the claims of the Lenders
     asserted or upheld in any bankruptcy, receivership or other judicial
     proceedings.

          (c) The Agent shall be entitled to set-off against and withdraw all
     amounts constituting a part of the Collateral and to apply the same as
     follows:

          First: To the payment of all reasonable fees, expenses and/or costs,
          including, without limitation, costs, fees and/or expenses in
          connection with any taking, operating, attorney's fees and expenses,
          court costs and other expenses or advances made or incurred by the
          Agent in connection with the ascertainment or protection of its rights
          and the pursuance of its remedies hereunder or under any of the
          Transaction Documents (including, without limitation, the reasonable
          fees and expenses of counsel);

          Second: To the payment of interest on the Notes;

          Third: To the payment of principal on the Notes;

          Fourth: To the payment of all amounts due to the Agent and the Lenders
          in respect of taxes, indemnities, costs, fees, expenses, premiums,
          purchase

                                       53

          of liens or otherwise under the provisions hereof or under any of the
          Transaction Documents;

          Fifth: To the payment of the Obligations, other than those referred to
          in clauses First through Fifth above; and

          Sixth: To the payment of any surplus thereafter remaining to the
          Guarantor, for payment to the applicable Borrower or whomever may be
          lawfully entitled thereto.

          (d) Without limiting the foregoing, the Agent and the Lenders, their
     respective assigns and legal representatives shall have all the remedies of
     a secured party under applicable law and such further remedies as from time
     to time may hereafter be provided pursuant to such law for a secured party.
     In exercising its power of sale, the Agent shall be entitled to add to the
     Loans any and all of the Agent's or Lenders' expenses incurred in
     connection therewith.

     SECTION 9.07 Restoration of Rights and Remedies. In case the Agent or a
Lender shall have proceeded to enforce any right, power or remedy under this
Agreement or any other Transaction Document by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Agent or such Lender, then and in
every such case the Credit Parties, the Agent and the Lenders shall be restored
to their former positions and rights hereunder with respect to this Agreement,
the Transaction Documents, the Collateral, and all rights, remedies and powers
of the Agent and the Lenders shall continue as if no such proceedings had been
taken.

                                    ARTICLE X
                         RELATIONSHIP AMONG THE LENDERS

     SECTION 10.01 Appointment and Authorization. Each Lender hereby irrevocably
appoints, designates and authorizes GMAC CF as the Agent under this Agreement
and under each of the other Transaction Documents and irrevocably authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Transaction Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this Agreement or any
other Transaction Document, together with such actions and powers as are
reasonably incidental thereto. The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on behalf
of the Lenders all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder or the other Transaction Documents,
and promptly to distribute to each Lender its pro rata share of each payment so
received; (b) to give notice on behalf of each of the Lenders to the Borrowers
of any Event of Default specified in this Agreement of which an officer of the
Agent has actual knowledge acquired in connection with its agency hereunder, (c)
to act as Agent on behalf of the Lenders under the other Transaction Documents
and to exercise all rights granted to the Agent under this Agreement and the
other Transaction Documents; and (d) to distribute to each Lender copies of all
notices, financial statements and other materials delivered by the Borrowers
pursuant to this Agreement or the other Transaction Documents as received by the
Agent; provided, however, that no duties or responsibilities herein or therein
shall be implied to

                                       54

have been assumed by the Agent. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Transaction Document, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Transaction Document or otherwise exist against the
Agent.

     SECTION 10.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Transaction Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the gross negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care or for any action it takes
on the advice of counsel.

     SECTION 10.03 Liability of Agent. None of the Agent-Related Persons shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Transaction Document (except
for its own gross negligence or willful misconduct), (b) be liable as a
consequence of any failure or delay in performance by, or any breach by, any
other Lender or any other Person, of its obligations under this Agreement or any
other Transaction Document or (c) be responsible in any manner to any Lender for
any recital, statement, representation or warranty made by a Credit Party, or
any officer thereof, contained in this Agreement or in any other Transaction
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Transaction Document, or for the value of any Collateral
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Transaction Document, or for any failure of a Credit
Party or any other party to this Agreement or any other Transaction Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of any Credit Party.

     SECTION 10.04 Reliance by the Agent.

          (a) The Agent shall be entitled to rely, and shall be fully protected
     in relying, upon (i) any writing, resolution, notice, consent, certificate,
     affidavit, letter, telegram, facsimile, telex or telephone message,
     statement or other document or conversation believed by it to be genuine
     and correct and to have been signed, sent or made by the proper Person or
     Persons, and (ii) any advice or statements of legal counsel (including
     counsel to the Borrowers or the Guarantor), independent accountants and
     other experts selected by the Agent. The Agent shall be fully justified in
     failing or refusing to take any action under this Agreement or any other
     Transaction Document unless it shall first receive such advice or
     concurrence of the Requisite Lenders as it deems appropriate and, if it so
     requests, it shall first be indemnified to its satisfaction by the Lenders
     against any and all liability and expense which may be incurred by it by
     reason of taking or continuing to take any such action. The Agent shall in
     all cases be fully protected in acting, or in refraining from acting, under
     this Agreement or any other Transaction

                                       55

     Document in accordance with a request or consent of the Requisite Lenders
     and such request and any action taken or failure to act pursuant thereto
     shall be binding upon all of the Lenders.

          (b) For purposes of determining compliance with the conditions
     precedent specified in Article V, each Lender that has executed this
     Agreement or shall hereafter execute and deliver an Assignment and
     Acceptance in accordance with Section 10.11 shall be deemed to have
     consented to, approved or accepted or to be satisfied with each document or
     other matter either sent by the Agent to such Lender for consent, approval,
     acceptance or satisfaction, or required thereunder to be consented to or
     approved by or acceptable or satisfactory to the Lender, unless an officer
     of the Agent responsible for the transactions contemplated by the
     Transaction Documents shall have received notice from the Lender prior to
     the borrowing specifying its objection thereto and either such objection
     shall not have been withdrawn by notice to the Agent to that effect or the
     Lender shall not have made available to the Agent the Lender's
     Proportionate Share of such borrowing.

     SECTION 10.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of any Reduction Amount, interest and
fees required to be paid to the Agent on behalf and for the benefit of the
Lenders, unless the Agent shall have received written notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be requested by the Requisite Lenders in accordance with
this Agreement; provided, however, that unless and until the Agent shall have
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best commercial interest
of the Lenders.

     SECTION 10.06 Credit Decision. Each Lender expressly acknowledges that none
of the Agent-Related Persons has made any representation or warranty to it and
that no act by the Agent hereinafter taken, including any review of the affairs
of a Credit Party, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Credit Parties, and all applicable
Lender regulatory laws relating to the transactions contemplated thereby, and
made its own decision to enter into this Agreement and extend credit to the
Borrowers under and pursuant to this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Transaction Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or

                                       56

responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrowers, which may come into the
possession of any of the Agent-Related Persons.

     SECTION 10.07 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Borrowers and the Guarantor, jointly and
severally, shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Credit Parties and without limiting the
obligation of the Credit Parties to do so), ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Notes and the termination
or resignation of the related Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement,
the Transaction Documents or any document contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by any such Person under or in connection with any of the
foregoing; provided, however, that no Lender or Borrower shall be liable for the
payment to the Agent-Related Persons of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent-Related Person's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorney fees) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein to the extent that the Agent is
not reimbursed for such expenses by or on behalf of a Credit Party. The
obligation of the Lenders and the Borrowers in this Section 10.07 shall survive
the payment of the Obligations. If, and to the extent that the obligations under
this Article X are unenforceable for any reason, the Borrowers hereby agree to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law.

     SECTION 10.08 Agent in Individual Capacity. GMAC CF and its affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Guarantor, a Borrower and/or any
of their respective affiliates as though GMAC CF were not the Agent hereunder
and without notice to or consent of the Lenders. With respect to its
Proportionate Share, GMAC CF shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" shall include GMAC CF in its
individual capacity.

     SECTION 10.09 Successor Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, (i) the Agent may resign upon thirty (30)
days' notice to the Lenders and the Borrowers and (ii) the Agent, at the request
of the Requisite Lenders shall resign. If the Agent shall resign as Agent under
this Agreement, the Requisite Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Lenders and the Borrowers, a successor agent from among the
Lenders.

                                       57

Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. The covenants contained
in this Article X shall survive the payment or satisfaction in full of all other
obligations. If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation or
the Requisite Lenders shall have requested the resignation of such Agent, then
(i) the retiring Agent may, on behalf of the Lenders and the Borrowers, appoint
a successor Agent, if such Agent shall have resigned by notifying the Lenders,
or (ii) otherwise, the Requisite Lenders may petition a court of competent
jurisdiction to replace the terminated Agent, in each case (except as waived by
the Requisite Lenders) which successor shall be a bank with an office in New
York, New York, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Any successor Agent appointed under this
Section 10.09 shall be reasonably acceptable to Borrower. The retiring Agent
shall execute and deliver any and all instruments or documents necessary or
advisable to transfer its rights, powers, privileges and duties hereunder and
under the other Transaction Documents and to maintain the perfection and
priority of all security interests granted under the Transaction Documents.

                                       58

     SECTION 10.10 Collateral Matters.

          (a) The Agent is authorized on behalf of all the Lenders, without the
     necessity of any notice to or further consent from the Lenders, from time
     to time to take any action with respect to the Collateral which may be
     necessary to perfect and maintain perfected the security interest in and
     Liens upon the Collateral granted pursuant thereto.

          (b) The Lenders irrevocably authorize the Agent, at its option and in
     its discretion, to release any Lien granted to or held by the Agent upon
     any Collateral (i) upon payment in full of all of the Notes and all other
     Obligations then payable under this Agreement and under any other
     Transaction Document; (ii) consisting of an instrument evidencing
     Indebtedness or other debt instrument, if the indebtedness evidenced
     thereby has been paid in full; (iii) if approved, authorized or ratified in
     writing by all of the Lenders or (iv) upon any sale, transfer, assignment
     or other disposition of any Collateral, to the extent that the same is
     expressly permitted by the terms of this Agreement and the other
     Transaction Documents. Upon request by the Agent at any time, the Lenders
     will confirm in writing the Agent's authority to release particular types
     or items of Collateral pursuant to this Section 10.10(b).

     SECTION 10.11 Assignments, Participations, Etc.

          (a) Any Lender may at any time assign and delegate to one or more
     Eligible Lender (each an "Assignee") all, or any ratable part of all, of
     the Notes and the other interests, rights and obligations of such Lender
     hereunder. In the event of a partial assignment (other than to another
     Lender or an Affiliate of a Lender), such assignment shall be in a minimum
     amount of not less than $1,000,000 or such Lender's entire Proportionate
     Share, in each case, unless otherwise agreed in writing by the Borrowers
     and the Agent; provided, however, that the Borrowers and the Agent may
     continue to deal solely and directly with such Lender in connection with
     the interest so assigned to an Assignee until (i) five (5) Business Days'
     prior written notice of such assignment, together with payment
     instructions, addresses and related information with respect to the
     Assignee, shall have been given to the Borrowers and the Agent by such
     Lender and the Assignee; (ii) such Lender and its Assignee shall have
     delivered to the Borrowers and the Agent an Assignment and Acceptance in
     the form of Exhibit H ("Assignment and Acceptance"), for acceptance and for
     recording by the Agent in the Register, together with any Note subject to
     such assignment; (iii) the assignor Lender or the Assignee has paid to the
     Agent a processing fee in the amount of $4,000, and (iv) the parties to
     each such assignment shall have agreed to reimburse the Agent for all fees,
     costs and expenses (including, without limitation, the reasonable fees and
     out-of-pocket expenses of counsel for the Agent) incurred by the Agent in
     connection with such assignment.

          (b) From and after the date that the Agent notifies the assigning
     Lender that it has received an executed Assignment and Acceptance and
     payment of the above-referenced processing fee, (i) the Assignee thereunder
     shall be a party hereto and, to the extent that rights and obligations
     hereunder have been assigned to it pursuant to such Assignment and
     Acceptance, shall have the rights and obligations of a Lender under the

                                       59

     Transaction Documents, and (ii) the assignor Lender shall, to the extent
     that rights and obligations hereunder and under the other Transaction
     Documents have been assigned by it pursuant to such Assignment and
     Acceptance, relinquish its rights and be released from its obligations
     under the Transaction Documents (and, in the case of an Assignment and
     Acceptance covering all or the remaining portion of an assigning Lender's
     rights and obligations under this Agreement, such Lender shall cease to be
     a party hereto (but shall continue to be entitled to any Interest and other
     Obligations accrued for its account hereunder, not so assigned and not yet
     paid)).

          (c) Within five (5) Business Days after its receipt of notice by the
     Agent that it has received an executed Assignment and Acceptance and
     payment of the processing fee, the Borrowers shall execute and deliver to
     the Agent, a new Note evidencing such Assignee's assigned Proportionate
     Share of the related Loans and, if the assignor Lender has retained a
     portion thereof, a replacement Note in the principal amount of the
     Proportionate Share of the Loans retained by the assignor Lender (such Note
     to be in exchange for, but not in payment of, the Note held by such
     Lender). Immediately upon each Assignee's making its processing fee payment
     under the Assignment and Acceptance, this Agreement shall be deemed to be
     amended to the extent, but only to the extent, necessary to reflect the
     addition of the Assignee and the adjustment of the Proportionate Share of
     the Loans.

          (d) By executing and delivering an Assignment and Acceptance, the
     assigning Lender thereunder and the Assignee thereunder shall be deemed to
     confirm to and agree with each other and the other parties hereto as
     follows: (i) such assignor Lender warrants that it is the legal and
     beneficial owner of the interest being assigned thereby free and clear of
     any adverse claim and that the outstanding balances of its Loan, without
     giving effect to assignments thereof which have not become effective, are
     as set forth in such Assignment and Acceptance, (ii) except as set forth in
     (i) above, such assignor Lender makes no representation or warranty and
     assumes no responsibility with respect to any statements, warranties or
     representations made in or in connection with this Agreement, or the
     execution, legality, validity, enforceability, genuineness, sufficiency or
     value of this Agreement, any other Transaction Document or any other
     instrument or document furnished pursuant hereto or the financial condition
     of any Credit Party or the performance or observance by any Credit Party of
     any of its obligations under this Agreement, any other Transaction Document
     or any other instrument or document furnished pursuant hereto; (iii) such
     Assignee represents and warrants that it is legally authorized to enter
     into such Assignment and Acceptance; (iv) such Assignee confirms that it
     has received a copy of this Agreement, together with copies of the most
     recent financial statements delivered pursuant to Section 6.07 and such
     other documents and information as it has deemed appropriate to make its
     own credit analysis and decision to enter into such Assignment and
     Acceptance; (v) such Assignee will independently and without reliance upon
     the Administrative Agent, such assignor Lender or any other Lender and
     based on such documents and information as it shall deem appropriate at the
     time, continue to make its own credit decisions in taking or not taking
     action under this Agreement; (vi) such Assignee appoints and authorizes the
     Agent to take such action as agent on its behalf and to exercise such
     powers under this Agreement as are delegated to the Agent by the terms
     hereof, together with such powers as are reasonably incidental

                                       60

     thereto; and (vii) such Assignee agrees that it will perform in accordance
     with their terms all the obligations which by the terms of this Agreement
     are required to be performed by it as a Lender.

          (e) Any Lender may at any time sell to one or more commercial banks or
     other Persons not affiliates of a Credit Party (a "Participant")
     participating interests in the Loans and the other interests of that Lender
     (the "Originating Lender") hereunder and under the other Transaction
     Documents; provided, however, that (i) the Originating Lender's obligations
     under this Agreement shall remain unchanged, (ii) the Originating Lender
     shall remain solely responsible for the performance of such obligations,
     (iii) the Credit Parties and the Agent shall continue to deal solely and
     directly with the Originating Lender in connection with the Originating
     Lender's rights and obligations under this Agreement and the other
     Transaction Documents, (iv) such Participant shall be entitled to the
     benefit of the provisions contained in Section 2.13 limited, as to each
     Participant, to the amount the selling Lender could claim and (v) no Lender
     shall transfer or grant any participating interest under which the
     Participant shall have rights to approve any amendment to, or any consent
     or waiver with respect to, this Agreement or any other Transaction
     Documents other than those that pursuant to the terms of this Agreement
     require the consent of the affected Lender.

          (f) Each Lender agrees to maintain the confidentiality of all
     information identified as "confidential" by the Borrowers and provided to
     it by the Borrowers, or by the Agent on the behalf of the Borrowers, in
     connection with this Agreement or any other Transaction Document, and
     neither it nor any of its Affiliates shall use any such information for any
     purpose or in any manner other than pursuant to the terms contemplated by
     this Agreement; except to the extent such information (i) was or becomes
     generally available to the public other than as a result of a disclosure by
     the Lender, or (ii) was or becomes available on a non-confidential basis
     from a source other than a Credit Party or one of its affiliates; provided,
     however, that any Lender may disclose such information (A) at the request
     or pursuant to any requirement of any Governmental Authority to which the
     Lender is subject or in connection with an examination of such Lender by
     any such authority; (B) pursuant to subpoena or other court process; (C)
     when required to do so in accordance with the provisions of any applicable
     law or requirement of law; and (D) to such Lender's independent auditors
     and other professional advisors. Notwithstanding the foregoing, each
     Borrower authorizes each Lender to disclose to any Participant or Assignee
     and to any prospective Participant or Assignee, such financial and other
     information in such Lender's possession concerning a Borrower or a
     Subsidiary Guarantor which has been delivered to the Agent or the Lenders
     pursuant to this Agreement or which has been delivered to the Agent or the
     Lenders by a Borrower or the Guarantor in connection with the Lenders'
     credit evaluation of a Borrower and/or the Guarantor prior to entering into
     this Agreement, provided that such participant or assignee (or prospective
     participant or assignee) agrees in writing to be bound by a confidentiality
     agreement similar to the provisions of this Section 10.11(e).

          (g) Notwithstanding any other provision contained in this Agreement or
     any other Transaction Document to the contrary, any Lender may assign all
     or any portion of its Proportionate Share of the Notes held by it to any
     Federal Reserve Bank or the United

                                       61

     States Treasury as collateral security pursuant to Regulation A of the
     Board of Governors of the Federal Reserve System and any Operating Circular
     issued by such Federal Reserve Bank, provided that each such assignment
     shall be made in accordance with applicable law and no such assignment
     shall release a Lender from any of its obligations hereunder.

     SECTION 10.12 Other Matters Pertaining to the Agent.

          (a) The relationship between the Agent and each of the Lenders is that
     of an independent contractor. The use of the term "Agent" is for
     convenience only and is used to describe, as a form of convention, the
     independent contractual relationship between the Agent and each of the
     Lenders. Nothing contained in this Credit Agreement nor the other
     Transaction Documents shall be construed to create an agency, trust or
     other fiduciary relationship between the Agent and any of the Lenders.

          (b) As an independent contractor empowered by the responsibilities
     hereunder and under the Transaction Documents, the Agent is nevertheless a
     "representative" of the Lenders, as that term is defined in Article 1 of
     the UCC, for purposes of actions for the benefit of the Lenders and with
     respect to all collateral security and guaranties contemplated by the
     Transaction Documents. Such actions include the designation of the Agent as
     "secured party," "mortgagee" or the like on all financing statements and
     other documents and instruments, whether recorded or otherwise, relating to
     the attachment, perfection, or deeds of trust in collateral security
     intended to secure the payment or performance of any of the Obligations,
     all for the benefit of the Lenders and the Agent.

          (c) If a court of competent jurisdiction shall adjudge that any amount
     received and distributed by the Agent is to be repaid, each Person to whom
     any such distribution shall have been made shall either repay to such Agent
     its proportionate share of the amount so adjudged to be repaid or shall pay
     over the same in such manner and to such Persons as shall be determined by
     such court.

          (d) Any and all rights granted to the Agent under this Agreement or
     any other Transaction Document are to be held and exercised by the Agent as
     administrative agent for the benefit of the Lenders pursuant to the
     provisions of this Agreement.

                                   ARTICLE XI
                                  MISCELLANEOUS

     SECTION 11.01 Notices.

          (a) All notices, requests, approvals and other communications provided
     for hereunder shall be in writing (including, unless the context expressly
     otherwise provides, by facsimile transmission, provided that any matter
     transmitted by a Borrower or the Guarantor by facsimile (i) shall be
     immediately confirmed by a telephone call to the recipient at the number
     set forth in clause (d) hereof, and (ii) shall be followed promptly by a
     hard copy original thereof) and faxed, sent for overnight (next day)
     delivery or delivered, to the address or facsimile number specified for
     notices in Schedule 11.01 or, as directed to the Borrowers, the Guarantor
     or the Agent, to such other address as shall be

                                       62

     designated by such party in a written notice to the other parties, and as
     directed to each other party, at such other address as shall be designated
     by such party in a written notice to the Borrowers, the Guarantor and the
     Agent.

          (b) All such notices, requests and communications shall, when
     transmitted by overnight delivery, or faxed, be effective when delivered
     for overnight (next day) delivery, or transmitted by facsimile machine and
     confirmed by telephone, respectively, or if delivered, upon delivery,
     except that notices delivered to the Agent pursuant to Articles II, V, VI
     and IX shall not be effective until actually received by the Agent.

          (c) Each of the Guarantor and each Borrower acknowledge and agree that
     any agreement of the Agent and the Lenders to receive certain notices by
     telephone and facsimile is solely for the convenience and at the request of
     such Person. The Agent and the Lenders shall be entitled to rely on the
     authority of any Person purporting to be a Person authorized by such
     Borrower or the Guarantor to give such notice and the Agent and the Lenders
     shall not have any liability to any Borrower or the Guarantor or other
     Person on account of any action taken or not taken by the Agent or the
     Lenders in reliance upon such telephonic or facsimile notice. The
     obligation of the Guarantor and the Borrowers to repay the Obligations
     shall not be affected in any way or to any extent by any failure by the
     Agent and the Lenders to receive written confirmation of any telephonic or
     facsimile notice or the receipt by the Agent and the Lenders of a
     confirmation which is at variance with the terms understood by the Agent
     and the Lenders to be contained in the telephonic or facsimile notice.

          (d) All notices hereunder or under any other Transaction Document
     (unless otherwise specified in writing to the Agent and the other parties
     hereto) shall be sent to the following contact information:

                                       63

----------------------------------------------------------------------------------------
IF TO THE AGENT OR GMAC
CF, AS LENDER, TO:              IF TO A CREDIT PARTY, TO:
----------------------------------------------------------------------------------------

210 Interstate North Parkway,   Address:                     with a copy to:
Suite 315
Atlanta, Georgia  30339 USA     Suite 306                    TBS Shipping Services Inc.
Attention: General Counsel      Commerce Building            612 East Grassy Sprain Road
Telephone: (678) 553-2700       One Chancery Lane            Yonkers, NY 10710 USA
Fax: (678) 553-2707             Hamilton HM 12
                                Bermuda                      Attention: Ferdinand Lepere
                                                             Telephone: (914) 961-1000
                                Mailing Address:             Fax: (914) 961-5121
                                                                   and

                                P.O. Box HM 2522             Cardillo & Corbett
                                Hamilton HMGX                29 Broadway
                                Bermuda                      New York, NY 10006 USA

                                Attention: William J. Carr   Attention: Tulio R. Prieto
                                Telephone: 1441 295 9230     Telephone: (212) 344-0464
                                Fax: 1441 295 4957           Fax: (212) 797-1212

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

     SECTION 11.02 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making of the Loans and the execution and
delivery of the Notes and shall continue in full force and effect so long as the
Obligations remain outstanding; provided that any indemnity or reimbursement
obligations of a Borrower or the Guarantor under this Agreement shall survive
any termination of this Agreement.

     SECTION 11.03 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law (except for Section 5-1401 and
Section 5-1402 of the New York General Obligations Law).

     SECTION 11.04 Modification of Agreement.

          (a) No amendment, modification or waiver of any provision of this
     Agreement or any other Transaction Document, and no consent with respect to
     any departure by the Guarantor or any Borrower therefrom, shall be
     effective unless the same shall be in writing and signed by the Requisite
     Lenders and acknowledged by the Agent, and then such waiver shall be
     effective only in the specific instance and for the specific purpose for
     which given; provided, however, that no such waiver, amendment, or consent
     shall, unless in writing and signed by each Lender affected thereby and
     acknowledged by the Agent, do any of the following:

                                       64

               (i)  increase or extend the Commitment or Proportionate Share of
                    any Lender, decrease the Applicable Margin, change the
                    Aggregate Loan Commitment (other than as provided in Article
                    II) or subject any Lender to any additional obligations;

               (ii) postpone or delay any date fixed for any payment of
                    principal, interest, fees or other amounts due to the
                    Lenders (or any of them) hereunder or under any Transaction
                    Document;

               (iii) reduce the principal of, or the rate of interest specified
                    herein on any Loan, or of any fees or other amounts payable
                    hereunder or under any Transaction Document; (iv) amend this
                    Section 11.04;

               (v)  amend Section 2.09 or any other provision with respect to
                    pro rata payments or sharing of recoveries among the
                    Lenders;

and, provided further that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Requisite Lenders
or all the Lenders, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Transaction Document.

          (b) Reserved.

          (c) Each Credit Party hereby agrees that the Lenders may require the
     Credit Parties to jointly and severally pay a fee in connection with any
     waiver, amendment, supplement or other modification to this Agreement or
     any other Transaction Document, which may be granted by the Agent and the
     Lenders in their sole discretion. The Credit Parties agree that the amount
     of such fee in each instance shall equal 0.05% of the then outstanding
     principal balance of the Loans.

     SECTION 11.05 Costs and Expenses. The Guarantor and the Borrowers agree,
whether or not the transactions contemplated hereby shall be consummated, to:

          (a) pay or reimburse the Agent within five (5) Business Days after
     demand for all costs, fees and/or expenses incurred by the Agent,
     including, without limitation, any and all costs, fees and/or expenses in
     connection with the evaluation, development, preparation, negotiation,
     delivery, administration, execution of, and any amendment, supplement,
     waiver or modification to (in each case, whether or not consummated), this
     Agreement, any other Transaction Document and any other documents prepared
     in connection herewith (including any commitment letter and related
     documents preceding this Agreement) or therewith, and the consummation of
     the transactions contemplated hereby and thereby, including, in the case of
     any of the foregoing, attorney fees and expenses incurred by the Agent with
     respect hereto and thereto;

          (b) pay or reimburse the Agent and each Lender within five (5)
     Business Days after demand for all costs, fees and/or expenses incurred by
     the Agent and/or a Lender in

                                       65

     connection with the enforcement, attempted enforcement, or preservation of
     any rights or remedies (including in connection with any "workout" or
     restructuring regarding the Loans, and including in any insolvency
     proceedings or appellate proceeding) under this Agreement, any other
     Transaction Document, and any such other documents, including attorney fees
     and expenses incurred by the Agent and/or any Lender; and

          (c) pay or reimburse the Agent within five (5) Business Days after
     demand for all reasonable audit, environmental inspection and review,
     search and filing, registration and recording costs, fees and/or expenses,
     incurred or sustained in connection with the matters referred to under
     Section 11.05(a) and Section 11.05(b).

     SECTION 11.06 Waivers. No waiver of any of the provisions of this Agreement
(a) shall be valid unless evidenced by a writing executed by each party to be
bound thereby, (b) shall be deemed or shall constitute a waiver of any other
provision of this Agreement or any other provisions hereof (whether or not
similar), or (c) shall constitute a continuing waiver unless otherwise expressly
provided. No delay on the part of the Agent or any Lender in exercising any
right or remedy hereunder shall operate as a waiver thereof nor shall any single
or partial exercise of any power or right or remedy preclude other or further
exercise thereof or the exercise of any other right or remedy. No notice to or
demand on any Borrower or the Guarantor in any case shall entitle it to any
other or further notice or demand in the same or similar circumstances.

     SECTION 11.07 Indemnification. To the fullest extent permitted by law, each
Credit Party, jointly and severally, agrees to protect, indemnify, defend and
hold harmless each Indemnified Party from and against any and all liabilities,
losses, obligations, damages, penalties, expenses or costs of any kind or nature
and from any suits, judgments, claims or demands (including in respect of or for
attorney costs and other fees and other disbursements of counsel for and
consultants of any Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnified Party
shall be designated a party thereto) based on any federal, state, local or
foreign law or statute, rule or regulation, (including, without limitation,
securities, environmental and commercial laws) or which arises under common law
or at equitable cause or on contract or otherwise on account of or in connection
with any matter or thing or any action or failure to act by the Indemnified
Parties, or any of them, arising out of or relating to the Transaction Documents
or any agreement or instrument contemplated by or executed pursuant to or in
connection with the Transaction Documents (including, without limitation, any
Environmental Claim), but excluding those arising (x) with respect to an
Indemnified Party, by reason of gross negligence or willful misconduct of such
Indemnified Party or (y) in respect of Taxes (as to which indemnification shall
be applicable only as and to the extent set forth in Section 2.13). Upon
receiving knowledge of any suit, claim or demand asserted by any Person that an
Indemnified Party believes is covered by this indemnity, such Indemnified Party
shall give each Credit Party notice thereof and an opportunity to defend it, at
the sole cost and expense of the Borrowers and the Guarantor, with legal counsel
satisfactory to such Indemnified Party. Such Indemnified Party may also require
each Credit Party to defend the matter. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 11.07 may be
unenforceable because it violates any law or public policy, each Credit Party
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of its obligations set
forth in this Section 11.07.

                                       66

The obligations of each Credit Party under this Section 11.07 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.

     SECTION 11.08 Separability of Provisions; Obligations Several.

          (a) If any provision of this Agreement or any other Transaction
     Document should be deemed invalid under any applicable law, such provision
     shall be void and of no effect and shall cease to be a part of this
     Agreement or other Transaction Document without affecting the remaining
     provisions, which shall remain in full force and effect.

          (b) In the event that this Agreement, the Notes, any Transaction
     Document or any of the documents or instruments which may from time to time
     be delivered hereunder or thereunder or any provision hereof or thereof
     shall be deemed invalidated by present or future law of any Governmental
     Authority of competent jurisdiction and binding authority, or if any third
     party shall fail or refuse to recognize any of the powers granted to the
     Agent hereunder when it is sought to exercise them, this shall not affect
     the validity and/or enforceability of all or any other parts of this
     Agreement, the Notes, any Transaction Document or such documents or
     instruments and, in any such case, the Credit Parties covenant and agree
     that, on demand, they will execute and deliver such other and further
     agreements and/or documents and/or instruments and do such things as the
     Agent in its sole discretion may deem to be necessary or advisable to carry
     out the true intent of this Agreement and of the obligations secured
     hereby.

     SECTION 11.09 Counterparts. This Agreement and any amendment, waivers,
consents or supplements hereto may be executed in several counterparts, any by
different parties hereto in different counterparts, each of which when so
executed shall constitute an original, but all of which, when taken together,
shall constitute but one Agreement.

     SECTION 11.10 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth or
incorporated herein.

     SECTION 11.11 Headings. Section and paragraph headings and the table of
contents are not to be considered part of this Agreement, are included solely
for convenience and are not intended to be full or accurate descriptions of the
contents thereof. Sections and paragraphs mentioned by number only are the
respective sections and paragraphs of this Agreement. The use of the terms
"herein", "hereunder", "hereof", and like terms shall be deemed to refer to this
entire Agreement and not merely to the particular provision in which the term is
contained, unless the context clearly indicates otherwise.

     SECTION 11.12 Successors and Assigns. All Persons shall be deemed to
include the successors or assigns thereof. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective transferees, legal representatives, heirs,
successors and assigns; provided, however, that (a) no Credit Party may

                                       67

assign any of its rights or obligations hereunder or under any other Transaction
Document without the prior written consent of the Agent and each Lender and (b)
the Lenders may assign their respective rights and obligations hereunder only in
accordance with Section 10.11 hereof.

     SECTION 11.13 Gender and Number. Words importing a particular gender mean
and include every other gender and words importing the singular number mean and
include the plural number and vice-versa.

     SECTION 11.14 Exhibits. Exhibits to this Agreement are an integral part of
this Agreement.

     SECTION 11.15 Notification of Addresses, Lending Offices, Etc. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to the Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.

     SECTION 11.16 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Guarantor, each
Borrower, the Lenders, the Agent, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Transaction Documents. Neither the Agent nor any
Lender shall have any obligation to any Person not a party to this Agreement or
other Transaction Documents.

     SECTION 11.17 Equitable Relief. The Guarantor and the Borrowers recognize
that, in the event it fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, the Notes or any of the other
Transaction Documents, any remedy at law may prove to be inadequate relief to
the Lenders or the Agent; therefore, each of the Guarantor and each Borrower
agrees that the Lenders or the Agent, if the Lenders so request, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.

     SECTION 11.18 Notice of Claims; Claims Bar. THE GUARANTOR AND EACH BORROWER
HEREBY AGREES THAT IT SHALL GIVE PROMPT NOTICE OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER OR THE
AGENT, WHICH SUCH CLAIM IS BASED IN LAW OR EQUITY OR ADMIRALTY, ARISING UNDER OR
RELATED TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER TRANSACTION DOCUMENTS
OR TO THE LOANS OR GUARANTOR'S OBLIGATIONS (OR THE COLLATERAL THEREFOR)
CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION TO ACT BY ANY LENDER OR
THE AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH
PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT
SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR
ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY
COURT OR BEFORE ANY GOVERNMENTAL AGENCY.

                                       68

     SECTION 11.19 Waiver of Punitive Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS AGREEMENT, THE GUARANTOR AND EACH BORROWER HEREBY
AGREE THAT IT SHALL NOT SEEK FROM ANY OTHER PARTY HERETO, UNDER ANY THEORY OF
LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

     SECTION 11.20 Consent to Jurisdiction. Any legal suit, action or proceeding
against a Credit Party arising out of or relating to this Agreement or any other
Transaction Document, or any transaction contemplated hereby or thereby, may be
instituted in any federal or state court of competent jurisdiction in New York,
New York and each Credit Party hereby irrevocably submits to the jurisdiction of
any such court in any such suit, action or proceeding. Each Credit Party hereby
waives, to the fullest extent permitted by applicable law, any defense which it
may now or hereafter have based upon lack of personal jurisdiction or venue or
forum non conveniens. Each Credit Party hereby irrevocably appoints and
designates Cardillo & Corbett, having an address at 29 Broadway, New York, New
York 10006, as its true and lawful attorney-in-fact and duly authorized agent
for the limited purpose of accepting service of legal process and each Credit
Party agrees that service of process upon such party shall constitute personal
service of such process such Credit Party. Each Credit Party shall maintain the
designation and appointment of such authorized agent until all Obligations shall
have been paid in full. If such agent shall cease to so act, the Credit Parties
shall immediately designate and appoint another such agent satisfactory to the
Agent and shall promptly deliver to the Agent evidence in writing of such other
agent's acceptance of such appointment.

     SECTION 11.21 Waiver of Jury Trial. THE GUARANTOR, EACH BORROWER, EACH
LENDER AND THE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER TRANSACTION
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.

     SECTION 11.22 Currency Indemnity. All payments to be made by a Borrower or
the Guarantor hereunder shall be made in United States Dollars. To the extent
that any payment or payments made to or for the account of the Agent or any
Lender in a currency other than the currency in which such payment is required
to be made hereunder or under any other Transaction Document (the "Required
Currency") for any reason (pursuant to a judgment or order of a court or
tribunal of any jurisdiction) shall only constitute a discharge to such Borrower
or the Guarantor to the extent of the amount of the Required Currency which the
Agent or such Lender is, acting in good faith and exercising reasonable and
customary diligence, able to purchase in New York, New York with the amount or
amounts so received on the date or dates of receipt by the Agent or such Lender
of such payment or payments (or if such date is not a Business Day on the next
succeeding Business Day). If the amount of the Required Currency which the Agent
or such Lender is so able to purchase falls short of the amount of the Required
Currency due to the Agent or such Lender, the Credit Parties, jointly and
severally, shall indemnify and hold the Agent or such Lender harmless (on an
after tax basis) from and against any loss or damage arising as a result. This
indemnity shall constitute a separate and independent obligation from

                                       69

the other obligations contained in this Agreement, shall give rise to an
independent cause or causes of action, shall apply irrespective of any
indulgence granted by the Agent or such Lender from time to time and shall
continue in full force and effect notwithstanding any judgment or order for a
liquidated sum or sums in respect of the amount due hereunder or under any such
judgment or order. The obligations of each Credit Party under this Section 11.22
shall survive the payment and performance of the Obligations and the termination
of this Agreement.

     SECTION 11.23 Release of Lien. In the event that the Guarantor or a
Borrower sells, leases, transfers, assigns or otherwise disposes of a Vessel in
accordance with Section 7.03, the Agent shall execute and file such instruments
and take such actions, at the expense of the Credit Parties, jointly and
severally, as may be reasonably requested to release such Vessel and the related
collateral from the Lien securing the Obligations.

     SECTION 11.24 Patriot Act. Each Lender hereby notifies the Guarantor and
each Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law on October 26, 2001)) (the "USA Patriot
Act"), it is required to obtain, verify and record information that identifies
each Borrower and the Guarantor, which information includes the name and address
of each Borrower and the Guarantor and other information that will allow such
Lender to identify each Borrower and the Guarantor in accordance with the USA
Patriot Act.

     SECTION 11.25 Time of the Essence. TIME SHALL BE OF THE ESSENCE FOR THE
CLOSING OF THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS AND THE
FUNDING OF THE INITIAL LOANS. THE CLOSING OF THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS AND THE FUNDING OF THE INITIAL LOANS SHALL OCCUR NO LATER
THAN JUNE 30, 2004.

     SECTION 11.26 Obligations Joint and Several. Each Borrower hereby agrees
that it is jointly and severally liable for the Obligations hereunder and under
each of the other Transaction Documents. Each Borrower accepts joint and several
liability for all Obligations hereunder in consideration of the financial
accommodation to be provided by the Lenders to the Borrowers under this
Agreement, and in turn, each Borrower to the other Borrowers, for the mutual
benefit, directly and indirectly, of each other Borrower and in consideration of
the undertakings by the other Borrowers to accept joint and several liability
for the Obligations.

     Each Borrower hereby irrevocably and unconditionally accepts, not merely as
a surety but also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the Obligations,
it being the intention of the parties hereto that all the Obligations shall be
the joint and several obligations of the Borrowers without preferences or
distinction among them.

     If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event, the
other Borrowers will make such payment with respect to, or perform, such
Obligations.

                                       70

     The obligations of each Borrower under the provisions of this Section 11.26
constitute full recourse obligations of such Borrower, enforceable against it to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other Transaction Document
against another Borrower or any other circumstances whatsoever that under
applicable law might constitute a defense to the joint and several Obligations
of such other Borrowers.

     Except as otherwise expressly provided herein, each Borrower hereby waives
notice of acceptance of its joint and several liability, notice of any and all
Obligations incurred hereunder or under any other Transaction Document, notice
of the occurrence of any Default or Event of Default, or of any demand for any
payment hereunder or any other Transaction Document, notice of any action at any
time taken or omitted by the Agent or any Lender under or in respect of any of
the Obligations, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with the Obligations,
this Agreement or any other Transaction Document. Each Borrower hereby assents
to, and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Agent or any
Lender at any time or times in respect of any default by any Borrower or the
Guarantor in the performance or satisfaction of any term, covenant, condition or
provision hereunder or under this Agreement or any other Transaction Document,
any and all other indulgences whatsoever by the Agent or any Lender in respect
of any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any Borrower or the Guarantor. Without limiting the generality of the foregoing,
each Borrower assents to any other action or delay in acting or failure to act
on the part of the Agent or any Lender, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might, but for
the provisions of this Section 11.26, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its
obligations under this Section 11.26, it being the intention of each Borrower
that, so long as any of the Obligations remain unsatisfied, the obligations of
such Borrower shall not be discharged. The Obligations of each Borrower shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
the Guarantor or any other Borrower or any Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower, the Guarantor or any Lender.

     The provisions of this Section 11.26 are made for the benefit of the Agent
and each Lender and their successors and assigns, and may be enforced by such
party from time to time against any of the Borrowers or the Guarantor as often
as occasion therefor may arise and without requirement on the part of the Agent
or any Lender first to marshal any of its claims or to exercise any of its
rights against one or more Borrowers or the Guarantor or to exhaust any remedies
available to it against one or more Borrowers or the Guarantor or to resort to
any other source or means of obtaining payment of any of the Obligations or to
elect any other remedy. The provisions of this Section 11.26 shall remain in
effect until all the Obligations shall have been paid in full and otherwise
fully satisfied. If at any time, any payment, or any part thereof,

                                       71

made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Agent or any Lender upon the insolvency, bankruptcy
or reorganization of any of the Borrowers or the Guarantor, or otherwise, the
provisions of this Section 11.26 will forthwith be reinstated in effect, as
though such payment had not been made.

                            [signature page follows]

                                       72

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

                                                    GMAC COMMERCIAL FINANCE LLC,
                                                    as Agent and Lender

                                                    By: /s/ Amina Kirtman
                                                        ------------------------
                                                        Name:  Amina Kirtman
                                                        Title: Vice President

                                Credit Agreement

                                                 TBS INTERNATIONAL LIMITED,
                                                 the Guarantor

                                                 By: /s/ Ferdinand V. Lepere
                                                     ---------------------------
                                                     Name:  Ferdinand V. Lepere
                                                     Title: Attorney-in-Fact

                                                 HENLEY MARITIME CORP.,
                                                 as a Borrower

                                                 By: /s/ Ferdinand V. Lepere
                                                     ---------------------------
                                                     Name:  Ferdinand V. Lepere
                                                     Title: Attorney-in-Fact

                                                 VERNON MARITIME CORP.,
                                                 as a Borrower

                                                 By: /s/ Ferdinand V. Lepere
                                                     ---------------------------
                                                     Name:  Ferdinand V. Lepere
                                                     Title: Attorney-in-Fact

                                                 ARDEN MARITIME CORP.,
                                                 as a Borrower

                                                 By: /s/ Ferdinand V. Lepere
                                                     ---------------------------
                                                     Name:  Ferdinand V. Lepere
                                                     Title: Attorney-in-Fact

                                Credit Agreement

                                   APPENDIX A
                                  (DEFINITIONS)

     "Additional Loan" means the provision of capital made by a Lender pursuant
to Section 2.02 of the Agreement.

     "Additional Loan Commitment" means, for each Lender, the amount set for the
opposite such lender's name in Schedule I to the Credit Agreement directly below
the column entitled "Additional Loan Commitment", as same may be increased from
time to time pursuant to Section 2.02 of the Agreement and reduced from time to
time pursuant to Sections 2.06 and/or 2.07 of the Agreement or adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 10.11(a) of the Agreement.

     "Additional Loan Note" shall have the meaning provided in Section 2.02(d)
of the Agreement.

     "Additional Loan Reduction Date" means each of the dates determined
pursuant to Section 2.06(b) of the Agreement.

     "Additional Unfunded Amount" has the meaning set forth in Section 2.02(e)
of the Agreement.

     "Adjusted LIBOR" means, for each Interest Period in respect of a LIBOR
Loan, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:

                Adjusted LIBOR =               LIBOR
                                 --------------------------------
                                    1.00 - Reservice Percentage

     The Adjusted LIBOR shall be adjusted automatically as of the effective date
of any change in the Reserve Percentage.

     "Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person, or (ii) that directly or indirectly owns more than
five percent (5%) of the voting securities of such Person. A Person shall be
deemed to "control" another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.

     "Agent" has the meaning set forth in the initial paragraph of the
Agreement.

     "Agent-Related Persons" means the Agent and any successor Agent appointed
pursuant to Section 10.09 of the Agreement, together with its Affiliates and the
officers, directors, employees, agents and attorneys-in-fact of such Person and
their respective Affiliates.

     "Aggregate Loan Commitment" means the aggregate of the Initial Loan
Commitments and the Additional Loan Commitments for the Lenders, which on the
Closing Date shall equal Fifteen Million Dollars ($15,000,000.00), subject to
adjustment as set forth in Sections 2.02, 2.06 and 2.07 of the Agreement.

     "Agreement" means the Credit Agreement, dated as of June 1, 2004, among the
Borrowers, the Guarantor, the Lenders and the Agent, as amended, supplemented or
otherwise modified from time to time.

     "Applicable Margin" means, with respect to each Loan, the margin set forth
below:

-------------------------------------------
    LIBOR MARGIN         BASE RATE MARGIN
-------------------------------------------
INITIAL   ADDITIONAL   INITIAL   ADDITIONAL
 LOANS       LOANS      LOANS       LOANS
-------------------------------------------
 3.70%       TBD*       3.80%       TBD*
-------------------------------------------

*The Applicable Margin for any Additional Loans shall be determined in
accordance with Section 2.02 of the Agreement.

     "Appraiser" means any of Fearnleys A.S., R.S. Platou Shipbrokers A.S.,
Bassoe Offshore A.S., H. Clarkson Ltd., Simpson Spence Young Ltd., Mallory Jones
Lynch & Flynn, Inc., Compass Maritime Services LLC, Lorentzen Stemoco
Shipbrokers A.S., Braemar Shipbrokers Ltd., Barry Rogliano Salles, Poten &
Partners, Inc., Jaques Pierot & Sons, DuFour Laskay & Strouse, Inc. and Nobel
Denton Marine, together with any other Person not affiliated with the Borrower
and acceptable to the Agent engaged in the business of appraising vessels.

     "Approved Jurisdiction" means the Republic of Panama and The Philippines,
or such other jurisdiction as may be acceptable to the Requisite Lenders.

     "Asset Coverage Ratio" means, at any time, the ratio of (x) the aggregate
outstanding principal amount of the Loans to (y) the aggregate Fair Market Value
of the Vessels at such time.

     "Assignee" shall have the meaning provided in Section 10.11 (a) of the
Agreement.

     "Assignment and Acceptance" shall have the meaning provided in Section
10.11 (a) of the Agreement.

     "Assignment of Charter" means, with respect to a Vessel, the assignment
between a Borrower and the Agent (on behalf of the Lenders), as amended,
supplemented, restated, renewed and otherwise modified from time to time,
together with any documents contemplated thereby or executed pursuant thereto,
whereby such Borrower assigns to the Agent (on behalf of the Lenders) all of its
right, title and interest in, to and under each Charter to such Vessel.

     "Assignment of Earnings and Insurances" means, with respect to a Vessel,
one or more assignments between a Liner, manager, bareboat charterer, Borrower,
Guarantor or any other Person that has a leasehold interest or ownership
interest in a Vessel or control over the Earnings or Insurances with respect to
such Vessel and the Agent, on behalf of the Lenders, as the same

                                        2

from time to time may be amended, restated, supplemented, renewed or otherwise
modified, in each case in accordance with the terms thereof, pursuant to which
such Person assigns to the Agent, on behalf of the Lenders, all of its right,
title and interest in, to and under the Earnings and Insurances with respect to
such Vessel.

     "Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

     "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended and in effect from time to time.

     "Base Rate" means as of the second Business Day immediately preceding a
Drawdown Date for a Base Rate Loan, a rate per annum equal to the Five-Year US
Treasury Note Yield in effect on such day.

     "Base Rate Loan" means any Loan designated as such by a Borrower in the
related Drawdown Request at the time of the incurrence thereof, conversion or
continuation thereto, which Loan shall bear interest based on the Base Rate.

     "Borrower" means any of, and "Borrowers" means all of, Henley Maritime
Corp., Vernon Maritime Corp. and Arden Maritime Corp., and each other Person
that may become a "Borrower" under the Agreement pursuant to a supplement
thereto (in form and substance satisfactory to the Agent and the Lenders).

     "Business Day" means any day which is not a Saturday, Sunday or legal
holiday or any other day on which the New York Stock Exchange, the Federal
Reserve Bank of New York or banking institutions in New York, New York USA or
Atlanta, Georgia USA are authorized or required by law, regulation or executive
order to close.

     "Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as same may be amended from time to time.

     "Change in Law" means (a) the adoption of any law, rule or regulation after
the Closing Date or a Drawdown Date, (b) any change in law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the Closing Date or a Drawdown Date or (c) compliance by any Lender with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the Closing Date or a Drawdown
Date.

                                        3

     "Charter" means each leasing or hiring of a Vessel, including, without
limitation, each bareboat charter and time charter.

     "Closing Date" means June 30, 2004.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of the
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.

     "Collateral" means the Vessels, the Earnings on the Vessels, the Charters,
the Guarantees, the Insurances on the Vessels, the Mortgages, any Hedging
Agreements, the Pledged Collateral from time to time subject to the Pledge
Agreement and any other property in which a security interest is created in
favor of the Agent for the benefit of the Lenders to secure the payment and
performance of the Obligations of the Borrowers and the Guarantor under the
Credit Agreement or the other Transaction Documents, including, without
limitation, all rights, powers, and options (but none of the obligations) of the
Borrowers with respect thereto (including, without limitation, the immediate and
continuing right to claim for, collect, receive, and give receipts for any
income and proceeds in respect of any of the related Collateral and all other
moneys payable in respect thereof), to give and receive notices and other
communications, to make waivers, amendments or other agreements, to exercise all
rights and options, to bring judicial proceedings in the name of a Borrower or
otherwise and generally to do and receive anything that a Borrower is or may be
entitled to do or receive.

     "Commitment" means either of and "Commitments" means the Initial Loan
Commitment and the Additional Loan Commitment.

     "Compulsory Acquisition" means, with respect to a Vessel, the requisition
for title or other compulsory acquisition of such Vessel (including, without
limitation, title to or use of such Vessel, but not including requisition for
hire), condemnation, capture, seizure, detention or confiscation of such Vessel
by any Governmental Authority or by Persons acting or purporting to act on
behalf of any Governmental Authority.

     "Consolidated Funded Debt" means, with respect to any Person as of any date
of determination, the sum, without duplication, of (i) the total amount of
Indebtedness of such Person and its Subsidiaries, plus (ii) the total amount of
Indebtedness of any other Person, to the extent that such Indebtedness has been
Guaranteed by such Person or one or more of its Subsidiaries, plus (iii) the
aggregate value of all Disqualified Shares of such Person, in each case,
determined on a consolidated basis in accordance with GAAP.

     "Consolidated Interest Expense" means, for any period, the sum of:

          (A)  the total interest expense of the Borrowers and the Guarantor
               plus, to the extent not otherwise included in such interest
               expense (without duplication), and to the extent incurred by the
               Borrowers or the Guarantor:

               (1)  interest expense attributable to Capital Lease Obligations,
                    the interest expense attributable to leases constituting
                    part of a sale and

                                        4

                    leaseback transaction and the interest portion of rent
                    expense associated with Attributable Debt in respect of the
                    relevant lease giving rise thereto, determined as if such
                    lease were a capitalized lease in accordance with GAAP and
                    the interest component of any deferred payment obligations;

               (2)  amortization of debt discount but not debt issuance costs;

               (3)  non-cash interest expense;

               (4)  amortization of commissions, discounts and other fees and
                    charges owed with respect to letters of credit and bankers'
                    acceptance financing;

               (5)  interest accruing on any Indebtedness of any other Person to
                    the extent such Indebtedness is Guaranteed by (or secured by
                    the assets of) a Borrower or the Guarantor;

               (6)  net costs associated with Hedging Obligations (excluding
                    amortization of fees paid at the time of entering into such
                    Hedging Obligations); plus

          (B)  all dividends, whether paid or accrued and whether or not in
               cash, on any series of Preferred Shares of a Person or any of its
               Subsidiaries payable to a Person other than a Borrower or the
               Guarantor; plus

          (C)  cash contributions to any employee stock ownership plan or other
               trust for the benefit of employees to the extent such
               contributions are used by such plan or trust to pay interest or
               fees to any Person (other than a Borrower and/or the Guarantor)
               in connection with Indebtedness incurred by such plan or trust to
               purchase share capital of a Borrower or the Guarantor.

     "Consolidated Net Income" means, for any period for any Person, the net
income (loss) of such Person and its consolidated Subsidiaries determined in
accordance with GAAP; provided, however, that there shall not be included in
determining such Consolidated Net Income:

          (A)  any net income (or loss) of any Subsidiary if at the date of
               determination the making of distributions or the payment of
               dividends by such Subsidiary are not permitted without any prior
               governmental approval (that has not been obtained) or, directly
               or indirectly, by operation of the terms of its charter or other
               organizational document or any agreement, instrument, judgment,
               decree, order, statute, rule or governmental regulation
               applicable to that Subsidiary or its stockholders except:

               (i)  the Guarantor's equity in the net income of any such
                    Subsidiary for such period shall be included in such
                    Consolidated Net Income up to the aggregate amount of cash
                    distributed by such Subsidiary

                                        5

                    during such period to the Guarantor or a Subsidiary thereof
                    as a dividend or other distribution (subject, in the case of
                    a dividend to a Subsidiary, to the limitation contained in
                    this clause); and

               (ii) the Guarantor's equity in a net loss of any such Subsidiary
                    for such period shall be included in determining such
                    Consolidated Net Income;

          (B)  any gain or loss, together with any related provision for taxes
               on such gain or loss, realized upon (i) a sale or other
               disposition of any assets of the Guarantor, its consolidated
               Subsidiaries or any other Person (including pursuant to any sale
               and leaseback transaction) which is not sold or otherwise
               disposed of in the ordinary course of business, (ii) the sale or
               other disposition of any securities of any Person not sold or
               otherwise disposed of in the ordinary course of business or (iii)
               the extinguishment of any Indebtedness of any Person;

          (C)  any extraordinary gain or loss, together with any related
               provision for taxes on such extraordinary gain or loss.

     "Counterparty" means any Lender or any Affiliate of a Lender who enters
into a Hedging Agreement with a Borrower.

     "Credit Party" means either of and "Credit Parties" means each Borrower,
Westbrook and the Guarantor.

     "Default" shall mean an Event of Default or any condition or event which,
with notice or lapse of time or both, would constitute an Event of Default.

     "Defaulting Lender" means any Lender that shall have failed to honor its
Commitment as described in Section 2.01 or Section 2.02 of the Agreement.

     "Disqualified Shares" means any Share Capital that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Share Capital), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Share Capital, in whole or in part, on or prior to the date that
is 91 days after the Maturity Date.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States (expressed in dollars).

     "Drawdown Date" means each Business Day designated by a Borrower in a
Drawdown Request, as the day on which a Loan, subject to the terms and
conditions of the Agreement, is requested to be made by the Lenders to such
Borrower.

     "Drawdown Request" means, with respect to any borrowing, conversion or
continuation of a Loan, a written request, substantially in the form of Exhibit
C to the Credit Agreement

                                        6

executed by an Executive Officer of a Borrower wherein such Borrower indicates,
among other things, (a) whether the Loan is an Initial Loan or an Additional
Loan, (b) the proposed Drawdown Date, (c) the amount of such Loan, (d) the
initial Interest Period for such Loan, (e) whether such Loan is a Base Rate Loan
or a LIBOR Loan, and (f) the disbursement instructions therefor.

     "Earnings" means and includes all present and future moneys and claims
which are earned by or become payable to or for the account of a Borrower or the
Guarantor in connection with the operation or ownership of a Vessel, including,
but not limited to, freights, passage and hire moneys, remuneration for salvage
and towage services, demurrage and detention moneys, all present and future
moneys and claims payable to a Borrower or the Guarantor in respect of any
breach or variation of any charterparty or contract of affreightment in respect
of a Vessel, and all moneys and claims payable to a Borrower or the Guarantor in
respect of the requisition for hire of a Vessel.

     "EBITDA" means, with respect to one or more Borrowers and/or the Guarantor
for any period, as reported in the financial statements most recently delivered
to the Agent, the Consolidated Net Income of such Person for such period plus
the following to the extent deducted in calculating such Consolidated Net
Income:

          (A)  all Federal, state and local and all foreign income tax expense;

          (B)  Consolidated Interest Expense;

          (C)  depreciation expense and amortization expense; and

          (D)  the sum of any non-cash costs, charges or expenses attributable
               to the accrual of or reserve for cash charges in any future
               period for pension liabilities of a Borrower and/or the
               Guarantor.

Notwithstanding the foregoing, amounts relating to a Borrower shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income (or loss) of such Borrower was included in
calculating Consolidated Net Income.

     "Eligible Lender" means and include a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).

     "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.

                                        7

     "Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on the
Guarantor or any of its Subsidiaries, relating to the environment, employee
health and safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 USC. Section 1251 et seq.; the
Toxic Substances Control Act, 15 USC. Section 2601 et seq.; the Clean Air Act,
42 USC. Section 7401 et seq.; the Safe Drinking Water Act, 42 USC. Section 3803
et seq.; the Oil Pollution Act of 1990, 33 USC. Section 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC. Section
11001 et seq.; the Hazardous Material Transportation Act, 49 USC. Section 1801
et seq.; and the Occupational Safety and Health Act, 29 USC. Section 651 et seq.
(to the extent it regulates occupational exposure to Hazardous Materials); any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.

     "Equity Interests" means Share Capital and all warrants, options or other
rights to acquire Share Capital.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of the Agreement, and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

     "ERISA Affiliate" means each person (as defined in Section 3(9) of ERISA)
which together with the Guarantor or a Subsidiary of the Guarantor would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Guarantor or a Subsidiary of
the Guarantor being or having been a general partner of such person.

     "Event of Default" means any of the events described in Article IX of the
Agreement or in a Note.

     "Excluded Taxes" any tax imposed on or measured by the net income or
profits of a Lender, or any franchise tax based on the net income or net profits
of a Lender, in either case pursuant to the laws of (a) the United States, (b)
any jurisdiction (or political subdivision thereof) of which the Agent or any
other Lender, as the case may be, is a citizen or is resident or in which such
Lender has a permanent establishment (or is otherwise engaged in the active
conduct of its banking business through an office or a branch) which is such
Lender's applicable Lending Office, (c) the jurisdiction (or any political
subdivision thereof) in which the Agent or any other Lender is organized, and
(d) any jurisdiction (or political subdivision thereof) in which the Agent or
any other Lender is presently doing business which taxes are imposed solely as a
result of doing business in such jurisdiction.

     "Executive Officer" means, with respect to a Person, any officer having the
authority to bind such Person pursuant to the terms of the constitutive
documents of such Person.

                                        8

     "Existing Charter" means, with respect to the Tayrona Princess, the
charter, dated March 15, 2002, between Arden Maritime Corp., as charterer, and
Grincor Shipping Services (Pty) Ltd. ("Grincor"), as owner, and, with respect to
the Mohegan Princess, the charter, dated March 15, 2002, between Vernon Maritime
Corp., as charterer, and Grincor, as owner, each as amended by Addendum No. 1
and Addendum No. 2, each dated July 12, 2002, among Grincor, as previous owner,
Arden and Vernon, as charterers, and Cape Shipping Limited, as new owners.

     "Facility" means the Fifteen Million Dollar ($15,000,000) secured credit
facility created pursuant to the Agreement consisting of the Initial Loans and
together with the maximum principal amount that may be advanced as Additional
Loans.

     "Fair Market Value" means, with respect to a Vessel, the fair market sale
value (with no value given to pooling arrangements) as of a specified date of
such Vessel, determined on a standalone basis free and clear of any Liens, that
would be obtained in an arm's-length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined by an Appraiser selected by the Agent at the
expense of the Guarantor; provided, however, that the Guarantor shall have the
option to select an additional Appraiser to make such determination and, in such
case, the "Fair Market Value" shall be the average of the fair market sale value
determined by the Agent's Appraiser and the fair market sale value determined by
the Guarantor's Appraiser.

     "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.

     "Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.

     "Filipino Bareboat Charter" means any one or more of or all of (as the
context may require) of (x) the Standard Bareboat Charter, dated April 12, 2004,
between Henley and Viking, (y) the Standard Bareboat Charter, dated June 2,
2004, between Vernon and Overseas Bulk and/or (z) the Standard Bareboat Charter,
dated June 2, 2004, between Arden and Overseas Bulk, in each case as amended,
supplemented, restated, renewed and otherwise modified from time to time.

     "Five-Year US Treasury Note Yield" means the "5-Year US Treasury Note"
yield quoted by the Wall Street Journal at the opening of business in Atlanta,
Georgia USA as of the relevant date of determination.

     "Fixed Charge Coverage Ratio" means as of any date of determination the
ratio of (x) EBITDA to (y) Interest Expense plus Current Portion of Long-Term
Debt (including, without limitation, any Capital Lease Obligations) appearing on
the consolidated financial statements of the Guarantor prepared in accordance
with GAAP.

                                        9

     "Fixed Interest Rate" means a rate per annum equal to the Base Rate for the
relevant Interest Period plus the Applicable Margin (computed on the basis of a
year of 365 days for the actual number of days--including the first day but
excluding the last day--occurring in the period for which such interest is
payable).

     "Floating Interest Rate" means a rate per annum equal to the Adjusted LIBOR
for the relevant Interest Period plus the Applicable Margin (computed on the
basis of a year of 360 days for the actual number of days--including the first
day but excluding the last day--occurring in the period for which such interest
is payable).

     "Foreign Pension Plan" means any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States by the Guarantor or any one or more of its
Subsidiaries primarily for the benefit of employees of the Guarantor or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

     "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States consistently applied, except as disclosed in
the financial statements of the Guarantor.

     "GMAC CF" has the meaning set forth in the initial paragraph of the
Agreement.

     "Governmental Authority" means any public body, government, parliament,
legislature, regulatory authority, agency, commission, tribunal, department,
commission, board, instrumentality, court, arbitration board or arbitrator or
other law, regulation or rule making entity (including a Minister of the Crown)
having or purporting to have jurisdiction over, including, without limitation,
any country in which any Credit Party is organized, continued, amalgamated,
merged or otherwise created or established or in which any Credit Party carries
on business or holds property, or any province, territory, state, municipality,
district or political subdivision of any such country or of any such state,
province or territory of such country.

     "Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

     "Guarantee Obligation" shall have the meaning provided in Section 8.01(a)
of the Agreement.

     "Guarantor" means TBS International Limited, together with its successors
and assigns.

     "Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous

                                       10

materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," "dangerous goods," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority under
Environmental Laws.

     "Hedging Agreement" means any agreement entered into by and between one or
more Borrowers and the Agent or any Lender or any Affiliate of the Agent or the
Lender pursuant to which such Borrower(s) have the ability to reduce exposure to
currency or interest rate risks, as any such Hedging Agreement from time to time
may be amended, restated, supplemented, renewed or otherwise modified.

     "Hedging Obligations" means, with respect to any specified Person, the net
amount of the obligations of such Person under interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, foreign currency
exchange agreements, commodity price protection agreements and other agreements
or arrangements designed to protect such Person against fluctuations in interest
rates, foreign currency exchange rates and commodity prices.

     "Indebtedness" means, with respect to a Person, any obligation of such
Person, whether or not contingent:

          (A)  in respect of borrowed money;

          (B)  evidenced by bonds, notes, debentures, promissory notes, loan
               agreements or similar instruments, letters of credit or
               reimbursement agreements in respect of letters of credit (other
               than obligations with respect to letters of credit securing
               obligations entered into in the ordinary course of business of
               such Person to the extent such letters of credit are not drawn
               upon or, if and to the extent drawn upon, such drawing is
               reimbursed no later than the tenth Business Day following payment
               on the letter of credit);

          (C)  in respect of bankers' acceptances;

          (D)  representing Capital Lease Obligations;

          (E)  representing the balance deferred and unpaid of the purchase
               price of any property, except any such balance that constitutes
               an accrued expense or trade payable;

          (F)  representing any Hedging Obligations; or

          (G)  representing the maximum fixed repurchase price of Disqualified
               Shares;

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is

                                       11

assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be:

          (A)  in the case of any Indebtedness issued with original issue
               discount, the accreted value of the Indebtedness; and

          (B)  in the case of any other Indebtedness, the principal amount of
               the Indebtedness, together with any interest on the Indebtedness
               that is more than 30 days past due.

     "Indemnified Liabilities" shall have the meaning provided in Section 3.06
of the Agreement.

     "Indemnified Party" means each of and "Indemnified Parties" means
collectively the Agent and each Lender and each of their respective Affiliates,
directors, officers, employees and agents and any Person who controls any of
them within the meaning of the federal, state and foreign securities laws.

     "Indemnified Taxes" means any Taxes (including, without limitation, income
taxes withheld at source) other than Excluded Taxes.

     "Initial Loan Commitment" means, for each Lender, the amount set for the
opposite such Lender's name in Schedule I to the Credit Agreement directly below
the column entitled "Initial Loan Commitment", as same may be reduced from time
to time pursuant to Sections 2.06 and/or 2.07 of the Agreement or adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 10.11(a) of the Agreement.

     "Initial Loan Note" shall have the meaning provided in Section 2.01(e) of
the Agreement.

     "Initial Loan Reduction Date" means each of the dates determined pursuant
to the table set forth in Section 2.06(a) of the Agreement.

     "Initial Loans" means the provision of capital made by a Lender pursuant to
Section 2.01 of the Agreement.

     "Initial Unfunded Amount" shall have the meaning set forth in Section
2.01(f) of the Agreement.

     "Insurances" includes all policies and contracts of insurance whatsoever
(which expression includes all entries of a Vessel in a protection and indemnity
or war risks association) which are from time to time taken out or entered into
in respect of a Vessel and their Earnings or otherwise in connection with a
Vessel.

     "Insured Value" means, with respect to a Vessel, the greater of (x) the
full commercial value of such Vessel and (y) 110% of the Fair Market Value of
such Vessel, in each case, as

                                       12

measured at the time of each renewal, or such greater sums as such Shipowner may
desire and are enforceable.

     "Interest Expense" means, with respect to the Guarantor for any period, the
Consolidated Interest Expense for each of the Guarantor's most recently ended
four fiscal quarters, as reported in the financial statements most recently
delivered to the Agent.

     "Interest Period" means, with respect to any Loan, each calendar month,
commencing on the Drawdown Date, with respect to the first Interest Period for
such Loan, and ending on the last day of the calendar month in which such Loan
was made, and with respect to all other Interest Periods, each subsequent
calendar month.

     "Interest Rate" means either or both (as the context may require) a
Floating Interest Rate and/or a Fixed Interest Rate.

     "Investment" means any direct or indirect advance, loan or other extension
of credit (including by way of guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of capital stock (or other equity interest),
Indebtedness or other similar instruments.

     "ISM Code" shall have the meaning provided in Section 6.20(b) of the
Agreement.

     "Lender" and "Lenders" have the meanings set, forth in the initial
paragraph of the Agreement.

     "Lending Office" means, with respect to any Lender, the office or offices
of the Lender specified opposite its name on the applicable signature page to
the Loan Agreement, or such other office or offices of the Lender as it may from
time to time notify the Guarantor and the Agent.

     "Liner" means one or more of the following (as the context may require):
TBS North America Liner, Ltd., TBS Pacific Liner, Ltd., TBS Latin America Liner,
Ltd., TBS Eurolines, Ltd., TBS Middle East Carriers, Ltd. and TBS Ocean
Carriers, Ltd.

     "LIBOR" means, with respect to an Interest Period and any Loan to be made,
continued as or converted into a LIBOR Loan, the rate for a period of time
comparable to the numbers of days in such Interest Period which appears on the
Telerate Page 3750 (or such other page as may replace the page on that service
for the purpose of displaying London inter-bank market rates) at or about 11:00
a.m., London time, on the date that is two London Banking Days preceding the
date of calculation. If, at any time of determination, two such offered rates
appear on the Telerate Page 3750, LIBOR will be the arithmetic mean of such
offered rates (rounded to the nearest .0001 percentage point). If, at any time
of determination, the Telerate Page 3750 or any replacement page is not
available, LIBOR will be calculated as the average (rounded upward, if necessary
to the next higher 1/16 of 1%) of the respective rates per annum at which
deposits in United States dollars are offered to each of three reference banks
of internationally recognized standing selected by the Agent in the London
interbank market for Dollar deposits of amounts comparable to the principal
amount of the LIBOR Loan to which such LIBOR rate is to be

                                       13

applicable with maturities comparable to the Interest Period for which such
LIBOR rate will apply at approximately 11:00 a.m., London time, on the date that
is two London (US$) Banking Days preceding the date of calculation. The
determination of LIBOR by the Agent shall be conclusive in the absence of
manifest error.

     "LIBOR Loan" means a Loan that bears interest based on Adjusted LIBOR.

     "Lien" means mean any mortgage, pledge, hypothecation, assignment, charter,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other applicable personal property security legislation in any jurisdiction
or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).

     "Loan" means either of, and "Loans" means both of the Initial Loans and the
Additional Loans.

     "London Banking Day" means any day on which dealings in deposits in United
States dollars are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in United States dollar deposits) in London and New York.

     "Make-Whole Amount" means, with respect to the Initial Loans, a prepayment
premium equal to (i) three percent (3.0%) of the principal amount prepaid if
prepaid during the period from the initial Drawdown Date to the first
anniversary of the initial Drawdown Date, (ii) two percent (2.0%) of the
principal amount prepaid if prepaid during the period from the first anniversary
of the initial Drawdown Date to the second anniversary of the initial Drawdown
Date, or (iii) one percent (1.0%) of the principal amount prepaid if prepaid
during the period from the second anniversary of the initial Drawdown Date to
the date that is third anniversary of the initial Drawdown Date; provided that,
for the avoidance of doubt, no optional prepayment premium with respect to the
Initial Loans shall be payable if the principal amount prepaid is prepaid on or
after the date that is 36 months after the initial Drawdown Date; provided
further that the Borrower, the Lenders and the Agent shall determine the amount
of any prepayment premium payable by the Borrower in connection with any
Additional Loans.

     "Margin Stock" shall have the meaning provided in Regulation U of the Board
of Governors of the Federal Reserve System.

     "Material Adverse Change" means any circumstance or event or any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
any Transaction Document, (b) is or could reasonably be expected to be material
and adverse to the condition (financial or otherwise) or business operations of
any Borrower, Westbrook or the Guarantor, individually or taken together as a
whole, (c) materially impairs or could reasonably be expected to materially
impair the ability of any Borrower, Westbrook or the Guarantor to perform their
respective obligations under the Transaction Documents, or (d) materially
impairs or could reasonably be expected to materially

                                       14

impair the ability of the Agent to enforce any of the Transaction Documents or
any Lender to enforce its Note.

     "Maturity Date" means, with respect to the Initial Loans, the fifth (5th)
anniversary of the Closing Date or if such date is not a Business Day, the
Business Day immediately preceding such date and, with respect to any Additional
Loans, the date specified in the schedule delivered pursuant to Section 2.02(a)
of the Agreement.

     "Memorandum of Three Party Agreement" means any one or more of or all of
(as the context may require) of (x) the Memorandum of Three Party Agreement,
dated April 12, 2004, among PacRim, Henley and Viking, (y) the Memorandum of
Three Party Agreement, dated June 2, 2004, among PacRim, Vernon and Overseas
Bulk and/or (z) the Memorandum of Three Party Agreement, dated June 2, 2004,
among PacRim, Arden and Overseas Bulk, in each case as amended, supplemented,
restated, renewed and otherwise modified from time to time.

     "Minimum Borrowing Amount" means, for Loans, $1,000,000 and integral
multiples of $100,000 thereafter.

     "Mohegan" or "Mohegan Princess" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 29th day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

     "Mortgage" means, with respect to a Vessel, the first priority naval
registered ship mortgage on such Vessel substantially in the form of Exhibit E
to the Agreement, granted by the related Borrower to the Agent, on behalf of the
Lenders, as such Mortgage from time to time may be amended, restated,
supplemented, renewed or otherwise modified in accordance with the terms of such
Mortgage.

     "Non-Defaulting Lender" means, at any time, each Lender other than any
Defaulting Lender at such time.

     "Note" means either of, and "Notes" means both of, an Initial Loan Note and
an Additional Loan Note, as the same from time to time may be amended, restated,
supplemented, renewed or otherwise modified.

     "Obligations" means any and all of the obligations of each Borrower and/or
the Guarantor, whether due or to become due, matured or unmatured, liquidated or
unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, in each case arising under
the Agreement or under any Note, Hedging Agreement, under any of the Transaction
Documents or under any currency hedging agreement arranged by a Lender or an
Affiliate of a Lender. This term includes, without limitation, all principal,
interest (including interest that accrues after the commencement by or against
any Borrower or the Guarantor of any action under the Bankruptcy Code), fees,
including, without limitation, any and all arrangement fees, loan fees, agent
fees and any and all other fees, expenses, costs or other sums (including
attorney costs) chargeable to any Borrower or the Guarantor under any of the
Transaction Documents.

                                       15

     "Originating Lender" shall have the meaning provided in Section 10.11(d) of
the Agreement.

     "Other Taxes" means any and all current or future stamp or documentary
taxes or other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under the Notes or from the execution, delivery,
registration, enforcement, of or otherwise with respect to, any Transaction
Document.

     "Overdue Rate" means, with respect to a Note, a rate per annum for each day
from the date of a default in any payment hereunder until such payment shall be
paid in full equal to (a) in the case of any LIBOR Loan, the rate that would be
applicable under the Agreement to such LIBOR Loan plus two percent (2.0%) per
annum, and (b) in the case of any other overdue amount, the rate that would be
applicable under the Agreement to a Base Rate Loan, plus two percent (2.0%) per
annum.

     "Overseas Bulk" means Overseas Bulk Transport, Inc., a company organized
under the laws of the Philippines, together with its successors and assigns.

     "PacRim" means Pacific Rim Shipping Corp., a company organized under the
laws of the Marshall Islands, together with its successors and assigns.

     "Participant" shall have the meaning provided in Section 10.11(d) of the
Agreement. "Payment Date" means the last Business Day of each Interest Period.

     "PBGC" means, the Pension Benefit Guaranty Corporation.

     "Permitted Encumbrances" means: (a) liens or rights in rem for current
crew's wages, for general average or salvage (including contract salvage) or for
wages of stevedores employed by the charterer, the operator, agent or master of
a Vessel which in each case (i) are unclaimed or (ii) shall not have been due
and payable for ten (10) days after termination of a voyage; (b) liens or rights
in rem for repairs or incident to current operations of a Vessel (other than
those referred to in clause (a) above), but only to the extent in each case that
such liens are based on claims not yet delinquent and do not involve any risk of
a sale, forfeiture, hindrance to operation or loss of such Vessel; (c) liens
covered by valid and collectible policies of insurance held with respect to a
Vessel and meeting the requirements of the related Mortgage; (d) the lien of the
Mortgages and the other Transaction Documents; and (e) any other liens expressly
permitted by any of the Transaction Documents.

     "Permitted Pledge Liens" means:

          (A)  Liens for taxes, assessments or other governmental charges or
               levies not yet due or which are being contested in good faith by
               appropriate action or proceedings and with respect to which
               adequate reserves are being maintained in accordance with GAAP;

          (B)  Liens resulting from operation of law with respect to any
               judgments or orders not constituting a Default or not having a
               Material Adverse Change; and

                                       16

          (C)  Liens created by the Pledge Agreement and the other Transaction
               Documents.

     "Person" means an individual, a corporation, a partnership, an association,
a trust, a limited liability company or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

     "Plan" means any pension plan, as defined in Section 3(2) of ERISA, which
is maintained or contributed to by (or to which there is an obligation to
contribute of), the Guarantor or a Subsidiary of the Guarantor or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Guarantor, a Subsidiary of the Guarantor or an ERISA
Affiliate maintained, contributed or had an obligation to contribute to such
plan.

     "Pledge Agreement" means the Pledge Agreement, dated as of June 1, 2004,
from Westbrook to the Agent on behalf of the Lenders, as the same may be
amended, restated, supplemented, renewed or otherwise modified from time to time
in accordance with the terms thereof.

     "Pledged Collateral" has the meaning set forth in the Pledge Agreement.

     "Pledged Interests" means, collectively, (a) the Equity Interests described
in Annexes A of the Pledge Agreement and (b) each Equity Interest pledged
pursuant to Section 1(b) of the Pledge Agreement from time to time.

     "Preferred Shares" of any Person means any Equity Interests of such Person
that have any rights which are preferential to the rights of any other Equity
Interests of such Person with respect to dividends or redemptions or upon
liquidation.

     "Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York, New York; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.

     "Prohibited Jurisdiction" means, any country or jurisdiction, from time to
time, that is the subject of a prohibition order (or any similar order or
directive), sanctions or restrictions promulgated or administered by any
Governmental Authority.

     "Prohibited Person" means, any Person who is the subject of a prohibition
order (or any similar order or directive), sanctions or restrictions promulgated
or administered by any Governmental Authority.

     "Proportionate Share" means (a) with respect to the Initial Loans and a
Lender, a fraction expressed as a percentage, the numerator of which shall be
the amount of such Lender's Initial Loan Commitment and the denominator of which
shall be the Aggregate Initial Loan Commitment and (b) with respect to
Additional Loans and a Lender, a fraction expressed as a percentage, the
numerator of which shall be the amount of such Lender's Aggregate Loan
Commitment and the denominator of which shall be the Aggregate Loan Commitment
or, if the Aggregate Loan Commitment is terminated, a fraction expressed as a
percentage the numerator

                                       17

of which is the outstanding principal balance of such Lender's Loans and the
denominator of which is the aggregate outstanding principal balance of all
Loans.

     "Real Property" means all of the right, title and interest of any Person in
and to land, improvements and fixtures, including leaseholds.

     "Reduction Amount" shall have the meaning set forth in Section 2.06(c) of
the Agreement.

     "Reduction Date" means any Initial Loan Reduction Date or Additional Loan
Reduction Date.

     "Register" shall have the meaning provided in Section 2.10(a) of the
Agreement.

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

     "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.

     "Reportable Event" means an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .22, .23,
..25, .27, or .28 of Section 4043 of the Pension Benefit Guaranty Corporation
Regulations.

     "Required Currency" shall have the meaning provided in Section 11.22 of the
Agreement.

     "Restricted Payment" shall have the meaning provided in Section 7.07 of the
Agreement.

     "Requisite Lenders" means any combination of Lenders whose combined
Proportionate Share (and voting interest with respect thereto) of all amounts
outstanding under the Credit Agreement is greater than 50% of all such amounts
outstanding.

     "Reserve Percentage" means with respect to Adjusted LIBOR and an Interest
Period, the maximum reserve percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of one percent (0.01%)) in effect on the date LIBOR for
such Interest Period is determined (whether or not applicable to any Lender)
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding having a term comparable to such Interest Period.

     "Responsible Officer" means, with respect to a Credit Party, the Chief
Financial Officer, the Chief Executive Officer (or any person having a similar
capacity), any senior vice-president, director of treasury and finance and any
other officer designated by the Chief Financial Officer of such Credit Party
acceptable to the Agent.

     "Returns" shall have the meaning provided in Section 4.09 of the Agreement.

                                       18

     "SEC" means the Securities and Exchange Commission or any successor
thereto.

     "Security Documents" means all contracts, instruments and other documents
now or hereafter executed and delivered in connection with the Credit Agreement,
pursuant to which liens and security interests are granted to the Agent for the
benefit of the Lenders, including without limitation, each Mortgage, each
Assignment of Earnings and Insurances, each Assignment of Charter and each
Pledge Agreement.

     "Share Capital" means:

          (A)  in the case of a corporation or a company, any and all shares,
               interest, participations, or other equivalent (however designated
               and whether or not voting) of share capital or corporate stock;

          (B)  in the case of the association or business entity, any and all
               shares, interests, participations, rights or other equivalents
               (however designated) of share capital or corporate stock:

          (C)  in the case of a partnership or limited liability company,
               partnership or membership interests (whether general or limited);
               and

          (D)  any other interest or participation that confers on a Person the
               right to receive a share of the profits and losses of, or
               distributions of assets of, the issuer of such share capital.

     "Solvent" means, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in a
business or a transaction and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.

     "Subsidiary" means any corporation, partnership, limited liability company
or other entity, the majority of the voting interests (including interests
arising out of securities or other interests convertible, at the option of the
holder, into interests of voting stock) of which is owned by a Person either
directly or through Subsidiaries.

     "Tayrona" or "Tayrona Princess" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 290' day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

                                       19

     "Tax Sharing Agreements" means all tax sharing, tax allocation and other
similar agreements entered into by the Borrower and/or any of its Subsidiaries.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, fees, assessments or other charges of whatever nature,
together with any and all assessments, penalties, fines, additions thereto and
interest thereon, in each case, now or hereafter imposed by any governmental
jurisdiction or other taxing authority.

     "Technotrade" means Technotrade Limited, a company organized under the laws
of Gibraltar, together with its successors and assigns.

     "Total Funded Debt" means, with respect to the Borrower for any period, the
average of the Borrower's Consolidated Funded Debt for each of the Borrower's
most recently ended four fiscal quarters, as reported in the financial
statements most recently delivered to the Agent.

     "Total Funded Debt Ratio" means as of any date of determination the ratio
of (x) the Total Funded Debt to (y) the EBITDA.

     "Total Loss" means, with respect to a Vessel, any of (a) an actual or
constructive or compromised or arranged total loss of such Vessel (including,
without limitation, an insurance settlement on the basis of a total loss, or a
constructive or compromised total loss), (b) a Compulsory Acquisition of such
Vessel, (c) a requisition for hire of such Vessel for a period in excess of the
earlier of (x) 180 consecutive days and (y) the remaining number of days until
the Maturity Date, (d) destruction or damage to such Vessel beyond economic
repair or which renders such Vessel permanently unfit for normal use, (e) the
theft or disappearance of such Vessel for a period not greater than the earlier
of (x) 60 consecutive days or (y) the remaining number of days until the
Maturity Date, or (f) any other event that gives rise to the related charterer's
obligation to pay the loss value in respect of such Vessel.

     "Total Loss Proceeds" means all compensation, damages and other payments
(including insurance proceeds other than certain liability insurance proceeds)
received by the Agent, on behalf of the Lenders, from any Person, including any
governmental authority, with respect to or in connection with a Total Loss.

     "Transaction Document" when used in the singular and "Transaction
Documents" when used in the plural means any and all of the Agreement, the
Notes, the Assignment of Charter, the Assignments of Earnings and Insurances,
the Hedging Agreements (if any), the Mortgages, Security Documents, and the
Pledge Agreement and each other document or instrument delivered in connection
therewith or pursuant thereto, as the same may from time to time be amended,
restated, supplemented, renewed or otherwise modified.

     "Tuckahoe" or "Tuckahoe Maiden" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 29th day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

     "UCC" means the Uniform Commercial Code as from time to time in effect the
State of New York, or if the Uniform Commercial Code in any other State of the
United States is

                                       20

mandatorily applicable with respect to any particular matter, the Uniform
Commercial Code as from time to time in effect in such other State of the United
States.

     "Unfunded Current Liability" of any Plan means the amount, if any, by which
the value of the accumulated plan benefits under the Plan determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

     "United States" and "US" shall each mean the United States of America.

     "Vessel" has the meaning set forth in the Mortgage.

     "Vessel Cost" means (1) with respect to the Tayrona Princess and the
Mohegan Princess, the appraised value therefor as set forth in an appraisal
acceptable in form and substance to the Agent plus any related acquisition costs
agreed upon between the Lender and the Borrowers and (2) with respect to the
Tuckahoe, the lesser of (x) the purchase price paid by Henley (as set forth in
the bill of sale or other evidence acceptable to the Agent) plus any related
acquisition costs agreed upon between the Lender and the Borrowers and (y) the
appraised value therefor as set forth in an appraisal acceptable in form and
substance to the Agent plus any related acquisition costs agreed upon between
the Lender and the Borrowers.

     "Viking" means Viking International Carriers, Inc., a company organized
under the laws of the Philippines, together with its successors and assigns.

     "Westbrook" means Westbrook Holdings Ltd., a company organized under the
laws of the Marshall Islands.

     "Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation,
100% of whose capital stock (other than directors' qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any limited liability company, partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.

                                       21

                                    EXHIBIT A

                                INITIAL LOAN NOTE

                                    EXHIBIT B

                          FORM OF ADDITIONAL LOAN NOTE

                                    EXHIBIT C

                            FORM OF DRAWDOWN REQUEST

                                   SCHEDULE 1
                              ADDITIONAL LOAN TERMS

                                    EXHIBIT D

                                 MONTHLY REPORT

                                    EXHIBIT E

                            REGISTERED SHIP MORTGAGE

                                    EXHIBIT F

                                PLEDGE AGREEMENT

                                    EXHIBIT G

                                   [Reserved]

                                    EXHIBIT H

                        FORM OF ASSIGNMENT AND ACCEPTANCE

                                   SCHEDULE I

                                   COMMITMENTS

SCHEDULE 4.06

                                   LITIGATION

SCHEDULE 4.10

                                     ERISA

SCHEDULE 4.11

                           OWNERSHIP/EQUITY INTERESTS

SCHEDULE 4.14

                              ENVIRONMENTAL MATTERS

SCHEDULE 4.18

                                  INDEBTEDNESS

SCHEDULE 4.20

      VESSEL INFORMATION/NONCOMPLIANCE WITH MARITIME RULES AND REGULATIONS

SCHEDULE 4.22

                  CONDITIONS OR RECOMMENDATIONS AFFECTING CLASS

SCHEDULE 4.25

             PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE

SCHEDULE 11.01

                         CONTACT INFORMATION FOR NOTICE

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